Air France-KLM CEO, Jean-Marc Janaillac says he will resign after staff of the airline rejected a pay deal. More than half of the staff voted against a 7 percent salary increase stretched over four years.
The news came as a surprise and plunged the airline into turmoil, according to a Reuters report. The news comes at an awkward time as Air France-KLM is facing a wave of strikes from workers at Air France who have cost the company approximately $350 million.
Janaillac has been at the airline for less than two years and has spent his tenure fighting to cut costs at the French airline in order to compete with low-cost airlines and Gulf carriers, something that his predecessor also tried to do.
Earlier in the day, Air France said it was curbing profit and growth expectations, noting that strikes had been eating away at profits and that the carrier was not able to take advantage of favorable market conditions.
"This is an enormous mess that will only put a smile on the faces of our competitors," Janaillac told a news conference.
Recently, Air France launched its own low-cost airlines in order to better compete with cheaper flight options. Joon targets savvy travelers with a high-tech, creative approach-a cross between a low-cost experience and a "rooftop bar in the sky."
"Competition from Gulf carriers is so fierce that it is really hampering our profitability level," said Jean-Michel Mathieu, CEO of Joon, at an investor meeting in May.
Despite the CEO's departure, unions said that they were sticking with plans to strike next week on May 7 and May 8.
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