New CEO for Air France-KLM

Air France-KLM’s board of directors appointed Air Canada COO Benjamin Smith as its new CEO.

He is the first non-French national to be in charge of the group.

Smith began working for Air Canada in 2002, joined the ranks of its executive management in 2007, and became COO in 2014. He advised Air Canada that he will resign from his position.

“I am well aware of the competitive challenges the Air France-KLM group is currently facing and I am convinced that the airlines’ teams have all the strengths to succeed in the global airline market. I am confident in the group’s capacity to become one of the world’s leading players. I look forward to earning the trust and respect of all teams.”

Air France-KLM (AIRF.PA) shares fell on Friday in response from unions to the company’s new boss, while the airline’s Dutch pilots threatened to strike over working conditions. The union claimed that the new boss should be familiar with the French social model and with Air France-KLM’s position among its European competitors; due to the choice of a non-French CEO.

Smith could face challenges and will have to deal with labor troubles at Air France that have already cost the airline 335 million euros ($381.73 million) this year.

This pursues after a months-long search to find a successor to former CEO Jean-Marc Janaillac. He resigned in May 2018 after 55% of Air France staff rejected his final salary increase offer (a 7% wage increase over 4 years instead of the immediate 6% requested by the unions).
KLM has had more success in cutting costs. The Dutch airline managed to agree several cost cutting deals with its staff in recent years, which improved its profitability and put it in a stronger position than its French partner.

The board of directors said that Smith will take over his new role by September 30th.