Air Canada exec to become new CEO of Air France-KLM

Air Canada exec to become new CEO of Air France-KLM

Air France-KLM named Air Canada executive Benjamin Smith as its new boss on Thursday, opting for an outsider to steer the airline group through a fraught stand-off with unions at its French carrier. Janaillac staked his job on a staff vote on his plans - and lost.

"Thus, yes, there's a strong risk of strikes if Ben Smith isn't capable of renewing a dialogue with the unions of Air France".

Recruiting a foreign boss is "inconceivable", nine unions said before the airline's board met Thursday to select a new CEO. "Is it going to hand over the keys to Air France to Americans?"

"Other countries and governments show fierce protectionism when it comes to their airlines".

Smith's nomination could also be accompanied by a shake-up of the company's governance, with the splitting of the roles of chairman and chief executive, which were previously held by the same executive at the company. Atlanta-based Delta is an 8.8% shareholder in Air France-KLM and the two operate a revenue- and cost-sharing alliance on North Atlantic routes.

Air France-KLM (OTCPK:AFRAF, OTCPK:AFLYY) is down almost 5% in Europe, sparked by a hostile reception from unions to its new CEO and as the airline's Dutch pilots threaten to strike over working conditions.

Recent tweaks to a collective agreement with pilots at Air Canada's low-cost Rouge unit allowed the carrier to use more narrow-body planes for the subsidiary, a "weapon" Air Canada can now use to compete against ultra-low-fare upstarts such as WestJet Airlines Ltd.'s Swoop and Edmonton-based Flair Airlines, Kokonis said.

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Widely tipped in the French media to be unveiled as the new CEO later on Thursday after a board meeting, Smith won approval from the French government which retains influence over the group through its 14.3-percent shareholding. IAG SA - owner of Air France-KLM's arch rival, British Airways - is run by Irishman Willie Walsh.

A senior French pilot on Air France-KLM's board of directors, Paul Farges, had already criticized the potential appointment, calling on France to defend its national interests.

The Air Canada veteran "meets all the conditions set by the state as shareholder", the minister added.

The next pilot walkout is planned for August 27. In 1999, he also simultaneously took on a consultancy role for Air Canada before finally joining the group in 2002.

Walter Spracklin, an analyst with RBC Dominion Securities Inc., said Smith's departure was a setback for Air Canada, "but not irreparable".

"Our deep and highly experienced leadership team will continue to deliver on our global ambitions, achieve our targets and drive our operational performance well into the future".



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