New Air France-KLM boss meets minister ahead of strike decision

FILE PHOTO: Air Canada's Benjamin Smith 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/File Photo

PARIS (Reuters) - Newly appointed Air France-KLM Chief Executive Ben Smith held talks with French Transport Minister Elisabeth Borne, a government spokesman said on Wednesday, as the airline group’s unions prepare to decide on further strike action over pay.

The minister met Smith on Tuesday for a “a first discussion of the main issues” facing the group, the spokesman said.

The former Air Canada executive was named last week as Air France’s first non-French CEO, three months after his predecessor quit amid crippling wage strikes.

Smith’s own pay may further inflame tensions as he faces the challenge of striking new Air France union agreements on pay and productivity.

His new compensation package amounts to a maximum 3.25 million euros ($3.72 million) in fixed and variable pay, with an additional 1 million euros awarded if specific turnaround goals are met, Air France-KLM said in a notice on its website, confirming earlier French press reports.

Smith, 46, is due to take up the top job in late September.

Unions that had backed earlier strikes will meet on Monday to decide whether to pursue further action, amid some signs that workers’ representatives have softened their stance and may opt for a more conciliatory start to relations with their new CEO.

“Beyond the economic and social context, it’s not that shocking that the leader of a company like Air France-KLM should command a salary on a par with our main competitors,” said one union official involved in the talks.

Another influential pilots’ union, SPAF, has withdrawn from the grouping and indicated on Wednesday that it would not back any immediate action before Smith’s arrival. “We’ll wait to meet him,” SPAF President Gregoire Alpincourt said.

Reporting by Cyril Altmeyer; Writing by Laurence Frost; Editing by Geert De Clercq