The French Finance Minister on Sunday raised the pressure on Air France managers and unions to resolve a stand-off over wages, saying the government would not ride to the carrier's rescue as it grapples with worker strikes and a leadership vacuum.
The dispute at Air France-KLM's French arm intensified on Friday when staff rejected a pay deal, prompting the group's chief executive to resign and raising questions over the airline's capacity to cut costs and reform.
Finance Minister Bruno Le Maire urged the company and workers to resume talks, delivering a blunt assessment of the airline's future as he warned the state's 14 per cent Air France-KLM stake was no guarantee it would pick up the pieces.
"If Air France does not make efforts to become more competitive, allowing this flagship to be at the same level at Lufthansa and other airline companies, Air France will disappear," Mr Le Maire told BFM television.
"We're minority shareholders ... those that think that whatever happens the state will come to Air France's rescue and soak up Air France's losses are mistaken," Mr Le Maire said.
Air France-KLM chief executive Jean-Marc Janaillac, who will stay on until May 15, had been battling to cut costs to keep up with competition from Gulf carriers and low-cost airlines.
Rivals like British Airways and Lufthansa have already gone through painful restructurings to cope.
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[ Air France-KLM CEO to step down after pay offer rejected ]
[ This one-hour flight is the world's busiest route ]
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Air France-KLM, which reported widening losses in the first quarter even as profits at Dutch carrier KLM improved, has reined in growth expectations for 2018 after walkouts at the French airline.
Strikes have already cost the company €300 million ($359 million) and stoppages by pilots, ground staff and other workers are due to resume on May 7 and 8. Close to 85 per cent of flights are likely to run on Monday, the carrier said.
Air France-KLM's board is set to announce an "interim governance solution" on May 15 following Mr Janaillac's departure. The company declined to comment further on what format that would take or how long the transition would last.
Delta Airlines and China Eastern both hold 9 per cent of Air France-KLM.
Until new management plans are in place, Air France executives lack a mandate to continue negotiations with unions, prolonging the dispute.
Some worker representatives hit back at Mr Le Maire on Sunday, after he called their demands unjustified.
Unions had been calling for a salary hike of 5.1 per cent in 2018 alone, and staff rejected a management pay deal offering 7 per cent wage increase over four years.
"Our demands are far from astronomical," Yannick Floc'h, vice-president of the SNPL pilots union, told BFM TV later in the day, adding there was room to find middle ground between the two sides. "I think we can find a way out."
Others, including the more moderate CFDT union, which had urged Air France to back management's pay proposal, warned that "dialogue was blocked" and said the SNPL was too inflexible.
"There's reason enough to be worried," CFDT leader Laurent Berger.
The Air France turmoil has coincided with other strike action as rail workers press on with rolling stoppages to protest President Emmanuel Macron's planned overhaul of SNCF, the state-run train operator.
French travellers have faced transport misery since early April, and Mr Le Maire said the drag on economic growth from the strikes stood at around 0.1 percentage points of output as tourism and the transport of raw materials took a hit.
Representatives from Air France unions are due to meet on Monday. French Prime Minister Edouard Philippe is also due to meet rail unions for talks over the SNCF stand-off.
Venue: Sharjah Cricket Stadium
Date: Sunday, November 25
The rules of the road keeping cyclists safe
Cyclists must wear a helmet, arm and knee pads
Have a white front-light and a back red-light on their bike
They must place a number plate with reflective light to the back of the bike to alert road-users
Avoid carrying weights that could cause the bike to lose balance
They must cycle on designated lanes and areas and ride safe on pavements to avoid bumping into pedestrians
MATCH INFO
What: Brazil v South Korea
When: Tonight, 5.30pm
Where: Mohamed bin Zayed Stadium, Abu Dhabi
Tickets: www.ticketmaster.ae
How Voiss turns words to speech
The device has a screen reader or software that monitors what happens on the screen
The screen reader sends the text to the speech synthesiser
This converts to audio whatever it receives from screen reader, so the person can hear what is happening on the screen
A VOISS computer costs between $200 and $250 depending on memory card capacity that ranges from 32GB to 128GB
The speech synthesisers VOISS develops are free
Subsequent computer versions will include improvements such as wireless keyboards
Arabic voice in affordable talking computer to be added next year to English, Portuguese, and Spanish synthesiser
Partnerships planned during Expo 2020 Dubai to add more languages
At least 2.2 billion people globally have a vision impairment or blindness
More than 90 per cent live in developing countries
The Long-term aim of VOISS to reach the technology to people in poor countries with workshops that teach them to build their own device
Jebel Ali Dragons 26 Bahrain 23
Dragons
Tries: Hayes, Richards, Cooper
Cons: Love
Pens: Love 3
Bahrain
Tries: Kenny, Crombie, Tantoh
Cons: Phillips
Pens: Phillips 2
EMILY IN PARIS: SEASON 3
Created by: Darren Star
Starring: Lily Collins, Philippine Leroy-Beaulieu, Ashley Park
Rating: 2.75/5
Company profile
Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
Investors: Investcorp, Liberty City Ventures, Fatima Gobi Ventures, Primal Capital, Wealthwell Ventures, FHS Capital, VN2 Capital, local family offices
SPECS
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Start-up hopes to end Japan's love affair with cash
Across most of Asia, people pay for taxi rides, restaurant meals and merchandise with smartphone-readable barcodes — except in Japan, where cash still rules. Now, as the country’s biggest web companies race to dominate the payments market, one Tokyo-based startup says it has a fighting chance to win with its QR app.
Origami had a head start when it introduced a QR-code payment service in late 2015 and has since signed up fast-food chain KFC, Tokyo’s largest cab company Nihon Kotsu and convenience store operator Lawson. The company raised $66 million in September to expand nationwide and plans to more than double its staff of about 100 employees, says founder Yoshiki Yasui.
Origami is betting that stores, which until now relied on direct mail and email newsletters, will pay for the ability to reach customers on their smartphones. For example, a hair salon using Origami’s payment app would be able to send a message to past customers with a coupon for their next haircut.
Quick Response codes, the dotted squares that can be read by smartphone cameras, were invented in the 1990s by a unit of Toyota Motor to track automotive parts. But when the Japanese pioneered digital payments almost two decades ago with contactless cards for train fares, they chose the so-called near-field communications technology. The high cost of rolling out NFC payments, convenient ATMs and a culture where lost wallets are often returned have all been cited as reasons why cash remains king in the archipelago. In China, however, QR codes dominate.
Cashless payments, which includes credit cards, accounted for just 20 per cent of total consumer spending in Japan during 2016, compared with 60 per cent in China and 89 per cent in South Korea, according to a report by the Bank of Japan.
AUSTRALIA SQUADS
ODI squad: Aaron Finch (captain), Ashton Agar, Alex Carey, Pat Cummins, Josh Hazlewood, Marnus Labuschagne, Mitchell Marsh, Glenn Maxwell, Kane Richardson, Steve Smith, Mitchell Starc, Matthew Wade, David Warner, Adam Zampa
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The Specs
Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
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Manchester United's summer dealings
In
Victor Lindelof (Benfica) £30.7 million
Romelu Lukaku (Everton) £75 million
Nemanja Matic (Chelsea) £40 million
Out
Zlatan Ibrahimovic Released
Wayne Rooney (Everton) Free transfer
Adnan Januzaj (Real Sociedad) £9.8 million
Company Profile
Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000
COMPANY PROFILE
Company name: Clara
Started: 2019
Founders: Patrick Rogers, Lee McMahon, Arthur Guest, Ahmed Arif
Based: Dubai
Industry: LegalTech
Funding size: $4 million of seed financing
Investors: Wamda Capital, Shorooq Partners, Techstars, 500 Global, OTF, Venture Souq, Knuru Capital, Plug and Play and The LegalTech Fund
Four reasons global stock markets are falling right now
There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:
1. Rising US interest rates
The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.
Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”
At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.
2. Stronger dollar
High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”
3. Global trade war
Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”
4. Eurozone uncertainty
Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.
Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”
The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”
COMPANY PROFILE
Company name: Sav
Started: 2021
Founder: Purvi Munot
Based: Dubai
Industry: FinTech
Funding: $750,000 as of March 2023
Investors: Angel investors
