Air France CEO to resign after employees reject salary package

PARIS (Reuters) - Air France-KLM Chief Executive Jean-Marc Janaillac said on Friday he would resign after employees rejected a pay deal, plunging the airline into turmoil amid a wave of strikes at its French brand that has cost the company some 300 million euros.

Janaillac said that more than half of the staff at Air France who cast a ballot voted against the pay deal. Turnout was 80.33 percent.

"I take responsibility for the consequences of this vote and will in the coming days tender my resignation to the boards of Air France and Air France-KLM," Janaillac told a news conference.

"I hope that my departure will spark a more acute collective awareness," he added.

Air France-KLM earlier on Friday reined in its 2018 profit and growth expectations, partly due to the effects of the strikes, and said it wasn't able to take advantage of a good market environment for European carriers.

Air France needs to cut costs to keep up with leaner rivals in Europe. Dutch sister company KLM, which has cut costs, saw its profits rise in the first quarter, contrasting sharply with losses at Air France.

Flag-carrying rivals British Airways and Lufthansa have already undergone painful cost-cutting and strikes in recent years as they battled to trim down costs in order to better compete with the rise of low-cost carriers in Europe and new competition from Gulf carriers.

Air France has lagged behind, however, with unions hampering efforts.

(Reporting by Cyril Altmeyer; Writing by Richard Lough; Editing by Ingrid Melander and Victoria Bryan)