Benjamin Smith leaves Air Canada with the airline in a strong financial position and its stock up almost 20-fold since 2010.Chris Donovan
Benjamin Smith says he has flown on Air France three or four times a year for the past 15 years. He will be doing it much more often starting in September.
Mr. Smith, Air Canada’s president of passenger airlines and chief operating officer, was appointed on Thursday as chief executive of Air France-KLM, one of the giants of the European industry that are beset by labour strife and fierce competition from low-cost airlines, other European carriers and a triumvirate of Middle East airlines.
“As an airline enthusiast, you try to fly as many carriers as possible, not just Air France, but KLM as well, British Airways, Japan Airlines,” Mr. Smith, 46, said on Thursday, in explaining that, as No. 2 executive at Air Canada, he needed to check out the competition.
Mr. Smith’s 16-year career at Air Canada ends with the airline in a strong financial position and its stock up almost 20-fold since 2010. He takes over a company created in 2004 by the merger of the flag carriers Air France and KLM of the Netherlands.
His task, as he acknowledged to The Globe and Mail on Thursday, will be challenging.
“These two carriers are under enormous, enormous pressure and are facing competitive challenges that have never been the case in either airline’s history,” Mr. Smith said.
Air France has been battered by strikes and a deep divide between management and its unions that cost Mr. Smith’s predecessor, Jean-Marc Janaillac, his job. Mr. Janaillac resigned earlier this year after unions voted against a new labour agreement.
Mr. Smith said his priority is to convince Air France employees they are the airline’s most important assets.
“I have to concentrate on earning the trust and respect of the teams at Air France-KLM and management,” he said. “At the same time, I have to learn to trust and respect [these groups] so that we can have a proper dialogue.”
He said he believes the employees do not think previous leaders saw them as crucial to the airline.
“A global champion in the form of Air France and KLM is something that employees want,” he said.
Air France pilot unions and other employees protested against Mr. Smith’s appointment even before it was announced after an Air France KLM board of directors meeting.
“The trade unions would like to state that it’s inconceivable that the company Air France – which has been French since 1933 – would fall into the hands of a foreign director,” the unions said in a statement.
Despite the protests, Mr. Smith said the Air France-KLM position is the No. 1 opportunity in the global airline industry. “It’s very exciting for me because the enormous challenges that the Air France-KLM group faces are ones that I’ve experienced in the past and I believe can be overcome.”
The choice of Mr. Smith as the company’s first non-French CEO makes sense, said aviation industry consultant Robert Kokonis, president of Toronto-based AirTrav Inc.
“The fact that he’s not French is a positive for Air France-KLM – bring an outsider in who’s got a great track record of finding a way to get labour peace,” Mr. Kokonis said.
Mr. Smith pointed to his involvement in securing a 10-year, no-strike agreement with Air Canada’s pilots union and similar agreements with other unions as examples of how he helped change the airline’s culture.
“The success we had in aligning the interests of our staff with the objectives of the corporation has really worked out and it’s worked out for all stakeholders,” he said.
Leslie Dias, a national representative for Unifor, which represents Air Canada’s sales agents and counter staff, said Mr. Smith differed from previous Air Canada managers in that he did not think that discussing issues directly with union leaders was beneath him and tried to be aware of human resources issues before they became big problems.
“He is completely approachable, wants to be approached and wants to deal with problems before they explode,” Ms. Dias said.
Mr. Smith said the long history of the two carriers — KLM is the world’s oldest airline and Air France was founded in 1933 — is an asset.
He noted that legacy competitors Deutsche Lufthansa AG of Germany and International Airlines Group, parent of British Airways and Iberia of Spain, have improved their financial performance.
“The fact that Air France and KLM are not operating optimally is a gift to these two other groups,” he said.
When asked about his French, he said he was a French immersion student when he was younger, but professed to be “a little out of practice. I’m not bilingual, but I’m okay. Hopefully, I’ll be able to quickly improve.”
In an internal memo to employees, Air Canada CEO Calin Rovinescu lauded Mr. Smith’s “stellar” contributions to Air Canada’s turnaround.
In a statement, the airline congratulated Mr. Smith and said it wishes him well, but did not identify a successor.
Mr. Smith was the leading candidate to replace Mr. Rovinescu.
"There have been many architects of Air Canada’s highly successful transformation, and our deep and highly experienced leadership team will continue to deliver on our global ambitions, achieve our targets and drive our operational performance well into the future,” Mr. Rovinescu said in the statement.