Air France-KLM said CFO Frederic Gagey will take over as interim CEO after Jean-Marc Janaillac stepped down because of a labor relations crisis.

Air France CEO Franck Terner and KLM CEO Pieter Elbers will temporarily serve as deputy group CEOs as part of a management committee of three, with Gagey the committee’s spokesman, the group said.

Air France-KLM also named Anne-Marie Couderc as non-executive chairman of the board of directors. She is a former government minister who has also held high-level roles in the publishing industry and was already on Air France-KLM’s board.

The committee will make its decisions jointly, overseeing and monitoring group functions and coordinating strategic matters between the group and its airlines, which, as well as Air France and KLM, also include Transavia, HOP! and Joon.

Elbers said the temporary appointments would give the organization order and stability.

“Through this new committee, I will continue to work for the Air France-KLM Group, as well as for the further successful implementation of our KLM strategy, just as Franck Terner will continue to do this for Air France,” he said, adding the appointments would give the board time to figure out a permanent solution. “It is important that, throughout the group, we restore the good spirit, cohesion, and stability that we had in the early days of our partnership. This was demonstrably successful both for Air France and KLM,” Elbers added.

The airline group’s board said the transitional governance structure was established for “the shortest-possible period required to effectively complete the succession process for the roles vacated by Jean-Marc Janaillac.”

“The board of directors has complete faith in the ability of the management committee and the group executive committee to manage the group’s activities during this transition period,” Couderc said. “The board also asks them to continue the work already under way on Air France-KLM’s medium-term strategic plan, a task which will be handed over to the group’s future governance. For my part, I will pay particular attention to strengthening the group’s cohesion throughout this period.”

Janaillac officially submitted his resignation on May 15, the day of the group’s annual shareholder meeting, having announced his decision on May 4.

Air France workers have taken part in 15 one-day strikes since February, with unions calling for a 5.1% 2018 pay increase to make up for the fact salaries have stagnated for several years.

Hoping to bring an end to the conflict, Janaillac launched a staff-wide consultation on April 26 on a multi-year “growth pact” pay proposal which promised a 7% wage increase over four years but included scope to adjust that in the case of a lower financial result. Janaillac, who had tied his own future at Air France-KLM to the consultation, said he would step down when a majority of staff rejected the plan.

Departing CEO Janaillac told the shareholders’ meeting that the group was facing “one of the worst crises in its history.” He called for a “profound transformation” of Air France, adding that there was no time to be lost. 

The Franco-Dutch group’s board of directors said on May 15: “The board recognizes Jean-Marc Janaillac’s courageous decision and sincerely hopes that it will open the way to the conditions for a transformation at Air France and fresh momentum for Air France-KLM.” It reiterated the strikes would have a negative impact on the group’s financial results—they have cost it €300 million ($355 million) so far.

The board also noted that Air France’s CEO did not have a new mandate to take decisions that would jeopardize the group’s growth strategy and said it had requested to be kept regularly informed of Air France’s labor situation.

Helen Massy-Beresford/Aviation Week helen.massy-beresford@aviationweek.co.uk