Air France shares slide amid CEO's resignation, continued strike action

Air France shares slide amid CEO's resignation, continued strike action

Air France shares slide amid CEO's resignation, continued strike action

The Finance Minister of France, Bruno Le Maire, said on Sunday that the government, which owns 14 percent of Air France, would not rescue the airline.

During Janaillac's tenure, Air France-KLM struck deals with Delta Air Lines DAL.N and China Eastern 600115.SS , which each acquired stakes of just under 9 percent.

Shares in Air France-KLM tumbled on Monday after CEO Jean-Marc Janaillac's gamble to put a salary hike offer to employees backfired on Friday, prompting him to announce he would step down.

On Monday, the price of the shares of Air France had plunged by almost 13 percent but easily recovered as the day passed on.

Mr Le Maire appealed "to the sense of responsibility of each of the air crew, ground staff, pilots who are asking for unjustified wage increases" but also warned that the French government should not be expected to backstop the company.

On Monday, the company's shares went into tailspin on the Paris stock exchange on Monday, falling by 13 percent after the French finance minister's statements, and following the resignation of the company's CEO on Friday.

'Air France will disappear if it does not make the necessary efforts to be competitive, ' he warned.

A May 4 electronic vote resulted in a "no" vote to the plan by a majority of Air France staff.

Travellers should expect last minute delays and cancellations, Air France said, adding it will update its flight schedule for Tuesday later today. The company also had to face the resignation of Jean-Marc Janaillac, president of the group.

The airline said: "Air France deplores the continuation of these strikes even though the period that opens does not allow to pursue any negotiation". It had predicted 85% of flights would operate: 99% of long-haul, 80% of medium-haul to and from Charles de Gaulle and 87% of short-haul.

Air France merged with Dutch carrier KLM in 2004. The industrial dispute come as separate strikes over Mr Macron's labour reforms are hitting France's national railways.

This is in sharp contrast to its performance a year ago, when the shares rose 160 percent as Janaillac initiated reforms to restructure and improve the finances of its French brand, said Roche Brune Asset Management's Laverne.

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