Air France-KLM shares plunge as CEO to quit amid labour dispute

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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. The estimated cost to the French economy so far has been around €220m.

Late on Friday, a visibly shaken chief executive Jean-Marc Janaillac threw in the towel, resigning from a post he held for less than two years after failing to win backing from employees for his pay proposals.

The offer was open until 4 May, but did not receive the number of signatures required for it to be implemented.

Air France-KLM is one of Europe's biggest airlines, but has seen a series of strikes in recent weeks.

Flights by KLM and Hop! will not be affected by the walkout, Air France said, adding customers with tickets for travel Monday or Tuesday can re-book free of charge.

Finance Minister Bruno Le Maire on Sunday urged the company and workers to resume talks, delivering a blunt assessment of the airline's future. "The challenge is the survival of the company, which may disappear if it does not make the necessary competitiveness efforts", he added.

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Unionised staff are set to walk out for the 14th day on Monday as they press for a 5.1 percent salary increase this year as the company recovers from years of losses and restructuring. "I am not taking the money of the French and putting it in a company that isn't at the required competitive level".

On Friday Air France-KLM's CEO stopped over the emergency.

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

Air France-KLM shares are down nearly 50 per cent since the start of 2018, versus a 3.7 per cent gain on the broader Paris SBF-120 index and a 4 per cent fall on the pan-European STOXX 600 Travel & Leisure index.

The French government, which is the national carrier's largest shareholder with a 14 percent stake, has said it will not ride to the rescue and a meeting of Air France-KLM's board has been called for May 15 to decide on a management transition plan.

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

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