Air France-KLM unions bristle as Air Canada executive tipped for CEO job

PARIS (Reuters) - French pilot unions hit out at the possible appointment of Air Canada’s chief operating officer Benjamin Smith as Air France-KLM’s new boss, after several newspapers reported that he was poised to be named to the job on Thursday.

Benjamin Smith, President of Air Canada poses for a picture during a reception at the 2016 International Air Transport Association (IATA) Annual General Meeting (AGM) and World Air Transport Summit in Dublin, Ireland June 2, 2016. REUTERS/Clodagh Kilcoyne - S1AETHQGBYAA

The appointment would fill a management void after a tumultuous stand-off with unions at French carrier Air France. Former CEO Jean-Marc Janaillac quit in May when staff rejected his offer of a pay deal aimed at ending a wave of strikes.

The next boss will have to grapple with unions that are demanding fresh talks over wages, and the reported choice of a North American to run a company in which the French state has a stake has already raised hackles among some.

Air France-KLM’s board was due to meet on May 16 to approve Smith’s nomination as CEO, France’s Les Echos and La Tribune said on Wednesday, confirming an earlier report in Liberation.

A spokesman for Air France-KLM declined to comment, reiterating only that the search for a new boss was underway. The French economy ministry also declined to comment.

“The board of Air France-KLM always makes the worst decisions (...) this time, is it going to hand over the keys to Air France to Americans?” Philippe Evain, head of the SNPL pilots’ union, said on Twitter.

The Force Ouvriere union representing Air France ground staff, meanwhile, took issue with the reported pay package that Smith would get, which according to Liberation could reach 3.3 million euros ($3.74 million) a year, more than his predecessor.

“A 300 percent payrise for a candidate that hasn’t proven anything yet!” the union tweeted.

A senior French pilot on Air France-KLM’s board of directors, Paul Farges, had already criticized the potential appointment, calling on France to defend its national interests.

The French state has a 14 percent stake in Air France-KLM, while Delta Airlines and China Eastern Airlines each hold 8.8 percent.

Government officials say President Emmanuel Macron is open to a non-French national leading the group for the first time.

Smith, known to speak French, has a track record in dealing with unions, and was the main negotiator in talks with pilot and cabin crew staff at Air Canada that resulted in a 10-year agreement in 2015.

His star has been rising at Air Canada so it made sense for him to seek a CEO role, even though Air France-KLM was particularly thorny, two industry experts said.

“If you’re looking for someone to manage the pilots, he’s a good choice,” one of the sources said.

Reporting by Sarah White, Julie Carriat and Victoria Bryan; Editing by Elaine Hardcastle