Air France-KLM CEO resigns amid labor strife

Alexandre de Juniac, chief executive officer of Air France-KLM Group, is resigning his post to replace Tony Tyler as head of the International Air Transport Association, according to a statement from Europe’s biggest airline.    Air France-KLM Group Chief Executive Officer Alexandre de Juniac is stepping down, ending his three-year struggle to contain costs amid fierce union resistance that last year culminated in physical attacks on officials that made headlines around the world.
   De Juniac, 53, is quitting for the more sedate surroundings of the International Air Transport Association lobby group, which he will run after leaving Air France-KLM by Aug. 1, Europe’s biggest airline said in a statement Tuesday.
   The CEO sought to build his strategy around shifting short-haul Air France flights that don’t connect with lucrative long-haul trips to lower-cost units Transavia and Hop! in order to compete with discount specialists Ryanair Holdings Plc and EasyJet Plc. Union opposition has left that plan in tatters.
   A 10-day strike in 2014 over proposals to base Transavia planes outside France, side-stepping pilot opposition, led to a government-enforced climb-down from which the CEO has struggled to recover, while violence last October led managers to flee a meeting over a fence with their clothing in shreds.
   Air France set a January deadline for its latest bid to secure savings from pilots, before pushing back the targeted date for a deal later into the year.
   Air France-KLM has also surrendered market share on inter-continental routes as Gulf carriers led by Dubai-based Emirates feed more and more Asia-bound traffic through their home hubs using mammoth fleets of new wide-body jets.
   The group’s share price has advanced 18 percent since De Juniac took over at the Paris-based company on July 1, 2013. Arch-rival IAG SA, parent of British Airways, has more than doubled in value over the same period, though Germany’s Deutsche Lufthansa has declined.
   On the positive side, Air France-KLM posted an operating profit of 816 million euros ($908 million) for 2015 to end four years of losses, though the advance was largely a reflection of lower fuel prices and prompted De Juniac to caution that the company lagged its peers in terms of competitiveness.
   A successor to De Juniac will be now be sought, the Paris-based company said. While Frederic Gagey heads the Air France unit from which De Juniac himself was promoted, the carrier had a tradition of preferring candidates who also have civil service experience.
   De Juniac replaced veteran chief Jean-Cyril Spinetta, who stood down months short of his 70th birthday after two stints in charge.
   Earlier in his career De Juniac was chief of staff to International Monetary Fund Managing Director Christine Lagarde when she was French finance minister, and advised her successor Francois Baroin. He also led a unit of Thales SA, Europe’s biggest maker of defense electronics, before joining Air France in 2011.
   IATA confirmed De Juniac’s appointment, which it said will be approved at an annual meeting of airline chiefs to be held in Dublin in June. The industry body’s current CEO, Tony Tyler, said last August that he planned to leave.