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Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 11/97 FRANCE REMAINS IN STATE HANDS FOR NOW by Heiko Reuter It was a meeting between friends. Even so, when Air France head Christian Blanc and the new French prime minister Lionel Jospin split up after their meeting on 4 September, they had not come closer by a tenth of an inch. Blanc had urged Jospin to finally agree to the privatization of the French national carrier. Socialist Jospin, however, had already rejected these privatization plans in the election phase. Accordingly, he told the Air France head that he was at a dead end. Christian Blanc gave up the day after his conversation with Jospin. When he took over the airline's top job four years ago, Air France was practically facing bankruptcy. With a strong hand, Blanc carried through an unrelenting rescue program. He managed to overcome the resistance of the strong French unions and succeeded in leading Air France back into the profit zone. For the current year, Blanc had forecasted a plus of approximately DM300 million. Still, the airline's healing process was not completed. The most difficult operation, the privatization, was still on the schedule - until the Socialist party took over the government responsibility in France. Blanc's premature retirement leaves several questions unanswered. Even though an experienced successor has been found with the 53 year old Jean-Cyril Spinetta, who had been heading the domestic airline Air Inter at the beginning of the nineties, insiders describe the socialist Spinetta as a pragmatist rather than an ideologist. Although, when in 1993 he walked out from Air Inter, he did it as a protest against the "liberalization and deregulation politics" of the centre-right government of that era. Will he now have enough power to lead Air France into a new ownership structure? Furthermore, what will be Brussels's reaction? A forever nationalized Air France would get in considerable trouble with the European Union's competition keepers. The EU commission had agreed to a DM six billion cash injection from the French budget in 1994, only after being promised that the airline would be privatized later. However, an exact date was not fixed back then. France's national carrier has become a plaything of politics. A privatization is vital for the world's tenth largest airline in order to be able to compete in the global market of airline alliances. According to insiders, prime minister Jospin is aware of that. Still, that the French government has currently no choice but to block the privatization. A quick concession by the socialist party would be evaluated by the French public as breaking a still fresh election pledge. A high-level Air France manager says: "The privatization will come but, will be delayed." Shortly after Christian Blanc's retirement Jospin had signalled a first concession in the Parisian politics poker. The socialist leader, Francois Hollande, who reportedly is close to Jospin, is favoring a solution in which the government would keep 51 percent of the airline shares. Sources from the airline environment confirm that "there is a clear sign that, beginning next year, Air France will be privatized for 49 percent". The Frankfurt based, German representation of Air France seems to remain unimpressed by the tug-of-war in Paris. The business in the airline's most important foreign market is booming. An employee says: "We are carrying our program through to the end." From page 28 of FLUG REVUE 11/97 Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 11/97 Copyright 1997 by Motor-Presse Stuttgart. All rights reserved. Last updated October 16, 1997 FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany