Julian Moxon/PARIS
The French Government has opted for a progressive reduction in its 94% stake in Air France, but will retain a 53% stake in the carrier, leaving it as one of the last in Western Europe to remain state controlled.
The move, which comes as Air France prepares a Fr40 billion ($6.5 million) fleet investment plan, is a further step toward making the airline more attractive for strategic alliances. These have failed to materialise so far, although Delta Air Lines has already made it clear that Air France is its "preferred partner" for a global alliance along the lines of the Star Alliance. This deal, and another planned with Continental, must await an open skies agreement with the USA, which could be agreed in June.
Part of the Government's plan, revealed on 23 February, foresees releasing to pilots and higher-paid workers around 13% of the 20% of Air France's capital that will be placed on the stock exchange. A further 10% of the share capital will be offered to pilots, in exchange for salary cuts of up to 15%. Air France's pilots are among the highest paid in Europe, and the airline's president, Jean-Cyril Spinetta, has followed his predecessor, Christian Blanc, in insisting that salaries must be reduced as part of the airline's efficiency drive.
The partial privatisation plan calls for a reduction in Government ownership to 67% by the end of 1998. In the longer term, but still without a precise timetable, the Government will reduce its stake to 53%.
Employees will then be able to hold a maximum of 23%, contributing, says the airline, "to more involvement in the life and future of the company".
The more militant of the pilots' unions have already shown their dissatisfaction with the proposed salary cuts for shares deal. The SNPL union, which represents those who used to work for Air Inter (now incorporated into the Air France group) demands that Spinetta "gives us the same type of voluntary shareholding that he has offered to other members of the workforce".
The SNLP rejects any salary cut, citing concerns about "changes in retirement conditions". Another union, the CGT, has called for a "total stoppage of the privatisation process".
Source: Flight International
