Share story

PARIS (AP) — Air France-KLM has named Benjamin Smith, formerly a top executive at Air Canada, as its new CEO, sparking union fears Friday that he would cut back on wages and work conditions.

The company announced Thursday that Smith, 46, who was previously Air Canada’s chief operating officer, will fill the role by Sept. 30.

Vincent Salles, an official at the CGT-Air France union, told France Info radio on Friday that unions fear Smith’s mission is to implement plans that would “deteriorate working conditions and wages.”

Unions also have expressed concerns that he would tend to expand the company’s low cost subsidiaries instead of developing Air France’s main brand.

Smith is the first foreign CEO in the company’s history, which has also sparked criticism from unions. Nine unions objected to the appointment of a foreigner in the name of “the defense of our national airline’s interests,” in a joint statement.

Union representatives are gathering on Aug. 27 to discuss potential strike actions.

The Dutch pilots’ union said Friday that its KLM members are preparing to take industrial action after talks with the carrier about a new collective labor agreement broke down.

The union said its members “will take action … to change the mind of the KLM.”

Pilots and KLM have been discussing ways of reducing work pressure as part of negotiations leading to a new labor agreement but the pilots say the airline is not doing enough.

KLM said in a statement it made an improved proposal in talks on Thursday and expressed “disbelief and disappointment” at the union’s rejection of its offer.

The union said it did not fully address pilots’ concerns.

The previous Air France-KLM CEO, Jean-Marc Janaillac, resigned in May after Air France employees held 13 days of strikes over pay and rejected the company’s wage proposal.

Unions are seeking a 6 percent pay rise. Crews and ground staff wages have been frozen since 2011.

The company estimates the strike cost it 335 million euros ($381 million) in the first half of the year.

Smith said he is “well aware of the competitive challenges” the group is facing.

“I am convinced that the airlines’ teams have all the strengths to succeed in the global airline market,” he said in an Air France-KLM statement.

French Finance Minister Bruno Le Maire said Smith’s arrival was an “opportunity” for Air France-KLM and expressed his confidence in the new CEO’s ability to “re-establish social dialogue.” The French state holds a 14.3 percent stake in the company.


Associated Press writer Mike Corder in The Hague, Netherlands, contributed.