De Juniac poised to head Air France-KLM

Promotion expected as reward for French arm’s shake-up

Alexandre de Juniac has been lined up to take over as chief executive of Air France-KLM this summer, as reward for his handling of a painful restructuring at the airline’s struggling French arm over the past 18 months.

The 50-year-old’s appointment is expected to be confirmed at a board meeting of the lossmaking Franco-Dutch company on Monday, barring any last-minute problems.

If his appointment is confirmed, Mr de Juniac – currently head of Air France – would take over the parent group in July from Jean-Cyril Spinetta, the company veteran who was brought back in as chief executive after a boardroom coup in October 2011.

The 69-year-old Mr Spinetta had originally targeted a 2014 departure, but has indicated he now wants to quit the post this year.

Mr de Juniac’s expected promotion is a considerable victory for the one-time chief of staff to Christine Lagarde, the former French finance minister. Some industry executives had questioned whether a high-flying technocrat, and classic product of the grandes écoles, was the right person to turn round the fortunes of Air France.

He took the Air France job at the same time as Mr Spinetta returned, despite the fact that the older man had supported a rival candidate with airline industry experience for the post.

However, Mr de Juniac is now well-regarded within the company after implementing the Air France restructuring without provoking mass strike action – so far at least, although he is facing increased opposition from its pilots union.

The airline’s “Transform 2015” restructuring plan, introduced by Mr Spinetta and Mr de Juniac, will lead to the removal of 5,000 jobs at Air France and 1,300 at KLM. They have targeted a €1.5bn reduction in its €6bn of group net debt by the end of 2014. Its market value is €2.4bn.

Air France-KLM’s net loss widened in 2012 to €1.2bn, from €805m the year before, including a €471m charge related to the restructuring. However, its shares have risen 75 per cent over the past 12 months as investors have responded to progress on the job cuts and negotiations with France’s often hardline unions.

Mr Spinetta, the original architect of the Air France-KLM merger in 2004, has also tried to force the two airlines closer together since his reappointment in 2011. The company declined to comment on the imminent management changes but they are expected to include more details on integrating functions such as finance, strategy, sales, purchasing and IT.

Board members will also be asked on Monday to approve the appointment of Frédéric Gagey, Air France’s finance director, to replace Mr de Juniac at the helm of the French airline. KLM has already decided that Camiel Eurlings is to succeed Peter Hartmann at the head of the Dutch arm.

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