Europe’s biggest hotel operator is considering acquiring a minority stake in Air France-KLM, becoming the anchor investor in the French airline as it struggles to contain a bitter and costly labor dispute.
The prospect of Accor SA, operator of the Raffles, Sofitel, Mercure and Ibis brands, swooping in to buy the French government’s 14.3 per cent stake sent shares in Air France-KLM surging as much as 7.4 per cent on Monday. Accor stock slumped, with analysts at Sanford C Bernstein & Co saying the deal may be risky for the hotel owner based in Issy-les-Moulineaux, France.
“Air France-KLM currently has no CEO, no evident strategy to solve its labor crisis, and is highly exposed to rising fuel prices,” analysts including Richard Clarke said in a note. “While the strategic rationale for Accor is there, we wonder why this cannot be achieved by a commercial partnership.”
A sale of the stake would lessen the threat of political meddling in the airline’s operations, while potentially inflaming tensions amid a protracted labor dispute.
Fifteen days of walkouts that began on February 22 by pilots, cabin crew and ground staff triggered the resignation of former chief executive Jean-Marc Janaillac and cost more than €400 million($467.8 million).
For AccorHotels, an airline partner would help fill rooms across its more than 4,000 hotels in 100 countries. Buying a stake now would follow a 45 percent drop in Air France shares this year, the worst performance in the Stoxx 600 Travel & Leisure index. Few hotel chains have ventured into airline ownership in the past, though airlines have taken stakes in hospitality companies. SAS AB once had a stake in the Radisson brand, for example, and tour operators such as Thomas Cook Group Plc and TUI AG own many of their own hotels.