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Home News Air France-KLM: with Benjamin Smith, state of grace and kick of poker

Air France-KLM: with Benjamin Smith, state of grace and kick of poker

The scene takes place one evening in October a few kilometers from the Roissy-Charles-de-Gaulle airport. Members of the FO section of Air France have privatized a bowling-karting area for a relaxing evening with burger and sodas at will. Suddenly, the phone of a union official rings. At the other end of the line, the CEO of Air France-KLM, Benjamin Smith. He asks for a quick interview to advance on an agreement to lead to an increase in wages. Seeing that his interlocutor can not quickly reach the headquarters of the company, the leader jumps in his car, direction bowling karting. He will spend a good part of the evening talking salary progression curve, but also to drink a few glasses (non alcoholic) with FO activists and to make selfies in front of the burgers truck. The whole thing until the bar closes its doors, around 1 o'clock in the morning. "At one point, his driver even called him. He wondered if his boss had not been sequestered, remembers, amused, an FO delegate.

Four months and a few impromptu evenings later, the Air France-KLM managing director can boast of having calmed the social climate of the company, traditionally stormy. The latest episode, the pilots have voted, on Tuesday, an overwhelming majority in favor of an agreement proposed by management for a progression of 4% on their pay slip. Yet nine months ago, also consulted by referendum, Air France employees rejected, without appeal, an agreement proposed by their management and forced the previous CEO, Jean-Marc Janaillac, to resign.

Since then, a new leader has been recruited breaking some codes. "Until now, we had the right to enarques who thought they knew everything. This time, it's about someone who knows what an airplane is and how it works ", says Armand Simon, captain and boss of the SNPL in the regional transport subsidiary Hop !. Winning a successful career as Air Canada director, Benjamin Smith landed at the end of the summer in a climate not very friendly. Non-European and paid three times more than his predecessor (4.2 million euros per year), he begins to wipe a volley of green wood from both parliamentarians and some unions of the company.

Relaxed climate and attentive listening

Not really destabilized, Benjamin Smith decides to put himself in French intensively and immediately meets all the union representatives. The climate is quite relaxed and the listening attentive austerity, but the new general manager poses a condition: "If I find the content of our discussions in the press, I stop everything," he tells his interlocutors. He himself, taken in hand by a Parisian communicator named Matthias Leridon (boss of the Tilder cabinet) who sold him a strategy of silence, refuses any media outlet.

On the other hand, he swallows the files with a disconcerting appetite for many of his interlocutors and, to support him, is surrounded by two faithful: Angus Clarke for the strategy and Oltion Carkaxhija for the social affairs. The latter, born in Albania before moving to Canada, literally glued union representatives with his ability to memorize the voluminous company agreements signed for each category of staff. Installed at the hotel during the first months after his arrival, he continues the marathon days. "When asked what his method was for getting Air France to work so quickly, he just said," I do my homework, "" details a union official visibly amazed.

The first decisions are not long in coming. The subsidiary Joon, a mid-low-cost, mid-low cost hybrid company, launched just a year ago, has been shut down. It blurs the image of the parent company Air France. The very big Airbus A380 carriers, considered too greedy with kerosene and often broken down, are discarded for three of them. A decision made even before the manufacturer announces that it stops production.

Read alsoA380: we finish the jumbos well

Benjamin Smith also knows how to heal the details. The employees of the company and their families are particularly attached to GPs, tickets that allow them to travel at lower cost. It guarantees their durability when some worry about restrictions for this benefit. However, the boss does not hesitate to shake up the workforce. He arrives as soon as he arrives and unceremoniously the Director of Human Resources and the Director General. Today, the number of a surplus of 3,800 executives circulates in the corridors of the head office in Roissy. "He did it to us in the Anglo-Saxon, first a great listening and then it bumps", details a pilot broken for many years in social negotiations. Pieter Elbers, the managing director of KLM, the Dutch cousin company, has experienced this. Anxious to preserve a certain autonomy, he began by rowing in the stretchers about the new organization of Air France-KLM. Ben Smith then made him understand that he was ready to go to the clash and to separate from him, before making a quick trip to Amsterdam, just to test this possibility with the Dutch government. Finally, Pieter Elbers seems to have chosen to join the rank. "Benjamin Smith is a guy with a strong iron fist in a velvet glove ", says a unionist who has seen several CEOs.

Compete with low cost companies

For the moment, in any case, Benjamin Smith has pacified the social front in a company where the interests of each category – ground staff, hostesses and stewards and pilots – are sometimes divergent. All were offered a 4% increase over two years. A long-standing claim in the light of the wage freeze for more than seven years and profits found of Air France-KLM. "Many employees are thus with 50 euros more per month which is 650 euros over one year", note Christophe Malloggi, central delegate FO. A measure whose cost is estimated at 130 million euros. If we add the additional increases granted to the pilots, the addition amounts to 200 million, or 5% of the payroll. The price of social peace. "Strikes alone cost 350 million euros last year", remind mezza voce a member of the management. These work stoppages weigh on the results of the company announced this Wednesday morning. However, it remains profitable with an operating profit of 1.3 billion euros, which fell by 30.7%, and a turnover of 26.5 billion, up 2.5%. This data includes Air France and its Dutch cousin KLM, which, although half the size of last year, generated an operating margin five times higher than that of Air France.

Read alsoThe boss of Air France-KLM makes his first lap

The new management team is therefore expected to catch up with its main competitors, British Airways and Lufthansa, whose profit margins are higher. However, the paths of increased profitability are tight for Air France. In France and the European market, low cost carriers Easy Jet, Vueling or Ryanair carve croupiers. Result: its regional transport subsidiary Hop! lost 70 million euros last year and the entire medium-haul business of Air France would be a hole of 300 million euros.

To turn things around, Benjamin Smith is banking on the company's move upmarket. His idea is to bet on the "French touch" side for one of the first world tourist destinations that is France. Since the national company can not compete with low cost carriers, in the field of fares, it wants to become a must for customers willing to pay a little more in exchange for more attentive service and increased comfort. A choice that could prove profitable but not without risks: "At the first signs of economic downturn, business customers who pay their tickets at a high price are the first to reduce their travel", recalls a union official rather known for his temperate positions. The move upmarket is in any case running. Next year, investments will reach 3.2 billion euros. The interior of Air France's planes will be densified. "The same Boeing 777 of Air France has 18 places less than that of KLM ", says a senior executive. Maintaining Ben Smith in his Air France-KLM CEO's chair will obviously depend on his ability to increase the number of seats occupied in the company's aircraft.

Franck Bouaziz Pictures Marc Chaumeil



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