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Air France offers staff 4 percent raise in bid to end standoff

FILE PHOTO: Tails of Air France airplanes are seen at the Charles-de-Gaulle airport in Roissy, near Paris, France, August 26, 2018. Picture taken August 26, 2018. REUTERS/Christian Hartmann/File Photo

PARIS (Reuters) - Air France-KLM (AIRF.PA) offered its French pilots and staff a 4 percent raise, a union source said on Monday, in a bid to end a pay standoff that has resulted in damaging strikes and the departure earlier this year of the group's last chief executive.

During a meeting with unions on Saturday, new Chief Executive Ben Smith proposed a 2 percent raise retroactively applied from the start of the year, plus another 2 percent next January, the union official said.

Unions may respond as soon as Tuesday to the proposal, which would include a further pay review in October 2019, he added.

Air France declined to comment on the offer, first reported by French media.

"These were discussions with (our) social partners and not negotiations," a company spokeswoman said.

The SNPL pilots' union and others had been demanding a 5.1 percent pay hike to compensate for inflation that had eroded real pay levels in recent years.

The dispute led to weeks of strikes earlier this year, grounding hundreds of flights and wiping 335 million euros ($384 million) off the group's first-half earnings.

Smith joined Air France-KLM last month from Air Canada and rapidly took over direct leadership of the Air France business from the carrier's departing managing director Franck Terner.

Air France-KLM last week announced the appointment of another Air Canada veteran, Oltion Carkaxhija, to a vice-president role including oversight of labour negotiations

(Reporting by Laurence Frost; editing by Richard Lough and Louise Heavens)