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renewed fleet, with more Dreamliners in the pipeline. KLM is set for the future. I know several senior staff working at
THE FUTURE OF KLM AND AIR FRANCE “If Air France does not make efforts to become more competitive, allowing this flagship to be at the same level as Lufthansa and other airline companies, Air France will disappear,” French finance minister Bruno Le Maire said on May 6. This statement followed planned industrial action and the walk-out of chief executive Jean-Marc Janaillac. Business Traveller Forum users were quick to respond.
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➜ M AR CUS GB It seems that Air France staff are in a self- destructive, systemically selfish mode, which may lead to the company not surviving. This was emphasised by the French finance minister. Shares fell 14 per cent today (May 7), to less than half their value in December. Is it time that KLM divides itself completely from failing Air France? KLM is making profit, the brand is strong, and it has, as a company, endeavoured to adjust and do its best. The attitude is so different within Air France, and you see it at its hubs and on-board. There appears to be a distinct attitude and behaviour at each airline that simply does not meet. I have flown KLM for 25 years. It
has been an excellent airline. I find everyone sees it as reliable, hardworking, constantly striving to be better, team- oriented (a family, as staff regard it), and one of Europe’s best airlines. It has great respect in many of the countries it serves. KLM retains many destinations within
Europe (more with its feeder network), and its long-haul network spans most of the world (though not Oceania). KLM refrains from going lower cost with Buy On Board, and KLM Cityhoppers are expanding through smaller airports in Europe. There is an almost completely
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KLM. Patience and tolerance (which the Dutch seem to have more of than most European nationalities) has run out. Is it financially possible for KLM to
break free as its own company? Financial reports are often mixing the
two, and hiding the sheer waste and destruction Air France is making to the KLM brand. Hop! and Joon [sub-brands] are not working. I do not know why it is even contemplating taking on Alitalia. Surely the Dutch government must
now have some strategy, should this continue, to separate KLM and allow it to thrive and stand on its own? I cannot see the Dutch wanting to lose
KLM, nor the excellent Schiphol hub – always voted the best in Europe, and looking 20 years ahead with expansion. How secure is the [Air France-KLM]
Flying Blue programme, and your Miles? These can be worth a lot for redeemed tickets worldwide in business class. All of us at the BT Forum regard our collections of miles as very valuable! I would like to see these airlines
divided and separated. Let each fall or thrive on its own results, and reputation, and not let Air France hide behind the success of KLM.
➜ ED S KI7 7 7 It is about time the French appoint a professional rather than a political chairman: someone capable of dealing with the unions and restructuring Air France. Results over 2017 prove that Air France-KLM is heading for the cliff, and going along with the unions’ demands, [it is taking] “a big leap forward” – normally not the best strategy while at a cliff’s edge. The cost of Air France’s personnel
[wages] is around 30 per cent of its revenue, while at British Airways and Lufthansa it is estimated at around 23 per cent; at low-cost carriers such as
Easyjet and Ryanair that proportion is around 15 per cent. If Air France were to increase salaries
by five per cent [the wage bill] would rise to a level that is uncompetitive. KLM has a result of 8.8 per cent
[profit margin], where Air France didn’t get any further than 3.7 per cent – both in a bullish market. We all know that won’t last forever; strong economic headwind is always just around the corner. Fuel prices are rocketing, competition is fierce from low-cost carriers such as Norwegian, Ryanair or the ME3 [Emirates, Qatar Airways, Etihad Airways], which are cutting into some of the most profitable routes. Politicians are getting involved now.
The transport ministers of France and the Netherlands had a conversation about the situation and they have reiterated that this is an Air France-KLM problem for them to resolve. The French prime minister has expressed that when the airline group gets into financial difficulties the government will not bail them out. Dutch members of parliament are
now openly discussing the option of withdrawing KLM and Transavia [its low-cost subsidiary] from the Air France- KLM group. Something done in the same way as the Dutch government did with ABN/AMRO, the Dutch banking group. KLM and Schiphol airport are too big a financial and economical interest to the Dutch to let them be ruined by totally clueless French management and unions. Another option discussed in the
Dutch media is to appoint Pieter Elbers, chairman of KLM, as chairman of Air France-KLM group. He is the chairman of the only successful part of the Air France- KLM group, has turned KLM around, and has excellent relations with the Dutch unions and the personnel. Dutch management and unions
have much more economic sense and willingness to compromise in the interest of the organisation than the French. Let’s call it common sense and realism.
bus ine s s tr a v el ler .c om
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