Air France-KLM shares plummet in aftermath of CEO Janaillac 's resignation

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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.

He warned that the state, which owns 14.3 percent of the group, would not serve as a backstop. It had predicted 85% of flights would operate: 99% of long-haul, 80% of medium-haul to and from Charles de Gaulle and 87% of short-haul.

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

Pressure on Air France-KLM AIRF.PA grew on Monday as its shares fell by more than 10 percent after chief executive Jean-Marc Janaillac said he would resign over the rejection of a pay deal by the airline's staff.

Janaillac resigned on Friday after striking staff rejected a final pay offer of a 7 per cent wage increase over four years, as they continue to push for a 5.1 per cent increase this year.

The stock dropped as much as 13 per cent, the most in nearly two years.

"I call on everyone to be responsible: crew, ground staff, and pilots who are asking for unjustified pay hikes", Economy Minister Bruno Le Maire told the BFM news channel. Air France-KLM also forecast a "notably" lower income this year compared to 2017.

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"Air France will disappear if it does not make the necessary efforts to be competitive", he warned.

Meanwhile, air traffic control and ground handling strikes planned for May 8 in Italy are also expected to cause delays and disruption. Even before today, the shares had lost 40 per cent in value, making it the worst performer on the 26-member Bloomberg World Airlines Index.

Air France's share price dived Monday after its CEO quit and the French government warned that the country's flagship carrier might collapse.

At the request of the board of directors, Janaillac will remain in his role as CEO and Chairman until the end of the company AGM on May 15 when "an interim governance solution" will be announced.

Air France merged with Dutch carrier KLM in 2004. Unions, led by the powerful pilots' lobby, had wanted a larger up front percentage and no conditions on further raises.

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