Image copyright AFP Image caption Jean-Marc Janaillac tendered his resignation after staff at the airline rejected a new pay deal.

The survival of strike-hit Air France is in the balance, according to the country's economy minister.

Bruno Le Maire's warning that Air France could "disappear" comes as staff begin another round of industrial action over a pay dispute.

Despite the French state owning 14.3% of the Air France-KLM parent group, the loss-making airline would not be bailed out, he said.

On Friday Air France-KLM's chief executive quit over the crisis.

Air France-KLM is one of Europe's biggest airlines, but has seen a series of strikes in recent weeks.

Monday's walk-out is the 14th day of action, as staff press for a 5.1% salary increase this year.

The government's response is seen as a test of labour reforms launched by French President Emmanuel Macron. There have also been strikes at the state-owned SNCF rail company.

On Sunday, Mr Le Maire told French news channel BFM: "I call on everyone to be responsible: crew, ground staff, and pilots who are asking for unjustified pay hikes.

"The survival of Air France is in the balance," he said, adding that the state would not serve as a backstop for the airline's debts.

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

Despite the strike, the airline insisted that it would be able to maintain 99% of long-haul flights on Monday, 80% of medium-haul services and 87% of short-haul flights.

On Friday, Jean-Marc Janaillac, chief executive of parent company Air France-KLM, resigned after staff rejected a final pay offer from him, which would have raised wages by 7% over four years.

Image copyright AFP Image caption Employees of Air France-KLM's French operations have staged a series of strikes in recent days

Air France-KLM reported a net loss of €269m (£238m) in the first quarter of the year.

British Airways and Lufthansa have already undergone heavy cost-cutting in recent years, amid rising competition from low-cost airlines and carriers from the Gulf states.

But many analysts say Air France has lagged far behind when it comes to restructuring and has failed to address its continued losses.

The group has already downgraded expectations of its financial performance for 2018.

Air France merged with Dutch carrier KLM in 2004. The joint company flies tens of millions of passengers around the world every year.</s>PARIS (dpa-AFX) - The survival of strike-hit Air France is in the balance, according to the country's economy minister.



Bruno Le Maire's warning that Air France could 'disappear' comes as staff begin another round of industrial action over a pay dispute.



Despite the French state owning 14.3% of the Air France-KLM parent group, the loss-making airline would not be bailed out, he said.



On Friday Air France-KLM's chief executive quit over the crisis.



Air France-KLM is one of Europe's biggest airlines, but has seen a series of strikes in recent weeks.



Monday's walk-out is the 14th day of action, as staff press for a 5.1% salary increase this year.



Despite the strike, the airline insisted that it would be able to maintain 99% of long-haul flights on Monday, 80% of medium-haul services and 87% of short-haul flights.



On Friday, Jean-Marc Janaillac, chief executive of parent company Air France-KLM, resigned after staff rejected a final pay offer from him, which would have raised wages by 7% over four years.



Copyright RTT News/dpa-AFX</s>PARIS, May 6 (Reuters) - The French government is not there to backstop losses at Air France, Finance Minister Bruno Le Maire said on Sunday, adding the carrier had not made enough efforts to stay competitive and was at risk of disappearing.

"If Air France does not make efforts to become more competitive, allowing this flagship to be at the same level at Lufthansa and other airline companies, Air France will disappear," Le Maire told BFM television.

The French government has a 14 percent stake in Air France-KLM, in turmoil after its CEO said on Friday he was stepping down when staff rejected a pay deal, but Le Maire said the state was not there to bail out the carrier.

The finance minister said the impact of recent strike action in France, which includes rail workers and Air France staff, on gross domestic product (GDP) stood at around 0.1 percent.</s>The future of strike-hit Air France hangs in the balance following the departure of its chief executive over a continuing strike over pay, the French economy minister warned on Sunday.

The airline’s trade union members are planning to walk out for a 14th day on Monday as they press for a 5.1% pay increase this year from their loss-making employer.

Jean-Marc Janaillac, chief executive of parent company Air France-KLM, announced his resignation on Friday after workers rejected a pay deal worth 7% over four years.

“I call on everyone to be responsible: crew, ground staff, and pilots who are asking for unjustified pay hikes,” France’s economy minister, Bruno Le Maire, told BFM television. “Be responsible. The survival of Air France is in the balance.”

The crisis at Air France has coincided with other strike action in the country as rail workers also press on with walk-outs to protest against President Emmanuel Macron’s planned overhaul of the state-run train operator SNCF.

French travellers have faced transport chaos since early April, and Le Maire said the strikes had wiped 0.1 percentage points off economic growth with areas such as tourism and the transport of raw materials badly hit.

Strikes have already cost Air France €300m (£265m) with walk-outs by pilots, ground staff and other workers due to resume on Monday and Tuesday.



He warned that the state, which owns 14.3%, could not be relied upon to rescue the airline. “Air France will disappear if it does not make the necessary efforts to be competitive.

“We’re minority shareholders ... those that think that whatever happens the state will come to Air France’s rescue and soak up Air France’s losses are mistaken.”

Despite the strike, the company says it will be able to maintain 99% of long-haul flights on Monday, 80% of medium-haul and 87% of short-haul.

“Air France deplores the decision to go ahead with the strikes as we enter a period that will not enable negotiations to continue in order to put an end to it,” the carrier said.</s>PARIS, May 6 (Reuters) - Air France must become more competitive or it risks being further outpaced by rivals, French Finance Minister Bruno Le Maire said on Sunday, piling pressure on unions and the carrier's management to resolve a stand-off over pay.

The dispute at Air France-KLM's French brand deepened on Friday when staff rejected a pay deal, prompting the group's CEO to resign and raising questions over the airline's capacity to cut costs and reform.

"If Air France does not make efforts to become more competitive, allowing this flagship to be at the same level at Lufthansa and other airline companies, Air France will disappear," Le Maire told BFM television. He added that the government would not come to the carrier's rescue.

The turmoil has coincided with other strike action as rail workers press on with rolling stoppages to protest President Emmanuel Macron's planned overhaul of the state-run train operator SNCF.

French travellers have faced transport misery since early April, and Le Maire said the drag on economic growth from the strikes stood at around 0.1 percentage points of output as tourism and the transport of raw materials took a hit.

Air France-KLM's board is due to decide on May 15 on its plan to fill the management vacuum. Until then, Air France executives do not have a mandate to continue negotiations with unions, meaning the dispute is likely to drag on.

Strikes have already cost the company 300 million euros ($359 million) and stoppages by pilots, ground staff and other workers are due to resume on May 7 and May 8. Close to 85 percent of flights are likely to run on Monday, the carrier said.

"Air France deplores the decision to go ahead with the strikes as we enter a period that will not enable negotiations to continue in order to put an end to it," the airline said in a statement.

Air France-KLM CEO Jean-Marc Janaillac, who will stay on until May 15, had been battling to cut costs at the French firm to keep up with competition from Gulf carriers and low-cost airlines.

Unions had been demanding a salary hike of 5 percent in 2018 alone, and staff rejected a management pay deal offering 7 percent wage increase over four years.

Le Maire called the union demands unjustified, and urged both sides to resume talks. He added the French state, which has a 14 percent stake in Air France-KLM, would not bail out the French carrier.

"We're minority shareholders ... those that think that whatever happens the state will come to Air France's rescue and soak up Air France's losses are mistaken," Le Maire said.

Representatives from Air France unions are due to meet on Monday. French Prime Minister Edouard Philippe, meanwhile, is also due to meet rail unions for talks over the SNCF stand-off. ($1 = 0.8363 euros) (Additional reporting by Cyril Altemeyer, Sophie Louet and Yann Le Guernigou Editing by Matthew Mpoke Bigg)</s>PARIS (REUTERS) - The French finance minister on Sunday (May 6) raised the pressure on Air France managers and unions to resolve a stand-off over wages, saying the government would not ride to the carrier's rescue as it grapples with worker strikes and a leadership vacuum.

The dispute at Air France-KLM's French arm intensified on Friday when staff rejected a pay deal, prompting the group's chief executive to resign and raising questions over the airline's capacity to cut costs and reform.

Finance Minister Bruno Le Maire urged the company and workers to resume talks, delivering a blunt assessment of the airline's future as he warned the state's 14 per cent Air France-KLM stake was no guarantee it would pick up the pieces.

"If Air France does not make efforts to become more competitive, allowing this flagship to be at the same level at Lufthansa and other airline companies, Air France will disappear," Le Maire told BFM television.

"We're minority shareholders ... those that think that whatever happens the state will come to Air France's rescue and soak up Air France's losses are mistaken," Le Maire said.

Air France-KLM CEO Jean-Marc Janaillac, who will stay on until May 15, had been battling to cut costs to keep up with competition from Gulf carriers and low-cost airlines.

Rivals like British Airways and Lufthansa have already gone through painful restructurings to cope.

Air France-KLM, which reported widening losses in the first quarter even as profits at Dutch carrier KLM improved, has reined in growth expectations for 2018 after walkouts at the French airline.

Strikes have already cost the company 300 million euros (S$479 million) and stoppages by pilots, ground staff and other workers are due to resume on May 7 and May 8. Close to 85 per cent of flights are likely to run on Monday, the carrier said.

Air France-KLM's board is set to announce an "interim governance solution" on May 15 following Janaillac's departure. The company declined to comment further on what format that would take or how long the transition would last.

Delta Airlines and China Eastern both hold 9 per cent of Air France-KLM.

Until new management plans are in place, Air France executives lack a mandate to continue negotiations with unions, prolonging the dispute.

Some worker representatives hit back at Le Maire on Sunday, after he called their demands unjustified.

Unions had been calling for a salary hike of 5.1 per cent in 2018 alone, and staff rejected a management pay deal offering 7 per cent wage increase over four years.

"Our demands are far from astronomical," Yannick Floc'h, vice-president of the SNPL pilots union, told BFM TV later in the day, adding there was room to find middle ground between the two sides.

"I think we can find a way out." Others, including the more moderate CFDT union, which had urged Air France to back management's pay proposal, warned that"dialogue was blocked" and said the SNPL was too inflexible.

"There's reason enough to be worried," CFDT leader Laurent Berger.

The Air France turmoil has coincided with other strike action as rail workers press on with rolling stoppages to protest President Emmanuel Macron's planned overhaul of SNCF, the state-run train operator.

French travellers have faced transport misery since early April, and Le Maire said the drag on economic growth from the strikes stood at around 0.1 percentage points of output as tourism and the transport of raw materials took a hit.

Representatives from Air France unions are due to meet on Monday. French Prime Minister Edouard Philippe is also due to meet rail unions for talks over the SNCF stand-off.</s>France’s economy minister on Sunday warned that the survival of strike-hit Air France was in the balance following the departure of the company’s chief executive over a pay dispute.

Unionised staff are set to walk out for the 14th day on Monday as they press for a 5.1-percent salary increase this year as the company recovers from years of losses and restructuring.

Jean-Marc Janaillac, boss of parent company Air France-KLM, resigned on Friday after staff rejected a final pay offer from him which would have raised wages by seven percent over four years.

“I call on everyone to be responsible: crew, ground staff, and pilots who are asking for unjustified pay hikes,” Economy Minister Bruno Le Maire told the BFM news channel on Sunday.

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

He warned that the state, which owns 14.3 percent of the group, would not serve as a backstop.

“Air France will disappear if it does not make the necessary efforts to be competitive,” he warned, ruling out any government intervention to purge the company’s debts.

Air France-KLM reported a net loss of 269 million euros ($322 million) in the first quarter of the year.

Despite the strike, the company says it will be able to maintain 99 percent of long-haul flights on Monday, 80 percent of medium-haul and 87 percent of short-haul.</s>Air France is in crisis, mired in a series of disruptive strikes that have prompted its CEO to quit and have left French officials warning the carrier could "disappear" without some sort of solution.

The latest came Monday, when the carrier was hit by a new strike over pay. The labor action forced the cancellation of about 15% of Air France’s entire schedule and marked the 14th day of worker walkouts so far in 2018, according to The Associated Press. The news agency notes the company “has already cost the company more than 300 million euros ($360 million) in a matter of weeks.”

That turmoil – and questions about Air France’s management and survival strategy – sent the airline’s share price down by 13% in early Monday trading, though that had moderated to a 9.7% decline by early afternoon Paris time.

On Friday, the broader company of Air France-KLM was rocked by the abrupt resignation of CEO Jean-Marc Janaillac after workers at the Air France unit rejected the company's latest wage proposal. Air France and Dutch carrier KLM merged in 2004, partnering on connections but still operating as stand-alone brands under the Air France-KLM holding company.

Even for Air France, which has frequently been a target of union labor actions, the latest dispute has become worrisome.

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

He urged striking pilots, crew and ground staff to be "responsible" and said "the survival of Air France is at stake."

"Air France will disappear if it does not make the necessary efforts to be competitive," he said on BFM television.

The strikes have taken a heavier toll on Air France than management and investors expected, and the company last week forecast a "notably" lower income this year compared to 2017.

Unions want a 5.1% pay rise this year, arguing that the company is making enough of a profit to meet their demands. They noted that their wages have been frozen since 2011 as the airline cut jobs and restructured.

The company argues that the union demands would wipe out hard-earned gains from the restructuring, which was aimed at stemming years of losses and keeping Air France afloat, as well as jeopardize efforts to win back market share from low-cost airlines and big-spending Mideast and Asian carriers.

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

Employees rejected that offer Friday, prompting the CEO's decision to step down. He called the dispute a "huge waste that can only make our competitors rejoice."

The Air France-KLM board asked Janaillac to stay on until May 15 when it will put a transitional leadership in place.</s>By Reuters - May 06,2018 - Last updated at May 06,2018

An Air France Airbus A319-111 airplane prepares to land at the Charles de Gaulle Airport in Roissy, near Paris, France, on April 28 (Reuters file photo)

PARIS — Air France must become more competitive or it risks being further outpaced by rivals, French Finance Minister Bruno Le Maire said on Sunday, piling pressure on unions and the carrier's management to resolve a stand-off over pay.

The dispute at Air France-KLM's French brand deepened on Friday when staff rejected a pay deal, prompting the group's CEO to resign and raising questions over the airline's capacity to cut costs and reform.

"If Air France does not make efforts to become more competitive, allowing this flagship to be at the same level at Lufthansa and other airline companies, Air France will disappear," Le Maire told BFM television. He added that the government would not come to the carrier's rescue.

The turmoil has coincided with other strike action as rail workers press on with rolling stoppages to protest President Emmanuel Macron's planned overhaul of the state-run train operator SNCF.

French travellers have faced transport misery since early April, and Le Maire said the drag on economic growth from the strikes stood at around 0.1 percentage points of output as tourism and the transport of raw materials took a hit.

Air France-KLM's board is due to decide on May 15 on its plan to fill the management vacuum. Until then, Air France executives do not have a mandate to continue negotiations with unions, meaning the dispute is likely to drag on.

Strikes have already cost the company 300 million euros ($359 million) and stoppages by pilots, ground staff and other workers are due to resume on May 7 and May 8. Close to 85 per cent of flights are likely to run on Monday, the carrier said.

"Air France deplores the decision to go ahead with the strikes as we enter a period that will not enable negotiations to continue in order to put an end to it," the airline said in a statement.

Air France-KLM CEO Jean-Marc Janaillac, who will stay on until May 15, had been battling to cut costs at the French firm to keep up with competition from Gulf carriers and low-cost airlines.

Unions had been demanding a salary hike of 5 per cent in 2018 alone, and staff rejected a management pay deal offering 7 per cent wage increase over four years.

Le Maire called the union demands unjustified, and urged both sides to resume talks.</s>Shares in Air France fell 14% in early Monday trading, reacting to the latest events at the troubled airline.

It was the first chance investors had had to respond to chief executive Jean-Marc Janaillac's resignation and comments by France's economy minister.

Mr Janaillac's move came after staff at the loss-making airline rejected a new pay deal and continued their industrial action in pursuit of a 5.1% pay rise.

And on Sunday, minister Bruno Le Maire warned Air France could "disappear".

The French government owns 14.3% of the Air France-KLM parent group.

Monday's walk-out is the 14th day of action.

Despite the strike, the airline insisted that it would be able to maintain 99% of long-haul flights on Monday, 80% of medium-haul services and 87% of short-haul flights.

The government's response is seen as a test of labour reforms launched by French President Emmanuel Macron. There have also been strikes at the state-owned SNCF rail company.

Mr Le Maire told French news channel BFM TV: "I call on everyone to be responsible: crew, ground staff, and pilots who are asking for unjustified pay hikes.

"The survival of Air France is in the balance," he said, adding that the state would not serve as a backstop for the airline's debts.

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

Air France-KLM reported a net loss of €269m (£238m) in the first quarter of the year.

British Airways and Lufthansa have already undergone heavy cost-cutting in recent years, amid rising competition from low-cost airlines and carriers from the Gulf states.

But many analysts say Air France has lagged far behind in restructuring and has failed to address its continued losses.

The group has already downgraded expectations of its financial performance for 2018.

Air France merged with Dutch carrier KLM in 2004. The joint company flies tens of millions of passengers around the world every year.
French economy minister Bruno Le Maire says Air France may collapse over ongoing strike action and the state will not bail the firm out despite owning 14.3% of parent Air France-KLM.