Air France Chief Puts In Papers

Air France head Christian Blanc said late last week he was leaving the company after the Socialist-led government refused to bow to his demands to privatise the airline.

I leave Air France with sadness, but also with pride, an unrepentant Blanc said in a statement, saying he had been forced out after four years during which the company returned to profit for the first time this decade.

Prime Minister Lionel Jospin insisted after a two-hour meeting with Blanc that the government would not privatise the airline, overruling Blanc's high-profile crusade for a sale.

Blanc said he would stand down in early October, when his job came up for renewal. He said the decision would enable the appointment of a chairman whose views were in step with the new government.

 

But he insisted privatisation was the only route for the company, saying Jospin had rejected his proposal to sell off a 49 per cent stake linked to a commitment to privatise the airline in time.

Privatisation is necessary for the development of Air France, Blanc said. In the savagely competitive battle of world air transport, time is running out.

There is not a minute to lose. It's precisely on the speed of development that there was a disagreement, he said.

He said the state had an absolute right to decide that Air France should remain the last large western air company that was state-owned. I have acknowledged that.

Blanc was brought in to turn around the airline in 1993 after a crippling strike forced out Bernard Attali, then head of the carrier.

He has restructured the airline, cut staff and returned it to profit in the 1996-97 year for the first time in eight years.

He said Air France expected to make a 1997-98 consolidated net profit of around one billion francs ($163.9 million) and a higher profit the year after.

Air France was currently the world's eighth airline and he had hoped to take to number five in five years. "

It is possible. But it has to be done quickly, he said.

Air France reported a consolidated net profit of 394 million francs for the 1996-7 year, its first surplus since 1989.

Jospin had expressed hope that Blanc would stay on as chairman after his two-hour meeting.

The government wants Air France to have all the advantages necessary for its development to the first rank of the world's air companies, Jospin's office said in a statement after the meeting.

It is notably determined to carry out changes -- opening up the capital, worker participation, adaptation of management structures -- allowing the company to create international alliances necessary for this development.

Blanc, however, had said he would step down if the government, swept to power in June, reversed plans of the previous centre-right administration to privatise the airline.

The pledge to privatise was made in return for European Commission approval for a 20 billion franc capital injection made in 1994 to 1996.

Jospin's statement noted that France had poured public funds into the airline to help it return to profit and hailed what it called the important efforts by workers and management.