Alexandre de Juniac announced last month that he is leaving his role as the CEO of Air France-KLM, to take a new position as the CEO of the International Air Transport Association (IATA), the world’s largest airline lobby group. The transition will take place this July.
De Junaic’s new post will be official upon approval by the IATA board at their annual meeting, to be held this June. If approved, de Juniac would replace Tony Tyler, former CEO of Cathay Pacific Airways Ltd., who announced his plans to retire after serving for five years as IATA’s CEO.
The news, confirmed by both Air France and IATA, comes during a period of continued uncertainty regarding a restructuring plan that de Juniac set in motion nearly two years ago. De Juniac’s intention was to increase the carrier’s competitiveness against discount airlines, like Ryanair Holdings PLC and easyJet PLC in Europe, and quickly growing Middle Eastern airlines.
As part of the de Juniac’s restructuring plan, Air France proposed cutting 2,900 jobs and closing long-haul routes. Despite employees’ very strong opposition to this component of the plan, the airline and union are continuing their conversation about cutting jobs.
In 2015, the carrier delivered its first net profit in eight years, due namely to a drop in fuel costs. Though de Juniac has been focused on cost cutting at the airline, the Franco-Dutch air carrier has been losing ground to rivals. Last year, British Airways’ parent International Consolidated Airlines Group SA reported a €1.5 billion net profit and operating margin of 11.2 percent; Air France’s figure was 3.1 percent.
To add to its struggles, Air France-KLM remains plagued by debt, which stood at €4.3 billion at the end of last year. As a result, the carrier had to put a hold on its plan to purchase more planes.
Though de Juniac didn’t experience overwhelming success in his attempt to turn Air France around, analyst James Hollins predicts de Juniac’s departure will be viewed negatively by investors, by whom he has been always well received. But, Hollins added that a new CEO at Air France-KLM could “inject a deeper sense of urgency across the group for the need to deliver meaningful cost cuts and strategic progress.”
As de Juniac becomes the first leader of a French airline to become CEO at IATA, he will face serious division within the trade body. The division is due to the push back by European and American airlines to the state aid provided to Mideast airlines.
At the IATA’s annual meeting last year, Qatar Airways CEO Akbar Al-Baker pushed for the IATA to defend market liberalization. “any rollback of liberal market access and open skies policies reverberate across the whole world and will lead to retaliatory protectionism,” he said. For more information on International Air Transport Association, [Click Here]
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