Air France CEO meets Dutch politicians on KLM unrest

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Air France chief executive Ben Smith met the Dutch finance and transport ministers, amid growing unrest at the company’s vital KLM subsidiary over plans for tighter integration with its French parent.

Smith did not answer questions after the morning meeting in The Hague, but Netherlands Finance Minister Wopke Hoekstra told reporters that they had had “intensive talks”.

“I don’t think it’s polite to say exactly what we discussed,” Hoekstra said. “It was about protecting the interests of Schiphol (airport) and KLM.”

The meeting comes a day after KLM received a petition signed by 25,000 of its 35,000 employees asking Air France to renew the contract of KLM CEO Pieter Elbers, who is due to leave the company when his term expires in April.

Air France’s board is due to meet Feb. 19 ahead of full year earnings Feb. 20, a meeting where either a decision should be made to reappoint Elbers or a new leader should be nominated.

Elbers is seen as a staunch defender of Dutch interests, as KLM has carefully guarded its independence within the Air France group since its takeover in 2003.

The relative outperformance of the Dutch subsidiary has caused tensions within the group. KLM staff regarded repeated costly strikes at Air France with dismay, as the Dutch arm of the union weathered endured painful cost-cutting and layoffs during Elbers’ tenure.

For the first nine months of 2018, Air France Group reported operating profit of 328 million euros ($370 million), while KLM had operating profit of 960 million euros.

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