KLM chief says Air France requires more restructuring
Sydney/Paris — More restructuring is needed at French flag carrier Air France, the head of Dutch sister airline KLM said on Monday.
KLM CEO Pieter Elbers declined to comment, however, on the possibility of AccorHotels buying a stake in the airline.
The two national airlines merged to form Air France-KLM in 2004 but Air France’s economic performance has broadly lagged that of KLM, with the French carrier suffering frequent strikes.
"Yes, Air France needs to be restructured, yes some interventions need to take place. Progress has been made. Has it been enough, no? Should it be done more? Yes," Elbers said.
Asked during a panel at the annual meeting of the International Air Transport Association (Iata) whether a Dutchman could ever become CEO of Air France-KLM, whose boss recently stepped down after losing a staff vote on pay, Elbers said, "Why not?" When asked whether he would want the job, he said, "That’s a decision for the board."
Elbers declined to comment separately on an announcement by AccorHotels that it was looking at possibly buying a stake in Air France-KLM, in which the French government has a 14.3% holding.
AccorHotels said on Sunday it was looking again at possibly buying a stake in Air France KLM, in which the French government has a 14.3% holding.
AccorHotels said over the past years it had held discussions with Air France KLM with a view to develop joint projects, including an acquisition of a minority stake.
"AccorHotels confirms having resumed its reflections on the matter, being at very early stage of assessing the feasibility and potential terms and conditions which will be discussed with Air France KLM in due time," AccorHotels said.
"There is no certainty that these initiatives will lead to any agreement nor any form of implementation".
Newspaper Les Echos reported on Sunday that the government was considering selling its Air France stake and had received interest from the management of AccorHotels.
Air France and the French finance ministry declined to comment on Sunday, while Elbers also said on Monday that he had no comment to make, when asked about the matter.
Air France KLM has been going through a management upheaval following the departure of CEO Jean-Marc Janaillac after staff rejected a pay deal.
French unions have staged 15 days of walkouts since February, demanding a pay increase after six years of pay freezes. The strikes have cost the airline about €400m ($477m) in 2018. Its shares are down 50% year to date to €6.98 per share.
Les Echos said the government was studying three options.
The first one would be to sell the whole stake to AccorHotels.
The second option would be a partial sale, which meant the state would keep some influence at the company.
A third option would result in a swap of Air France shares with AccorHotels, in which the state would get a stake in the hotel group. Share as AccorHotels last stood at €47.60.
Les Echos, citing unnamed sources, said the government would seriously look at a sale given that the management of AccorHotels had shown interest in the stake.
Les Echos also said the government had not yet made a firm decision on what it planned to do with the stake.