Air France-KLM to be run by interim management committee

Air France–KLM (AFLYY) Raised to “Hold” at Zacks Investment Research

Delta purchased a 10% share of Air France-KLM at the end of past year and took a seat on the company's board, according to Air Transport World.

The committee will make its decisions jointly, overseeing and monitoring group functions and coordinating strategic matters between the group and its airlines, which, as well as Air France and KLM, also include Transavia, HOP! and Joon.

Air France staff have staged a series of one-day strikes which the airline said have cost it EUR€400 million (USD$473.2 million).

It added: "The Board recognises Jean-Marc Janaillac's courageous decision and sincerely hopes that it will open the way to the conditions for a transformation at Air France and fresh momentum for Air France-KLM".

"The members of the Air France-KLM Board of Directors wish to express their deep regret over the successive strikes affecting Air France customers in recent weeks and disrupting their travel plans", the board said.

Gagey, 61, will sit on a new management committee alongside Franck Terner and Pieter Elbers, CEOs of the French and Dutch operations respectively, who will act as his deputies.

Air France-KLM also named board member Anne-Marie Couderc as non-executive chairwoman.

In an announcement forward of an annual shareholder assembly, Air France-KLM mentioned the brand new three-person govt committee would come with group Finance Director Frederic Gagey, who would tackle the position of Chief Government, and the present heads of the 2 nationwide manufacturers that merged in 2004: Air France and KLM. "This was demonstrably successful both for Air France and KLM", Elbers added.

The board said the interim management structure would be in place "for the shortest-possible period" needed to appoint Janaillac's successor, without imposing a specific time limit. "For my part, I will pay particular attention to strengthening the group's cohesion throughout this period".

Janaillac said Air France was "going through one of the most hard crises in its history".

Tuesday's move is created to fill a gap left by the abrupt departure of chief executive Jean-Marc Janaillac after Air France staff earlier this month rejected a pay proposal aimed at ending a series of strikes that have resulted in heavy losses.

He announced his resignation on May 4 after 55.44% voted against the deal, sending shares in Air France-KLM nosediving.

"These strikes will also have a negative impact on the Group's financial results", it warned.

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