Air France announces loss of over $300Mln due to ongoing strikes

Air France shares in tailspin after minister warned loss-making airline could disappear as staff stage 14th walkout demanding 5% pay rise

Air France shares in tailspin after minister warned loss-making airline could disappear as staff stage 14th walkout demanding 5% pay rise

Despite the French state owns 14.3% of the Air France-KLM parent company, the aircraft would not be salvaged, he said.

On Friday, Air France-KLM CEO Jean-Marc Janaillac handed in his resignation to the executive board after the staff rejected a final pay offer from him.

On Monday, unionized staff are set to walk out for the 14th day as they press for a 5.1-percent salary increase this year. Air France-KLM reported a net loss of €269 million ($322 million) in the first quarter of the year.

Shares in Air France fell 14 percent on Monday and the airline canceled 15 percent of its flights due to an ongoing labor issue and the weekend resignation of the CEO.

By 1455 BST, Air France shares were 9.91% lower at €7.29.

He added: "The challenge is the survival of Air France, the development of a company to which we are all attached".

Air France's share price plunged almost 13% at the open on Monday and was trading 10.9% lower at 7.21 euros in the early afternoon in Paris amid questions about its future management and direction.

"I will not explain to the French that we will.absorb the losses of Air France while Air France does not make the necessary competitive efforts to be at the same level as its major European competitor".

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Despite the strike, the airline insisted that it would be able to maintain 99% of long-haul flights on Monday, 80% of medium-haul services and 87% of short-haul flights.

A wave of strikes at Air France has so far cost the company 300 million euros.

The CEO of Air France, Franck Terner, will oversee the day-to-day operations of the company.

The strikes have taken a heavier toll on Air France than management and investors expected, and the company last week forecast a "notably" lower income this year compared with 2017.

The government's response is seen as a test of labour reforms launched by French President Emmanuel Macron.

This is in sharp contrast to its performance a year ago, when the shares rose 160 percent as Janaillac initiated reforms to restructure and improve the finances of its French brand, said Roche Brune Asset Management's Laverne.

He urged striking pilots, crew and ground staff to be "responsible" and said the survival of Air France "is at stake".

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