Air France-KLM Considering Air Canada Executive as CEO, Union Says

(Bloomberg) -- Air France-KLM Group is trying to poach a top executive from Air Canada as its next chief executive officer, according to one of the unions leading the labor dispute that cost the European airline its previous leader.

Ben Smith, Air Canada’s chief operating officer, is “among candidates” to lead the Franco-Dutch carrier, Philippe Evain, the head of Air France’s main SNPL pilots’ union, said by phone, without saying where he got the information.

Evain said he wasn’t aware if Smith was the preferred candidate, adding that management hadn’t informed the union about the development.

“The appointment process for the new Air France-KLM governance is underway and is continuing,” Air France-KLM said in an emailed statement. “No decision has been made.”

French newspaper Le Monde reported earlier that Air France-KLM’s nomination committee had chosen Smith, citing unidentified sources, including at SNPL. The final decision will be made by the board, which according to the newspaper hasn’t met to review Smith’s application. The company will also have a non-executive chairman, Le Monde said.

Air France-KLM has been looking for a new CEO since previous boss Jean-Marc Janaillac resigned in May, in response to rejection of a pay proposal by employees at the company’s French arm. The plan was designed to end a bitter social conflict with unions at Air France, who are demanding a pay rise.

Air France-KLM Considering Air Canada Executive as CEO, Union Says

Employees have staged 15 days of strikes since the beginning of the year, which have cost the company 335 million euros ($339 million). The shares have dropped 35 percent over the period.

Smith is responsible for customer service and commercial operations for Air Canada, according to the airline’s website, which says he is the “visionary behind Air Canada’s strategic and diversified global network expansion.” The lower-cost airline Rouge was introduced under his leadership, it said, adding that he was “chief negotiator during the airline’s labor negotiations with the two unions representing pilots and flight attendants.”

An earlier CEO frontrunner picked by the nomination committee, water-utility executive Philippe Capron, withdrew his application after coming up against strong opposition from Air France-KLM’s biggest shareholders, including the French government.

In a statement sent later Wednesday, SNPL called for change within the company’s executive committee, and for French President Emmanuel Macron to be more involved in the appointment process. “Air France deserves better than this mishmash cooked up by a nomination committee,” the union wrote, adding that Delta and KLM are currently in a position of strength in the board. Delta Air Lines Inc. has an 8.8 percent stake in Air France-KLM, according to data compiled by Bloomberg.

A French official told Bloomberg last week that no official announcement would be made before the government resumes work on Aug. 22 following a summer break.

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