The new boss of Air France has warned that the French government will not bail out the airline or try to protect it from competition.
CEO Benjamin Smith, former chief operating officer at Air Canada, was speaking ahead of key negotiations with unions.
He told the Financial Times that French president Emmanuel Macron was prepared to sell the 14% stake controlled by his government — even though “there are some people in Air France that believe that this is something they can have as an insurance”.
Smith said: “The government has recently made clear that this is not a good assumption.”
He added that if the state’s “messaging and position” stayed consistent then the timing of a sale “shouldn’t make a difference” to his ability to do his job.
Smith took over the group ten days ago in the face of opposition from unions.
Air France-KLM had been without a permanent chief executive since the resignation of previous chief Jean-Marc Janaillac in May after he lost a staff vote over a pay deal that had been rejected by Air France unions.
Twelve days of strikes cost the airline €335 million in the first half of the year and its shares have fallen 37% in the year to date.
French finance minister, Bruno Le Maire, warned in May that “Air France will disappear” if the airline did not get more competitive.
Smith told the FT that the government’s holding in Air France-KLM provides some “stability” but “whether you are Anglo Saxon or not Anglo Saxon . . . there is a reality . . . and a lot of other areas that the government needs to spend its money on.”
He added: “At the end of the day it’s very expensive to bail out an airline.
“It’s not as if this airline is being attacked in a disproportionate or unjust way, it just has a competitive model that doesn’t work.”
Smith said he wanted to build “trust” with unions and believed there was a “strong realisation…a new approach has to be taken”.