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Recorded at CAPA Airline Leader Summit, 17-18 May 2018

KLM CEO Update: Innovation, Social Media And Air France

KLM president and CEO Pieter Elbers highlights how the airline is using social media as a key tool for conversations with its customers. He talks about how the airline is modernising its fleet and how this will help it overcome increasing fuel costs and the continued evolution of the low cost long haul model. He also discusses the recent operational issues at Air France and how they are impacting the Dutch flag carrier.

Transcript

Pieter ElbersThe relevance of social media at KLM has grown enormously over the years. Where it started sort of out of necessity back in 2010, if you see where we are today, it has been a very much integral part of what we do for our customers.

The social media basically has developed from being, I should say, just conversational to a much broader basis where we have some commercial activities. We use it very much for our brand, for our reputation, and increasingly with new technology, we can use it for even a more personal approach towards our customers.

I guess innovation is part of what makes it thick, it's part of what people like to work with us for. It's part of what's makes customers happy. Once you're on that track and you got positive feedback and positive response from our customers, it motivates us and inspires us to continue on that track.

Well 2017 has been a great year for KLM. Clearly with the sort of positive momentum of the world economy and some of the strategic choices we've made in the last few years, we have been able to develop pretty good in 2017. We had a record number of passengers on board of our aircraft, a record load factor, a whole lot of new destinations are being opened. With that in fact a good customer appreciation as well. So with all the aspects, be it network, be it fleet, be it customers, we have really progressed going forward.

We started of course with the influx of the 787-9's, we are very happy with these aircraft, they are wonderful performing in our network. Customer appreciation is good, and also in 2017 we phased out the Fokker aircraft, which being Dutch was a bit of a sentimental moment. But with that we are now the largest operator of Embraer aircraft on the European continent. Our customers just love it, so we continue on that track of renewing the fleet, making sure that we get modern aircraft in. With that get the efficiency higher and better, and the customer appreciation also better.

Well Air France had a long range of strikes, 15 days of strikes in the last couple of months, which clearly has been very bad for the image of our group. Especially outside our home markets, which is incredibly important for us, we act as one organization, as one team. By our team in Brazil they're selling Air France and KLM as sort of one entity, and I think they do a great job. But with that there's been a lot of pressure on them with the strikes, it's clearly not helping, also not helping KLM in that respect. So we're working very hard together to make sure that we could continue to move forward and we keep the negative effects on it as much, as limited as much as possible.

Well clearly the fleet renewal, which we started already a few years ago is helping us to address also this rise of fuel prices. Having said that we still have some 747's in play, so we're not done yet in all our fleet renewal programs. We do have a lot of programs in place where we optimize fuel and clearly with the rising price of fuel we sort of put more emphasis on these programs again. I think these are really the two most important factors going forward.

Well with the long haul low cost, I think for all of us we're avoiding making the same mistakes as we did 20 years ago on the European continent. So we try in fact to sort of proactively adjust what we're doing. So we have increased our utilization, we have sort of increased our efforts in some of our partnerships, and with that offering a great network to our customers. We have made our prices and our proposition to the customers more dynamic, more flexible. We start on the Trans-Atlantic with prices excluding bags, so we really sort of do things much more in advance than we would have done 20 years ago on the European side.

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