It's a question of bad timing. Christian Blanc's departure as chairman of Air France has come at a fragile time, midway through the airline's restructuring process.

Blanc resigned in September after the government ruled out selling off a majority stake in Air France. 'The captain has abandoned his ship in the middle of the storm,' laments Christian Paris of Air France's pilots union, SNPL. Blanc will leave the carrier in early October. His departure comes at a key time, as Air France was starting to show returns on the tough restructuring programme Blanc introduced on his arrival in 1993. The airline is targeting a net profit of FFr1 billion (US$164 million) in 1997 and is completing the thorny merger between Air France and Air France Europe. 'Air France had shown signs of becoming a very real competitor. It must hope it doesn't run out of steam,' says Chris Tarry, an analyst at Kleinwort Benson in London.

The government was set to name Blanc's successor at presstime from a shortlist that includes ex-Air Inter president Jean-Cyril Spinetta, and Jean Pierson, managing director of Airbus. Blanc's departure did not come as a complete shock. He saw privatisation as 'necessary for the development of Air France' and had warned that he would leave unless that happened. SNPL's Paris is disappointed by Blanc's move. He says signals by the government that it may initially sell off 49 per cent of Air France are an encouraging first step towards privatisation. 'Blanc couldn't expect the government to do everything he wanted immediately'.

Pascal Michel of Air France Group's main union, CGT, suggests Blanc's departure may have been precipitated by his difficult relations with the unions.'He had failed with his employee relations within the company.' says Michel. Social unrest came to a head earlier this year in a series of strikes in protest at the imposition of lower working conditions at Air France Europe as part of the merger with Air France.

One certain reason behind Blanc's departure was his belief that Air France's state ownership will handicap it in the hunt for alliances with airlines in the private sector - the carrier has agreed to cooperate with Delta Air Lines and Continental Airlines. It is a big task for 'Air France to persuade Continental and Delta to conclude a partnership with a state-owned airline' says Eric Kintz, at consultants Roland Berger & Partner in Paris.

The government's insistence on maintaining Air France's majority state ownership contrasts sharply with moves in other European countries to privatise their airlines. 'In the ruthlessly competitive battle among airlines worldwide, the clocks are ticking away. There is no time to lose', Blanc said in his resignation speech. In contrast to the French position, Bonn was set to place its remaining 37.45 per cent stake in Lufthansa on the stock market on 13 October.

Lois Jones

Source: Airline Business