KLM Royal Dutch Airlines
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- KLM Royal Dutch Airlines
P.O. Box 7700
1117 ZL Schiphol
- Main hub
- Amsterdam Schiphol Airport
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- Full Service Carrier
- Domestic | International
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- Part of Air France-KLM S.A.
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Established in 1920, KLM Royal Dutch Airlines is the national carrier of the Netherlands. KLM operates an extensive network which includes services within Europe and to Asia, Africa, North America, Central and South America and the Middle East. The carrier also operates freight services, and handles all service operations from its hub at Amsterdam Schiphol Airport. KLM is a founding member of the SkyTeam alliance, and is part of Air France-KLM S.A.
Location of KLM Royal Dutch Airlines main hub (Amsterdam Schiphol Airport)
276 total articles
Pilot strikes at Lufthansa. Again. A strike ballot among British Airways cabin crew. A guilty verdict for Air France workers who assaulted an executive during a union protest. These were all headlines in late Nov-2016, following Air France pilot and cabin crew strikes in summer 2016. Labour relations at Europe's three biggest legacy airline groups are an ongoing challenge.
A CAPA report in Jun-2016 highlighted the growing number of articles on CAPA's website mentioning the word 'strike'. It raised the possibility that if the rate continued through the year, 2016 could be the biggest year for strike-related articles since before the global financial crisis. With a little under a month still to go, this year has already comfortably passed this milestone.
To a large extent labour unrest grows as airline industry profits increase. However, rather than hoping for an industry downturn to reverse the rise in the cycle of strikes, airline CEOs are talking tough – a line long taken by IAG's Willie Walsh. Lufthansa's Carsten Spohr has said that taking on the pilots is "about the future of Lufthansa", noting that it has “no chance of survival" if it gives in to pay demands (Bloomberg, 24-Nov-2016).
Qatar Airways turns 20 in 2017. The once tiny regional airline has become a global powerhouse and is reshaping oneworld, the alliance to which it belongs. Qatar has stakes in IAG and LATAM, and Qatar Airways CEO H.E. Akbar Al Baker has told CAPA that in the near future he expects Qatar to make acquisitions in two additional airlines, aside from Meridiana. He said the additional airlines would be successful airlines, as "We are not going to collect crap".
Strategic partnerships without equity are important; Mr Al Baker hopes American Airlines will cease its partnership with Etihad Airways and work solely with Qatar Airways, even forging a multilateral JV anchored around American, British Airways/IAG and Qatar. Qatar is heading towards a fleet of 250 aircraft in 2-2.5 years' time. Mr Al Baker expects recently ordered 787-9s to replace 787-8s, while an LoI for 737 MAX 8s will be to replace Qatar's A320s and grow that fleet.
Air France-KLM, Lufthansa & IAG: 3Q2016 results may signal a cyclical peak in Europe airline margins
Air France-KLM, Lufthansa Group and IAG collectively reported a fall in operating profit and operating margin in 3Q2016, after growth in 1H2016. Individually, only IAG avoided a decline in its operating margin. IAG also remained the most profitable, and Air France-KLM the least profitable, in the most important quarter of the year.
The margin contraction in 3Q resulted from a bigger fall in unit revenue relative to 1H, without a matching fall in unit cost (in spite of lower fuel prices). Passenger unit revenue fell by 6% to 7% for all three (adjusted for currency movements), with long haul markets especially weak. Unit revenue was particularly soft on routes to Asia Pacific and on the North Atlantic (and, for Lufthansa Group) on the South Atlantic.
The combined operating margin of the three has been a good indicator for European airlines overall in the past. The outlook for FY2016 for each still suggests that there will be margin improvement for the year as a whole. This could be in line with, or slightly above, the cyclical peak reached in 2007 – before the global financial crisis. Against this backdrop, the decline in margin in 3Q2016 suggests that further improvement may be difficult in 2017.
As the US-Gulf airline dispute loses momentum with the American government, the big Middle East aeropolitical debate will now shift across the Atlantic to Europe, where the European Commission has a mandate to try to negotiate an open skies agreement with Qatar and the United Arab Emirates, as well as other countries/blocs, including Turkey and ASEAN.
Qatar Airways CEO H.E. Akbar Al Baker gave a keynote presentation at the recent CAPA-ACTE Global Aviation Summit in Amsterdam and addressed the subject of the EU mandate. Mr Al Baker called for unquestionable third and fourth freedom liberalisation and eventual fifth freedom liberalisation. The devil as always is in the detail; the non-EU airlines in the negotiations are sceptical about how the EU will define a "fair competition" clause, and whether it will be left abstract enough that "fair competition" could potentially be used against airlines in a way they have not envisaged. The Brexit referendum could result in the EU negotiating side losing the UK, whose liberal views have balanced those of the more protectionist France and Germany.
Air France-KLM's latest strategic project, 'Trust Together', follows its Transform 2015 and Perform 2020 programmes. In fact, it complements Perform 2020, rather than replacing it, at least until fuller details are announced in 2Q2017. After years of financial under-performance and market share erosion by Gulf airlines on long haul and LCCs on short/medium haul, CEO Jean Marc Janaillac aims to regain the offensive with this project.
But, in the absence of a substantial change of heart by the group's unions, there is little to suggest any "new" initiative will have a greater impact than its predecessors. The mere fact that Mr Janaiiac is forced to deny that the new long haul airline, codenamed "Boost", will be positioned as "low cost" is a clear enough indication of the task ahead. Indeed, to consider establishing anything else would be irrelevant in today's world.
Presumably so as not to rock the union boat plans are for only an ineffectual 10 aircraft by 2020. Just as with its short/medium haul LCC, Transavia, the scale and scope of the new long haul airline are likely to be subject to negotiation with Air France pilots. Transavia itself will now focus on routes from France and the Netherlands, implying an end to the troubled plans for Transavia Europe.
The ACTE-CAPA Global Summit attracted over 800 delegates and more than 40 c-level executives to Amsterdam on 27-28 Oct-2016. The CEOs of more than 20 airlines spoke during the summit, which included the annual CAPA Aviation Awards for Excellence gala dinner.
For a report on the award winners see: Icelandair, Iberia, Qatar, Wizz, AirAsia’s Fernandes, London City, Vancouver, ABB win CAPA awards
Liberalisation and disruptive technologies were among the main themes across two days of keynotes and panel discussions. Brexit, China, global alliances and the future of the low cost model were also examined in specifically themed panel discussions.