Air France-KLM share price down, worker unions postpone negotiations

Air France-KLM faces further difficulties in negotiating with its employees after union representatives announced that they would not attend a planned meeting on Monday.

Following last years pilot strike, the airline has agreed to meet with worker unions, who represent pilots, cabin and maintenance employees, in order to discuss the companys five year proposal.

The plan is aimed at repositioning the company to better compete with rising and existing rivals via cost cuts. However, negotiations between management and unions failed before they had even started as the worker unions called off the meeting scheduled on Monday.

A Sunday-released union statement said that the move was aimed at postponing the meeting and not at disbanding negotiations, outlining the unions willingness to discuss Air France-KLMs proposal.

In the joint statement, the unions said the companys Chief Executive Alexandre de Juniac had compromised the negotiations by publicly discussing the meeting via different French media. Additionally, the unions cited the insufficient time between the meeting and last Thursdays elections, when union members had to choose new leaders to represent them.

“We just had the elections. It’s made dialogue a bit complicated right now,” said Veronique Damon, general secretary of the pilots union SNPL, cited by the Wall Stree journal. “We’re not closing the door. We do want to keep working with the management to find a solution.”

During the planned meeting, Mr. de Juniac was hoping to layout details and converse about his “Perform 2020” plan, which also includes boosting operations at the companys low-cost airline Transavia.

Last year Air France-KLM announced it would invest €1 billion in the expansion of its budged line, which caused widely-spread pilot criticism and eventually led to a two-week strike, which in turn reflected in more than €300 million in losses for the company.

In a separate statement released Monday, Mr. de Juniac and Frederic Gagey, who is in charge of the companys French operations, said they “regret” the unions decision and that they would propose a new date for a meeting.

Air France-KLM lost 0.30% of Friday and closed at €7.19 in Paris. On Monday the stock slid 0.40% to €7.16 at 08:56 GMT, marking a one-year decrease of 27.99%. The company is valued at €2.16 billion.

According to the Financial Times, the 26 analysts offering 12-month price targets for Air France-KLM have a median target of €7.50, with a high estimate of €10.00 and a low estimate of €3.00. The median estimate represents a 4.27% increase from the last closing price.