Air France's stock sinks as govt warns about its survival


Finance minister Bruno Le Maire on Sunday said the government, which owns 14% of Air France, would not rescue the airline. However, by afternoon, the shares of Air France were down by 9.7 percent at price of 7.31 Euros.

Shares in Air France-KLM fell sharply on Monday morning following the shock resignation of its chief executive over a pay dispute with staff and the French government's rejection of a bailout for the airline. He promised a 7% wage increase over four years, but included scope to adjust that level if Air France's annual financial result was less than €200 million and to apply a reversion clause in case of higher inflation or a negative financial result.

"I do not understand the current situation given Air France was on the right track", the French minister insisted.

Air France has said that "nearly 85 percent" of its flights would be operating, including 99 percent of long-haul flights, 80 percent of its medium-haul flights to and from Charles de Gaulle and 87 percent of short-haul flights to Orly airport and elsewhere in France.

The survival of strike-hit Air France is to be decided, as indicated by the nation's economy serve.

Walkouts that led to the resignation of Mr Janaillac on Friday are continuing this week, with about 15 per cent of services scrapped today, the airline said on its website.

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It was estimated that 14.2 percent of pilots would be taking part in the strike, as well as 18.1 percent of flight crews and 10 percent of ground staff, according to Air France management.

The airline said: "Air France deplores the continuation of these strikes even though the period that opens does not allow to pursue any negotiation". Strikes have already cost the company €300 million.

Air France-KLM reported a net loss of €269m (£238m) in the first quarter of the year.

The government of French president Emmanuel Macron is involved in its own ongoing battle with broad swaths of society which are resisting economic reforms.

Staff and management at the carrier have been locked in a dispute over pay since February. Mr Janaillac had put his job on the line as workers voted on a pay offer by management, a bet he lost as staff rejected the proposal late on Friday.