Canadian tipped as new CEO for Air France-KLM

Air France-KLM may name its new chief executive during a board meeting on Thursday, French newspaper Liberation reported, tipping Air Canada's chief operating officer Benjamin Smith as the winning candidate.

The Franco-Dutch airline has been searching for a new boss since Jean-Marc Janaillac resigned in May, having gambled his job on getting Air France staff to accept a new pay deal after months of strikes.

The nomination of a Canadian to lead Air France-KLM would be unprecedented since the two operators merged in 2004 to create what was then Europe's biggest airline.

The group has previously favoured French CEOs.

Air France-KLM told AFP on Wednesday that the nomination process was ongoing and "nothing has been decided for the moment".

Smith notably led labour negotiations with pilots' and flight attendants' unions ahead of the launch of low-cost operator Air Canada Rouge, signing ten-year agreements with both of them.

Such experience might come in useful at Air France-KLM, which has suffered months of disruptive and costly strikes by French staff demanding better salaries.

Janaillac had offered a seven-percent pay rise over four years, saying he would quit if it was rejected -- only for 55 percent of staff to vote down the offer.

Smith led the expansion of Air Canada to more than 200 destinations on six continents as well as the launch of its budget sister airline, according to its website.

He entered the airline business in 1990 with Air Ontario, later opening his own travel agency.

His potential nomination has already raised complaints from Philippe Evain, head of French pilots' union SNPL, who said appointing him would mean "giving the keys of Air France to the Americans".

Air France shares have plunged more than 35 percent since the start of the year, although they have stabilised since Janaillac's departure.

The group this month estimated the cost of the 15 days of French strikes between February and June at 335 million euros ($391 million).

It reported net profits of 109 million euros for the second quarter -- down sharply from 593 million for the same period last year, although that figure was boosted by new accounting rules.