Air France-KLM shares drop following chief's resignation

Turkey vows to launch new cross-border military operations

Air France shares tumbled in early Monday trade as investors acted on news the airline's CEO has resigned, as staff unions rejected a pay deal and are continuing their planned strike action.

He also said that the French government, which owns 14.3% of the Air France-KLM holding company, would not provide the carrier with a bailout, according to BFMTV.

Air France is allowing customers scheduled to fly on Air France or Joon May 7 or 8 to postpone their trip through May 27.

The company had offered a staggered 7 per cent pay increase over four years, with 2 per cent in 2018 and further increases dependent on the airline's financial performance.

The share price woes follow the resignation on Friday evening of Air France-KLM chief executive Jean-Marc Janaillac after workers rejected the company's latest wage proposal.

Janaillac will formally resign at a Board of Directors' meeting on May 9, the company said, adding that "it will be their responsibility to take the appropriate measures to ensure the continuity of the group and Air France during the transition period". There have been strikes at the SNCF rail organization too.

The group's share price has halved this year as it faces increasing competition from low-priced rivals and deep-pocketed Middle Eastern airlines, as well as the prospect of a sustained higher oil price.

Air France said 15 per cent of its flights would be cancelled on Monday as pilots and cabin crew went on strike over the pay dispute for a 14th day since February.

France's economy minister on Sunday warned that the survival of Air France was now in the balance.

Profits at the Dutch sister company KLM, which has succeeded in cutting costs, rose in the first quarter, contrasting with losses at Air France.

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

The government's response is seen as a test of labour reforms launched by French President Emmanuel Macron.

Bruno Le Maire's notice that Air France could "vanish" comes as staff starts another round of new activity over a compensation question.

"If Air France does not become more competitive".

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