Shares of Air France-KLM crashed as much as 14% on Monday – the company's biggest drop since 2002 – after CEO Jean-Marc Janaillac, announced his resignation as company workers rejected a pay proposal that would've ended a crippling strike.

The company's shares have slipped 40% since the beginning of the year, making it the worst performer in the 26-stock Bloomberg Airlines Index. Analysts at Bernstein warned that Janaillac's departure is the “worst possible outcome” for the company's stock, leaving Air France-KLM with no CEO, no labor contract, an ongoing dispute and “emboldened” unions.

As Bloomberg reported, while the airline had maintained almost all long-haul flights during the latest walkout, it was forced to cancel 20% of its medium-haul services on Monday. Last week, the company warned that the strengthening euro and rising wages would only compound the pressures from the company's walkouts.

Janaillac, who held a press conference to announce his departure on Friday, launched a massive gamble by holding an online consultation on the pay offer with the company's workers. He lost the gamble when 55% of staff unexpectedly rejected the proposal, which was for a 7% increase over four years. Janaillac held a short press conference late Friday to announce his planned resignation. While it has slid under the US news radar, Air France workers have hosted 13 days of labor action, joined by pilots, cabin crew, and ground staff since February, on several occasions paralyzing transit across Europe.

Meanwhile, the rejection of Janaillac's proposal, and his resignation has only strengthened the strikers' position. A majority of labor representatives need to approve a compensation package for a deal to take effect.

Meanwhile, the European travel chaos is set to get worse as travelers with Air France tickets whose flights are delayed or cancelled can rebook at no additional cost. Travelers should expect last-minute delays and cancellations.