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Air France workers tear up another executive

Air France workers tear up another executive

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.

Air France shares went into a tailspin on the Paris stock exchange on Monday after Air France-KLM boss Jean-Marc Janaillac announced his resignation on Friday.

Janaillac resigned on Friday after striking staff rejected a final pay offer of a 7 per cent wage increase over four years, as they continue to push for a 5.1 per cent increase this year.

Air France-KLM's board will decide on a management transition plan on May 15.

Air France-KLM shares suffered their biggest one-day fall in a decade on Monday after its chief executive said he would resign following the rejection of a pay deal by the airline's staff.

Air France reported Friday that it lost $320 million in the first quarter of 2018, adding that the strike will lead to at least $330 million more in lost revenue through the end of the year.

Air France-KLM shares fell as much as 14.3 per cent to an intraday low of 6.93 euros ($8.30) in early trading, around at their lowest level since April 2017.

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.

"Be responsible. The survival of Air France is in the balance", he added.

Air France-KLM shares are down nearly 50 per cent since the start of 2018, versus a 3.7 per cent gain on the broader Paris SBF-120 index and a 4 per cent fall on the pan-European STOXX 600 Travel & Leisure index.

But many analysts say Air France has lagged far behind in restructuring and has failed to address its continued losses. Despite the strike, the company said it would be able to maintain 99 percent of long-haul flights, 80 percent of medium-haul and 87 percent of short-haul. The industrial dispute come as separate strikes over Mr Macron's labour reforms are hitting France's national railways.

Staff and management at the carrier have been locked in a dispute over pay since February.

After protracted negotiations, management last week offered a 2 percent pay rise this year and an additional 5 percent over 2019-2021.

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