Air France Frequence Plus - Rumour: French President looking to fire CEO of AIR FRANCE

Article, in French only though (http://www.letelegramme.com/ig/generales/france-monde/france/air-france-le-directeur-pourrait-etre-debarque-31-10-2009-634895.php)

In sum it says that the Elysée (=Presidency of the Republic, with usually a strong personal involvement of President Sarkozy on headline matters like these) thinks about replacing Pierre-Henri Gourgeon. He is under pressure, not so much for the financial situation of the firm (AF apologizers in the Elysée?;)) or the restructuring programme. But his management style seems very autocratic, he doesn't have support in his executive team and in the workforce. Moreover, he managed very badly the handling of the aftermath of the AF447 crash.

Comments in italics by me for better understanding by readers not initiated to French governance

Thanks creber for sharing ^

Not being very into French politics, what (if any) impact will/would replacing the current CEO have on all the rumours going around at the moment such as abolishing C, cutting down on Y amenities etc?

Thanks creber for sharing ^

Not being very into French politics, what (if any) impact will/would replacing the current CEO have on all the rumours going around at the moment such as abolishing C, cutting down on Y amenities etc?


I think the rumors you mention unfortunately are not rumors...

Thanks creber for sharing ^

Not being very into French politics, what (if any) impact will/would replacing the current CEO have on all the rumours going around at the moment such as abolishing C, cutting down on Y amenities etc?

I believe none whatsoever. There are two reasons why I believe that:


The article, whilst to be consumed with some caution because it merely is a journalist's article and obviously not from an insider, states that the main criticism towards PHG is his handling of the AF447 crash and aftermath. The restrucutring and strategy going forward are not mentioned as causes of concern
At AF a lot of energy does not go into thinking about customers, the market, the product, etc. but about internal politics and labour relations. For instance, the AF management has lost one strong ally which is one of the largest pilot's unions. They have now openly declared war, whilst previously they supported management. Also, PHG's autocratic management style bothers many people around and under him.

The strategy of re-establishing financial performance by saving costs both internally and on the customer end does not seem to be questioned. Management and staff are convinced that there is no market out there for full service carriers in the way AF used to be or LH/LX/OS still run relatively successfully . To speak in hotel terms: the entire company believes that there is a niche market out there for Four Seasons, the rest is Ibis and Formule 1. But they are convinced that there is no market for Hyatt.


Thus, with the entire company supporting the "cost cutting means cutting pax service" school of thinking, even a new CEO will not dramatically change that in the short run. He might modify some specific aspects of it, but don't expect food, a functioning customer care service or an improved FFP from a new guy.

These kind of rumours have reached the media when the President had a friend to "push". Seems likely as someone "external" to AF is mentioned. PHG has been the leading force of change in AF business model for a few years. Some might be happy to see a new man at the helm with other views.

At AF a lot of energy does not go into thinking about customers, the market, the product, etc. but about internal politics and labour relations. For instance, the AF management has lost one strong ally which is one of the largest pilot's unions. They have now openly declared war, whilst previously they supported management. Also, PHG's autocratic management style bothers many people around and under him.

Thanks for clarifying creber and for taking your time on this.

Being in France, where it seems like unions has a strong hold in general, wouldn't one think it would be a good idea to tread with caution, as we know what impact this can have on a company (look at SAS for instance where strikes and lockouts have more or less brought the company to its knees in combination with poor management)?

As said before, I don't have a clue on how AF is run behind the scenes so all these stupid questions ;)

I book a flight, take it from A to B (sometimes end up a C), and either I like it or not :) A little background information is ALWAYS welcomed to maybe enhance my understanding of the operating environment i look at from the outside...

Thus, with the entire company supporting the "cost cutting means cutting pax service" school of thinking, even a new CEO will not dramatically change that in the short run. He might modify some specific aspects of it, but don't expect food, a functioning customer care service or an improved FFP from a new guy.

I have really no information about this issue, so I would be interested in the sources or reasoning that go into "with the entire company supporting the cost cutting" comment.

Being in France, where it seems like unions has a strong hold in general, wouldn't one think it would be a good idea to tread with caution, as we know what impact this can have on a company

Mismanaging labor relations can have a significant negative impact on passengers at AF. The last FA strike was (reportedly) managed by PHG, at a time when JCS was ill. The impact was severely underestimated and, contrary to previous strikes, it had a significant effect on flight operations and passengers; in addition, the possible mistakes made at the time would seem to have adversely impacted the social climate within the company.

As to PHG's management style, one of his first decisions was to bump long-timer Pascal de Izaguirre from his position as one of the deputy general managers to Special Assistant to JCS, just two weeks after he took the CEO position. Hardly a promotion ... I guess every member of the executive committee got the message loud and clear ...

I don't know if it was the last FA strike, but I was caught up in one around late 2007 (i think) at CDG an AF's management of it was a total farce. 5 days in Paris later we got out....

Still they did cover all our costs and provded compensation in record time. After all 5 days in Paris at AF's expense or 5 days in Luanda - you choose!

I don't know if it was the last FA strike, but I was caught up in one around late 2007 (i think) at CDG an AF's management of it was a total farce. 5 days in Paris later we got out....

Still they did cover all our costs and provded compensation in record time. After all 5 days in Paris at AF's expense or 5 days in Luanda - you choose!

That was the one :mad: (Oct 25th-29th). The last strike on record to have been as severe, according to union sources, was the pilot strike in 1998. Years of improvement in labor relations down the drain ...

Yep it was comical what went on. It was a catalogue of screw ups...

1. They had us fly from ABZ - CDG as Regional were not on strike - they must have known our connection was a doubt at best
2. tried to make us sleep on the CDG floor...plat card holders with business tickets. We put up a fight and solved that
3. Upon cancelling the next days flight made sure we left the lounge to stand in a queue for 7 hours to get rebookeded to LAD
4. Found my collegues suitcases, lost mine
5. Didn't actually rebook us to LAD at all, just booking us on SN to Brussels and waitlisting us. Presumably so they could go sorry, yer in Brussels now. Didn;t work, we stayed put.
6. Rebooked us again 3 days later (all that was available) on BA/SAA and we have to find out own hotel for those three days. To be fair, they paid in full - and for my new wardrobe out of Galleries Lafayette.
7. Arrive in JNB to find my suitcase in the AF office at the airport. it got there before me. Brilliant!

It really was a mess......

As to PHG's management style, one of his first decisions was to bump long-timer Pascal de Izaguirre from his position as one of the deputy general managers to Special Assistant to JCS, just two weeks after he took the CEO position. Hardly a promotion ... I guess every member of the executive committee got the message loud and clear ...

Ohh. It was a "promotion". Same way they "enhance" FB all the time...

Yep it was comical what went on. It was a catalogue of screw ups...

1. They had us fly from ABZ - CDG as Regional were not on strike - they must have known our connection was a doubt at best
2. tried to make us sleep on the CDG floor...plat card holders with business tickets. We put up a fight and solved that
3. Upon cancelling the next days flight made sure we left the lounge to stand in a queue for 7 hours to get rebookeded to LAD
4. Found my collegues suitcases, lost mine
5. Didn't actually rebook us to LAD at all, just booking us on SN to Brussels and waitlisting us. Presumably so they could go sorry, yer in Brussels now. Didn;t work, we stayed put.
6. Rebooked us again 3 days later (all that was available) on BA/SAA and we have to find out own hotel for those three days. To be fair, they paid in full - and for my new wardrobe out of Galleries Lafayette.
7. Arrive in JNB to find my suitcase in the AF office at the airport. it got there before me. Brilliant!

It really was a mess......

Sounds like a normal AF screw-up to me. They happen all the time, some of them on larger scale (the one like yours, the one last January), some on a smaller (stuffing the Indian pax in a small room and just one bathroom, the recent Bucarest incident).

Trouble is - and this brings it back to topic - no screw-up as big as it may be will ever result in the CEO of AF (or that of ADP, the mother of all screw ups) to step down. We just have to accept that stuff, listen to AF marketing telling us that they have done everything possible and that they are really sorry if their performance has not met our expectations, and we listen to AF apologists telling us plenty of good excuses why the basic service/functionality that we're asking for is unrealistic and that it is standard practice and that BTW AF is an absolutely top notch company because three weeks ago in First Class someone got a glass of Champagne without asking for it (he must have been an employee). But people that have to stand up for the mess they're creating? Nada.

What does bring CEOs down is bad public relations and a poisening of labour relations. Shows you where the priorities lie.

Whilst that is almost certainly all true Creber, in the example I gave above I actually gave Air France another chance. Why? Well, maybe its because we were all Plat Card holders, maybe because we were in Business class, mayeb because (for a small organisation) we spend a lot of cash on flights with the,. I don't know why, but despite all of those screw ups, they acted upon our complaints incredibly quickly, paid every Euro we claimed for (5 nights at the Marriott Rive Gauche ain't cheap, not for three of us anyway plus all my new clothes) within 2 or 3 weeks.

On top of that, looking at all the evidence, the wrong type of rain at Heathrow leads BA to similar chaos and a similar outcome. Just as an example.....and I doubt you would have got all that refunded...and certainly not in the time AF did it.

Now the point that it doesn;t seem to happen at LH (strikes that is) or even KL is a valid one however and would they react the same way now...who knows. It's all the devaluation of the miles that has led me elsewhere....

What does bring CEOs down is bad public relations and a poisening of labour relations. Shows you where the priorities lie.

It has been a long time since I disagreed with you, but I think you get a wrong reading from this news. My guess is that the report about badly managing the crash was not from a PR point of view, but because some of the actions taken antagonized the staff: they were slow to react to the security concern, they tended to shift the blame towards the crew, and it was badly perceived. It also happened just after a very badly managed strike at the end of last year. I don't think Sarkozy may want to fire PHG because he's focused on placating the union, or thinks AF should do more in that regard, but he became famous for saying that thanks to him, whenever there is a strike in France, nobody even knows about it. The AF strike last year was unexpectedly noticed by the public, contrary the to presidential promises. And the development since of relations between unions and management have shown that a new strike might be even more noticeable by the general public. My guess is that the focus is on diminishing the impact of a major strike and not on placating the unions as a policy.

It has been a long time since I disagreed with you, but I think you get a wrong reading from this news. My guess is that the report about badly managing the crash was not from a PR point of view, but because some of the actions taken antagonized the staff: they were slow to react to the security concern, they tended to shift the blame towards the crew, and it was badly perceived. It also happened just after a very badly managed strike at the end of last year. I don't think Sarkozy may want to fire PHG because he's focused on placating the union, or thinks AF should do more in that regard, but he became famous for saying that thanks to him, whenever there is a strike in France, nobody even knows about it. The AF strike last year was unexpectedly noticed by the public, contrary the to presidential promises. And the development since of relations between unions and management have shown that a new strike might be even more noticeable by the general public. My guess is that the focus is on diminishing the impact of a major strike and not on placating the unions as a policy.

No worries. You don't disagree with me. You just said what I tried saying myself. You just did it much better. Thanks^

Whilst that is almost certainly all true Creber, in the example I gave above I actually gave Air France another chance. Why? Well, maybe its because we were all Plat Card holders, maybe because we were in Business class, mayeb because (for a small organisation) we spend a lot of cash on flights with the,. I don't know why, but despite all of those screw ups, they acted upon our complaints incredibly quickly, paid every Euro we claimed for (5 nights at the Marriott Rive Gauche ain't cheap, not for three of us anyway plus all my new clothes) within 2 or 3 weeks.

On top of that, looking at all the evidence, the wrong type of rain at Heathrow leads BA to similar chaos and a similar outcome. Just as an example.....and I doubt you would have got all that refunded...and certainly not in the time AF did it.

Now the point that it doesn;t seem to happen at LH (strikes that is) or even KL is a valid one however and would they react the same way now...who knows. It's all the devaluation of the miles that has led me elsewhere....

Bravo to AF for acting on your reimbursement claims.

As to things that don't happen at LH: well, unfortunately they do happen as well. Strikes of cabin crew and pilots have happened in the past and may happen again. Also bad weather does from time to time affect LH's hubs, we shouldn't forget that MUC and ZRH lie at the edge of the Alps. I've seen snow in both Munich and Zurich in the past two weeks.

The difference is a different one I guess: when the strike happens, they don't seem to happen for whimsical things like they seem to happen at AF. And when they happen, they are better handled and managed in terms of pax impact. And the snow that I've seen in Munich and Zurich really was a mere thin couple of flakes, didn't stay on the ground for long. But it would have brought down Paris airport, and AF wouldn't know how to handle the effects of it. It's the handling of difficult situations which to me is part of whether or not a carrier is a full service carrier or not. AF is terrible at avoiding such situations, handling them when they happen, and tpyically they're also bad at dealing with customer complaints afterwards. LH/LX is phantastic at avoiding situations (their process planning philosophy is that of Mercedes when it comes to testing: it shouldn't break down at the first little unexpected difficulty; AF has more of the "ca ira" approach to things, a bit like Renault cars. Guess who leads the break-down statistics). LH/LX are also quite good handling irreg ops while it happens, and afterwards they at least treat their loyal customers well and generously.

And it's that inability to handle irregular ops, the negligence in planning and the so what response of far too many AF staff that should be sanctioned.

Again, all valid points though all examples point to Swiss being able to manage better being down to scale of operation perhaps as well as better 'people skills' or customer service orientation? The example you provide of LH along with what we all know about BA's ability to handle chaos suggests (i.e hopeless) it could well be.

Article, in French only though (http://www.letelegramme.com/ig/generales/france-monde/france/air-france-le-directeur-pourrait-etre-debarque-31-10-2009-634895.php)

In sum it says that the Elysée (=Presidency of the Republic, with usually a strong personal involvement of President Sarkozy on headline matters like these) thinks about replacing Pierre-Henri Gourgeon.

To give the job to his son or maybe even to his brother? :D

Call me naif but how exactly can the President of the Republique get rid of the PDG of Air France? I thought it was a public company not a government instrument.

Call me naif but how exactly can the President of the Republique get rid of the PDG of Air France? I thought it was a public company not a government instrument.

Sort of... First of all, the state still holds a small stake (around 17%) in AF. Second, the state often gets involved in certain decisions in big companies in France. Simply when those companies are of "public importance". Thirdly, whilst this is no autocratic country where a ruler simply puts in place all his buddies all over the place, nepotism is more common in France than in some other countries like for instance the UK (I believe) or Switzerland (I am sure). I cannot comment much about other countries as I wouldn't be sufficiently familiar with them.

Call me naif but how exactly can the President of the Republique get rid of the PDG of Air France? I thought it was a public company not a government instrument.

Exactly the same way the President got rid of Société Générale's CEO.