orbitmic

Absolutely nothing to be ashamed of! You're absolutely right that this was a mistaken statement, I should have just said that they had double voting rights on their 17.6% of shares!

I've just found some more information from AFKL:

- In total, there are 300,219,278 shares.
- In total, including the double voting rights, there are 373,995,635 voting rights
- Some shares do not come with voting rights. In total, there are 368,729,637 exercisable voting rights

If my maths is correct:

- From line 1, we find that as the state has 17.6% of the shares, ie approximately 52,838,593 shares;
- As they are getting double voting right on those, they would get 105,677,186 voting rights. I believe that all state-own shares are coming with voting rights;
- That is a minor point but conversely, from line 2 means that the double voting rights add 73,776,357 additional votes in total, so that gives us sense of how many of the double voting rights benefit other share holders: approximately 73,776,357 - 52,838,593 = 20,937,764 give or take a few because of rounding of the 17.6%.
- Another way of saying the same thing is that approximately 71.6% of the double voting rights benefit the state.
- If I didn't miss anything obvious in my calculations above, the state owns 105,677,186 exercisable voting rights out of a total of 368,729,637, which is about 28.7% of the total exercisable voting rights if my calculations are correct.

As you say, this is by no means enough to be dominant on their own (and definitely nowhere near 35% if quite a bit above 23.5%, let alone about 16% which was my main point) but considering that a few of the other shareholder (not least the employees) will likely vote quite conservatively against a very "radical" leader, and that the figures that you provide above suggest that almost all of the other large shareholders that you mention are investment companies or banks which traditionally do not tend to take a very active role in companies' management, I would argue that it would take a rather extreme coalition of the other interested investors for the state not to be able to have a largely free rein in the nomination of AF leaders.

http://www.airfranceklm.com/sites/de...l16_va_def.pdf

San Gottardo

It's the very fact that the French government passed a law that ends up giving them double voting rights which is scandalous in the first place.

So, to point out that it's normal for a dominant shareholder to have a decisive say in the appointment of the CEO is a bit misleading as it omits how that shareholder became that dominant.

orbitmic

Like you, I don't really like the double voting rights bill, as I would prefer a "one share one vote" principle on the whole, but to be honest, the French government merely copied similar laws that have already existed in many other countries for years - including the USA, Denmark, Italy, Sweden, etc.

Also, other countries like Germany and Italy have far more permissive laws in terms of creating non-voting shares which largely have the same effect (over 20% of shares in Germany and Italy come with no voting rights while the proportion is about 1% in France or the Netherlands).

So in practice, France is not deviating from the one share-one vote any more than many other Western countries (indeed, in practice, less than many "virtuous" economies) have been for years without anyone complaining. One could even argue that the French criterion which is time based is more transparent and fairer than some of the other criteria used in a number of countries including the country of ownership which is quite openly discriminatory.

San Gottardo

I should have been more precise: even the fact that there are share with no voting rights bothers me. That does exist in many companies, and often has good reasons. The difference is that in those other countries that I am aware of this is a result of the companies' own corporate governance, whereas in France it's (yet again) something state-imposed, and on top of that imposed by the state for purely self-serving reasons (=the state believes that it is well positioned and capable of shaping the country's economy by meddling in corporate matters).

To take an analogy and compare shareholder behaviour: the French state holds 17.6% of shares and 28.6% of voting rights. That plus the an attitude that AFKL is a "fleuron national" leads them to think that this is yet another place where they can place political buddies like JMJ. In Germany, the Land Niedersachsen (German region of Lower-Saxony) has 13.4% of shares and 20% of voting rights of Volkswagen. Was there *ever* a case where the Land would have the idea of imposing the former CEO of the Hanover tramway company as the CEO of Volkswagen, or even only just for a position in middle management, even if the chap has previously been a regional sales manager for Air Berlin?

It's very difficult to evidence my frustration with French economic management with just one number or one law. It's the entire system which smacks of cronyism and which prevents the most capable talent to run companies.

orbitmic

Again, I think we are fully agreed on the fundamental question, which is that it is a bad system. That said, on the (rather marginal) detail of the double voting right, I actually believe that both Italy and Sweden passed the relevant laws for the exact same reasons as the French - a mixture of being a "state knows better" mentality (which, like you, I disagree with. I am all in favour of the state being powerful when it comes to public services, but I think that if the state is going to get involved in private companies in competitive markets, it should be a mere investment and let to be run as such) and attempt to reassure public opinions which, whether we want it or not, also believe that the state will be more "socially conscious" than private investors. The example you take from Germany also shows how there too the system indeed often favours the public authority.

Again, I fully agree with both points, and that to me is far more central than the question of the double voting rights. It is not about carving yourself a disproportionate right, it is about using it for the right thing. While I tend to prefer the one share-one vote system, I could in some way understand large public investors wanting to keep power in case a strategic company proposes to take a highly problematic decision for whatever reason (e.g. merger with a major "enemy", a massive delocalisation plan that could be avoided, etc) but to place your pals in positions of power? Never.

brunos

Now I fully agree with you.
Eventhough some of the financial institutions holding shares on behalf of their clients are a bit activist (they did oppose the Florange law), they are extremely unlikely to vote against a CEO proposed by the Board.

But the Florange law, whose sole purpose is to give more power to the French State in all its holdings, is indeed scandalous as mentioned by San Gottardo.

stimpy

Brief report on the news today about the strategy and about the pilots wages...

(in French)

bodory

Stopping the expansion of Transavia
+ Starting a low-cost for long-haul from a blank page
+ First topic on top of that blank page being pilot's salaries
= I fear the worst

Of course I would like to be wrong.


Edit: it seems we are back to the (good) old days of Air France + UTA + Air Inter

James Anstey

I don't believe that the theory of creating a new low-cost airline, to compete with Emirates, Qatar, Etihad, is the way. I think it's a mistake! I believe in a better conduct and adequacy of the company, remodeling your sales process. Getting up with 50%, 60% of the capacity of an airplane is unforgivable. This should be reviewed, company sales policies are obsolete and lead to this.