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PatrickZ80
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 4:56 pm

Jetty wrote:
AF/KL doesn’t fully own KL. Albeit it’s only a minority that is owned privately and by the Dutch government it does make a big difference: if AF/KL as majority shareholder forces decisions at KL that go against the interest of the minority shareholders they can be stopped by court intervention.


In fact, Air France-KLM only owns 49% of KLM. The other shares are in the hands of several foundations, the Dutch government and some private share holders.

In theory this means Air France-KLM can be outvoted when it comes to decisions regarding KLM, although that rarely happens. It even means KLM could technically break free from Air France-KLM. If left no other option, that's what eventually will happen.
 
Jetty
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 5:04 pm

PatrickZ80 wrote:
Jetty wrote:
AF/KL doesn’t fully own KL. Albeit it’s only a minority that is owned privately and by the Dutch government it does make a big difference: if AF/KL as majority shareholder forces decisions at KL that go against the interest of the minority shareholders they can be stopped by court intervention.


In fact, Air France-KLM only owns 49% of KLM. The other shares are in the hands of several foundations, the Dutch government and some private share holders.

In theory this means Air France-KLM can be outvoted when it comes to decisions regarding KLM, although that rarely happens. It even means KLM could technically break free from Air France-KLM. If left no other option, that's what eventually will happen.

I’ll confess it’s semantics, but the foundations you mention have the right to issue shares on their own behalf, thus those shares currently don’t excist making AF 94% owner at this moment. In practice you are right because those foundations could delude AF/KL’s share below 50% without them being able to do anything about it. Mr. Smith should tread carefully because consensus among everyone on the Dutch/KL seems to be headed in the direction that might be a viable option.
 
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Dieuwer
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 5:15 pm

If Mr. Smith doesn't like it, he can quit and go back to Canada.
 
WayexTDI
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 5:18 pm

Dieuwer wrote:
If Mr. Smith doesn't like it, he can quit and go back to Canada.

Or fire whoever doesn't follow his path... Usually works more that way.
 
Jetty
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 5:30 pm

WayexTDI wrote:
Dieuwer wrote:
If Mr. Smith doesn't like it, he can quit and go back to Canada.

Or fire whoever doesn't follow his path... Usually works more that way.

Mr. Smith on behalf of AF/KL can appoint a KL CEO proposed by the KL supervisory board. He doesn’t have the power to fire supervisors or choose a KL CEO himself. And as explained above the Dutch can take AF/KL’s majority ownership away. Thus it isn’t as simple as you make it out to be.
 
VSMUT
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 6:01 pm

Waterbomber2 wrote:
Imo KLM is a poorly run airline.
Poor product, poor service, low salaries. They can make a profit in this low fuel environment but nobody is happy. Not the customers, not the staff.
Their operations lack the slack.
There just isn't anything great with it.
AF is losing money due to poor management. KL may not be losing money but it has reached a dead end as an airline, there is no vision, no strategy, no willingness.
They might as well put a snowman as CEO, nobody would notice a difference.


It's probably a bit extreme to say that KLM is mismanaged, but they certainly aren't great. The cabins are dated, the 737s are nasty, the flight attendants are "cold". They could certainly learn a thing or two about hospitality from Air France. The only real plus KLM has over Air France is the hub.


Revelation wrote:
cv990Coronado wrote:
My perception from the outside looking in and from the comments in this thread, this merger looks like a marriage made in hell. In contrast to Lufthansa's takeover of LX and OS which doesn't seem to generate venomous comments. Is this a cultural thing of a matter of execution I wonder?

The cultural element is a prominent one.

You can read the comments in this thread and learn the Dutch are thrifty and industrious whereas the French are profligate and lazy.

Clearly AF-KLM is a marriage of convenience.


Is that any different from the Iberia-British Airways tie-up? IMHO, France and the Netherlands are closer culturally than the British and Spanish. There is no reason why Air France-KLM should work. It's a matter of mismanagement, not incompatible cultures.
 
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Taxi645
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 6:29 pm

Jetty wrote:
GCT64 wrote:
A current example of how this matters: KL has money in the bank while AF/KL has a debt. On group level the logical thing to do is clear the debt with the reserves of KL.


Or address what has caused the debt in the first place.... which is what happens in a well functioning company.


The problem is that part of the group is not competitive. Part of the part of that group don't want to get competitive, but rather stay uncompetitive and address the debt with moving money from the part of the group that is competitive.
Innovation is seeing opportunity before obstacle.
 
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Revelation
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 6:44 pm

Taxi645 wrote:
Jetty wrote:
GCT64 wrote:
A current example of how this matters: KL has money in the bank while AF/KL has a debt. On group level the logical thing to do is clear the debt with the reserves of KL.


Or address what has caused the debt in the first place.... which is what happens in a well functioning company.

The problem is that part of the group is not competitive. Part of the part of that group don't want to get competitive, but rather stay uncompetitive and address the debt with moving money from the part of the group that is competitive.

Extending the bad marriage analogy, the partners keep talking about my money vs your money and not about our money.

KLM chose its partner AF knowing its spending habits, but still went into the marriage. It's kinda late to complain now.
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jsfr
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 6:45 pm

Seriously - not a lot of very objective comments on this thread...

When two companies "merge", they don't do it to become BFF's, they do it to survive, to improve efficiencies, to benefit from each others areas of expertise... lots of reasons - all of which apply to the AF-KL "merger". However, there is always one company that is the major partner - and in this case it is AF who were not a takeover candidate at the time and who are simply, much, much bigger. KLM would probably be in a similar (if not worse) situation if they had "merged" with BA or LH...

AF will always be much bigger. France has 67 million inhabitants and is the global Number 1 tourist arrivals destination (compared to Netherlands who were 19th for tourist arrivals and have a quarter of the population). As much as I love Holland and the Dutch it will take a lot of global warming until Ijmuiden is as popular as the Cote d'azur and Dutch wines rival those from Bordeaux (many other areas in both leisure and business lead to similar conclusions). In fact AF should really be even bigger than it is. Irrespective of which is the "better" airine (that could be debated for a very long time, LX is much better than LH after all).

Now - how about we forget the past, and the cultural differences which won't (and shouldn't) change. Where can futher improvements be made? Obviously to back of house synergies! It is a no-brainer and obviously a large part of the original "merger" which was never realised due to the ongoing distractions of GFC, Oil price mistakes, Unions, etc.

I understand that Elders has been happy until now to keep his head down run a great unit and let AF run around dealing with all sorts of (often self-made) problems. But is now not the time to embrace the new leadership in Ben Smith (who seems to be doing quite good with the French)? This could be very positive for the Dutch - wanting to further combine activities does not necessarily mean combine them in France, who said they wouldn't do a lot of the synergies in Holland?

Whilst Elders has been very succesful in ensuring that the AF "Poison" does not infect his unit - he should now either become a team player for the greater good of AF-KL and allow further integration to improve both (even if that reduces each units independance and his personal power), or move on.

Years ago, when my large European company "Merged" with a (somewhat larger) US peer, my wise boss at the time gave me a great piece of parting wisdom as he left he said "F*** merger - they bought us, if you embrace them, work with them and facilitate change you have a lot of opportunities to grow and drive the integration, if you resist them because, sure, we do actually know better, then you'll just end up unemployed...."".

10 years on turned out to be very true for those of us who chose either option...
 
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PatrickZ80
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 7:03 pm

jsfr wrote:
AF will always be much bigger.


Not true. At the time of the merger, yes, Air France was much bigger than KLM. However after that KLM grew much harder than Air France and now they're almost as big. If this growth continues, soon KLM will be bigger than Air France who almost didn't grow. The difference is that Air France handles much more O/D traffic while KLM handles much more transfer traffic. If you're a transfer passenger on Air France-KLM you're much more likely to fly KLM than you are of flying Air France.

I agree with the reasons for the merger, but only up to a certain limit. Elbers (with a b, not a d) is doing great protecting his strong and profitable unit against the bigger, but weaker and not profitable Air France unit. He, and everybody at KLM with him, feel they shouldn't be profitable to cover up for the losses of Air France. Air France could be just as profitable on their own if they did what KLM has done, but they don't.

KLM certainly won't embrace the leadership of Ben Smith if that puts them in an unfavorable position. They choose for themselves, even up to the point where they have to break free from Air France-KLM. Smith is known for influencing outside his jurisdiction and obviously stepping on other peoples toes while doing so. That doesn't make him popular. Since he's influencing KLM too much, they got every reason to hate him. At the time of the merger it was agreed that KLM would keep it's own independence, Smith is lacking that. He wants too much and will end up getting nothing.
 
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FlyRow
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 7:20 pm

VSMUT wrote:
Waterbomber2 wrote:
Imo KLM is a poorly run airline.
Poor product, poor service, low salaries. They can make a profit in this low fuel environment but nobody is happy. Not the customers, not the staff.
Their operations lack the slack.
There just isn't anything great with it.
AF is losing money due to poor management. KL may not be losing money but it has reached a dead end as an airline, there is no vision, no strategy, no willingness.
They might as well put a snowman as CEO, nobody would notice a difference.


It's probably a bit extreme to say that KLM is mismanaged, but they certainly aren't great. The cabins are dated, the 737s are nasty, the flight attendants are "cold". They could certainly learn a thing or two about hospitality from Air France. The only real plus KLM has over Air France is the hub.



Dated cabins? What was the last time you flew KLM?
The A330,777 all have brand new cabins, the 787 is brand new. The E-series are just fine.
The 747's are on the way out and even they will get a IFE-refurb in 2019 even though they are fased out in 2021.

The one thing that every, but every tripreporter says is while they might not be very fancy or the newest and shining gimmics, the interior maintance of KLM planes is fantastic. No scratches, ripped fabric, broken pannels or broken buttons, it's all maintained topnotch.

The 737 might not be something special, but which 737/320 in europe is? Would you rather have a slimline 29inch seat like you see on LCC's or on BA?
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jsfr
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 7:22 pm

Apologies for the b/d thing - I often get that wrong...

Concerning size however, according to AFKL figures, AF had 51.4 mil pax in 2018, KL had 34.2 moil pax. That makes AF much bigger in my books (34%), sure not the only measure (ASK's is more in AF's favour, profit in KL's) - and KL is indeed growing a lot faster, but would still take years to catch up.

As you rightly state, KL has much more transit pax due to the great hub at AMS, however I suspect that a lot of that is actually AF pax routed on to the more profitable KL unit - a win/win situation from the merger that might not exist if KL had merged with (for example as it was mentioned) SAS. Worse had they merged with LH then KL probably would have only been feeder to FRA/MUC...

I don't think Smith is there to make friends, but to improve a stagnant financial/growth situation...
 
Jutlander
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 7:32 pm

VSMUT wrote:
It's probably a bit extreme to say that KLM is mismanaged, but they certainly aren't great. The cabins are dated, the 737s are nasty, the flight attendants are "cold". They could certainly learn a thing or two about hospitality from Air France. The only real plus KLM has over Air France is the hub.


I have to disagree. I have flown KL often and always liked them, a great airline. Aircraft are top notch and staff is very friendly.

Talk about hospitality and AF, they can certainly learn a thing or two from KL. All KL staff speaks perfect English, almost better than a native Englishman. And yes, they are Dutch. The French F/A's on AF only speak crappy English and just ramble to you in French which I don't understand. Very rude. I pick KL over AF any day, one of the best airlines in Europe.
 
jagraham
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 7:38 pm

seahawk wrote:
cv990Coronado wrote:
My perception from the outside looking in and from the comments in this thread, this merger looks like a marriage made in hell. In contrast to Lufthansa's takeover of LX and OS which doesn't seem to generate venomous comments. Is this a cultural thing of a matter of execution I wonder?


LH took over LX and OS, while KLM and AF merged, that alone is a difference. But in the end control of the combined group of AF/KLM needs to be centralized.

This includes common fleet and route planing, onboard products, service standards and so on.


Centralized under who?
 
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 8:01 pm

Revelation wrote:
Taxi645 wrote:
Jetty wrote:


Or address what has caused the debt in the first place.... which is what happens in a well functioning company.

The problem is that part of the group is not competitive. Part of the part of that group don't want to get competitive, but rather stay uncompetitive and address the debt with moving money from the part of the group that is competitive.

Extending the bad marriage analogy, the partners keep talking about my money vs your money and not about our money.

KLM chose its partner AF knowing its spending habits, but still went into the marriage. It's kinda late to complain now.

KL chose AF exactly because they agreed to a structure that allowed them a reasonable amount of independence. If that wasn't an issue the takeover by BA would have been preferred and gone through. Thus I'd say it's kinda late for AF to complain. Also it isn't just talking about my money vs your money: for the KL shareholders besides AF/KL it is my money vs your money, as they have no financial interest in the results of the group as a whole.

jsfr wrote:
When two companies "merge", they don't do it to become BFF's, they do it to survive, to improve efficiencies, to benefit from each others areas of expertise... lots of reasons - all of which apply to the AF-KL "merger". However, there is always one company that is the major partner - and in this case it is AF who were not a takeover candidate at the time and who are simply, much, much bigger. KLM would probably be in a similar (if not worse) situation if they had "merged" with BA or LH...

AF will always be much bigger. France has 67 million inhabitants and is the global Number 1 tourist arrivals destination (compared to Netherlands who were 19th for tourist arrivals and have a quarter of the population). As much as I love Holland and the Dutch it will take a lot of global warming until Ijmuiden is as popular as the Cote d'azur and Dutch wines rival those from Bordeaux (many other areas in both leisure and business lead to similar conclusions). In fact AF should really be even bigger than it is. Irrespective of which is the "better" airine (that could be debated for a very long time, LX is much better than LH after all).

AF was much bigger. That isn't the case anymore. Over 2018 former KLM (KLM +Transavia) carried 50 million passengers while Air France and HOP carried 51 million passengers.

Now - how about we forget the past, and the cultural differences which won't (and shouldn't) change. Where can futher improvements be made? Obviously to back of house synergies! It is a no-brainer and obviously a large part of the original "merger" which was never realised due to the ongoing distractions of GFC, Oil price mistakes, Unions, etc.

I understand that Elders has been happy until now to keep his head down run a great unit and let AF run around dealing with all sorts of (often self-made) problems. But is now not the time to embrace the new leadership in Ben Smith (who seems to be doing quite good with the French)? This could be very positive for the Dutch - wanting to further combine activities does not necessarily mean combine them in France, who said they wouldn't do a lot of the synergies in Holland?

How can we forget about the past when the first thing Mr. Smith did is basically caving in to AF's union demands by doing away with the lower wages at Joon and giving almost the demanded wage increase? That way it isn't difficult to be doing good with the French. But it doesn't solve AF's fundamental problems of too much union influence and too little profitability. Likewise a problem of further integration is that AF unions would never accept dismissals, thus they'd all have to come from KL. That is reasonable nor acceptable especially with KL being the much better performing half for a long time.
 
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Dieuwer
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 8:18 pm

Taxi645 wrote:
Jetty wrote:
GCT64 wrote:
A current example of how this matters: KL has money in the bank while AF/KL has a debt. On group level the logical thing to do is clear the debt with the reserves of KL.


Or address what has caused the debt in the first place.... which is what happens in a well functioning company.


The problem is that part of the group is not competitive. Part of the part of that group don't want to get competitive, but rather stay uncompetitive and address the debt with moving money from the part of the group that is competitive.


It's like being in a marriage where on of the partners works hard and brings the money home while the other partners sits in front of the TV all day long, wasting household money on booze and drugs.

Revelation wrote:
Taxi645 wrote:
Jetty wrote:


Or address what has caused the debt in the first place.... which is what happens in a well functioning company.

The problem is that part of the group is not competitive. Part of the part of that group don't want to get competitive, but rather stay uncompetitive and address the debt with moving money from the part of the group that is competitive.

Extending the bad marriage analogy, the partners keep talking about my money vs your money and not about our money.

KLM chose its partner AF knowing its spending habits, but still went into the marriage. It's kinda late to complain now.


So when a woman is mistreated by her husband, being beaten and being raped, you just say: "Sorry, you are in a marriage now. Kinda late to complain".

:thumbsdown:
 
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PatrickZ80
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 9:16 pm

Dieuwer wrote:
So when a woman is mistreated by her husband, being beaten and being raped, you just say: "Sorry, you are in a marriage now. Kinda late to complain".


I agree. With a marriage as bad as Air France-KLM, the best option is to break up. That causes short-term problems for both parties, but in the long term it's better than staying together and letting the problems continue.

It surprises me that some people want to make these two airlines that obviously aren't compatible more dependent on each other. That doesn't work, further integration benefits nobody. I say it's time to pull the plug on this marriage, break up and let each airline go it's own way.
 
FrancisBegbie
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 9:16 pm

Both partners needed the merger back in the day. KLM was too small anyway and a stand-alone AF would also have been squashed by the OneWorld / Star Alliance anvil they are in located in between.

As for the need to further integrate. That is necessary, but if (if!) that means consolidating into Paris just because they throw a bigger fight resisting to change that would be wrong and just too easy by Smith.

Apprehensive as Elbers may be, he also should be careful not to come across as resisting to any change (the French rubbing off on him ;)):
- I don’t understand the resistance against Smith in the board of Supervisors at KLM. That position is not powerful enough to call all the shots. And he is the CEO of the group in the end of the day; not that strange that he wants to have some direct influence.
- Smith has made public that he does not like too many aircraft types. So if Elbers can buy some good grace by changing fleet strategy here and there, go for it. The blue pilots seem hell-bent on flying Seattle stuff, but if - let’s say - the financial business case for the GROUP would dictate a switch from 737 to A32x, KLM should not just look at their own figures/preference. Piss off the pilots, please the boss (and the ground handlers probably too..). Or transfer the A350s to Paris and become a 787/777-WB-only airline.

- as for Paris, the stories of a bloated HQ are persistent. Fleet plans seem rational in my amateur eyes (since they’ve decided to kill Joon).
 
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PatrickZ80
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 9:25 pm

Revelation wrote:
Extending the bad marriage analogy, the partners keep talking about my money vs your money and not about our money.

KLM chose its partner AF knowing its spending habits, but still went into the marriage. It's kinda late to complain now.


That's because there is no "our money". Both airlines got their own finances, their own shareholders to report to. They may be in a group, but they have opposite interests when it comes to money. Air France agreed to that when they merged with KLM, too late to complain now. And that's exactly what Smith is doing, he's trying to get control over something that was agreed on back then that is under the control of KLM, not under the control of Air France-KLM. It's not his to control.
 
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Revelation
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 9:27 pm

Dieuwer wrote:
.
Revelation wrote:
Extending the bad marriage analogy, the partners keep talking about my money vs your money and not about our money.

KLM chose its partner AF knowing its spending habits, but still went into the marriage. It's kinda late to complain now.


So when a woman is mistreated by her husband, being beaten and being raped, you just say: "Sorry, you are in a marriage now. Kinda late to complain".

:thumbsdown:

We're stretching the analogy too far when we use such words, IMHO.

My point was that the partner's flaws were well known before the marriage.

But yeah, I guess they do have the right to complain, and the right to get a divorce, which might be the best for all involved.

Seems the marriage has been without love and the weaker partner is now close to an equal.

Maybe they will be glad they kept their old apartments?
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Wake now, discover that you are the song that the morning brings
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 9:32 pm

FrancisBegbie wrote:
Both partners needed the merger back in the day. KLM was too small anyway and a stand-alone AF would also have been squashed by the OneWorld / Star Alliance anvil they are in located in between.


Yes, it was needed back then. I agree. However that doesn't mean it's still needed now. And that's what you should be looking at. Do Air France and KLM still need each other? Maybe Air France still needs KLM, but KLM definitely doesn't need Air France anymore.
 
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Aesma
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 10:28 pm

I often see that KLM with backers could buy itself out of AFKL, don't know if that's true, but what if AFKL convinces one of KL's shareholders to sell to it instead to go over 50% ?
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Taxi645
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Re: Air France-KLM Wants to Change KL CEO

Tue Feb 12, 2019 11:04 pm

Don't forgot the merger did not only have a bussiness dimension but also a politcal one. It was in the day's that policians thought that differences between North and South of Europe could be easily overcome. I think the merger was decided in that optimistic political climate. We now know that hasn't been all plain sailing. There's quite a few parallels between the EU project and the AF-KLM merger.

I think AF-KLM could become more competive in two ways:

1 AF get's more competitive
2 Further integration of both airlines.

For the second to happen, as far as KLM is concerned, the former must happen first and even then it will be difficult. Seems someone is going about it in the wrong order.
Innovation is seeing opportunity before obstacle.
 
Jetty
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 4:39 am

Aesma wrote:
I often see that KLM with backers could buy itself out of AFKL, don't know if that's true, but what if AFKL convinces one of KL's shareholders to sell to it instead to go over 50% ?

That's virtually impossible because they'd need to convince the Dutch government and foundations that have a statutory task to guarantee the viable future of KLM. With AF/KL currently owning 90%+ of voting rights without their intervention it's hard to see how they could justify intervening to give AFKL an even larger majority because that wouldn't change anything. Voting contrary to AF/KL with a newly created majority of the votes however would make a fundamental difference.
 
325i
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 7:02 am

Greetings Folks and Waterbomber2,my friend you must have had a bad day to make a comment that KL's service etc is poor. late last year had 2 wonderful flights with them, from check in to deplaning the entire staff that were involved performed with an exemplary attitude.The aircraft were clean and the food was A whole lot better than BA.
Cheers 325i.
 
VSMUT
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 10:48 am

FlyRow wrote:
Would you rather have a slimline 29inch seat like you see on LCC's or on BA?



Aiming to be better than BA is pretty unspectacular. That only makes you second-worst.
 
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FlyRow
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 11:00 am

VSMUT wrote:
FlyRow wrote:
Would you rather have a slimline 29inch seat like you see on LCC's or on BA?



Aiming to be better than BA is pretty unspectacular. That only makes you second-worst.


That's not the point.
The point was that while the cabin of KLM doesn't look super-modern doesn't make it bad.
BA's refurbd shorthauls look sleek, leather, modern... but comfort and seat pitch is terrible.

I think KLM's shorthaul is perfectly on par with other EU legacy's.
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Thibault973
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 11:36 am

PatrickZ80 wrote:
jsfr wrote:
AF will always be much bigger.


Not true. At the time of the merger, yes, Air France was much bigger than KLM. However after that KLM grew much harder than Air France and now they're almost as big.


They are not "almost as big" by any means. Air France carries 73% more passengers as KLM and as you pointed out, Air France traffic is more O&D which means AF attracts way more custumers. Air France also generates 60% more revenue.
 
TYCOON
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 12:15 pm

jsfr wrote:
Seriously - not a lot of very objective comments on this thread...

When two companies "merge", they don't do it to become BFF's, they do it to survive, to improve efficiencies, to benefit from each others areas of expertise... lots of reasons - all of which apply to the AF-KL "merger". However, there is always one company that is the major partner - and in this case it is AF who were not a takeover candidate at the time and who are simply, much, much bigger. KLM would probably be in a similar (if not worse) situation if they had "merged" with BA or LH...

AF will always be much bigger. France has 67 million inhabitants and is the global Number 1 tourist arrivals destination (compared to Netherlands who were 19th for tourist arrivals and have a quarter of the population). As much as I love Holland and the Dutch it will take a lot of global warming until Ijmuiden is as popular as the Cote d'azur and Dutch wines rival those from Bordeaux (many other areas in both leisure and business lead to similar conclusions). In fact AF should really be even bigger than it is. Irrespective of which is the "better" airine (that could be debated for a very long time, LX is much better than LH after all).

Now - how about we forget the past, and the cultural differences which won't (and shouldn't) change. Where can futher improvements be made? Obviously to back of house synergies! It is a no-brainer and obviously a large part of the original "merger" which was never realised due to the ongoing distractions of GFC, Oil price mistakes, Unions, etc.

I understand that Elders has been happy until now to keep his head down run a great unit and let AF run around dealing with all sorts of (often self-made) problems. But is now not the time to embrace the new leadership in Ben Smith (who seems to be doing quite good with the French)? This could be very positive for the Dutch - wanting to further combine activities does not necessarily mean combine them in France, who said they wouldn't do a lot of the synergies in Holland?

Whilst Elders has been very succesful in ensuring that the AF "Poison" does not infect his unit - he should now either become a team player for the greater good of AF-KL and allow further integration to improve both (even if that reduces each units independance and his personal power), or move on.

Years ago, when my large European company "Merged" with a (somewhat larger) US peer, my wise boss at the time gave me a great piece of parting wisdom as he left he said "F*** merger - they bought us, if you embrace them, work with them and facilitate change you have a lot of opportunities to grow and drive the integration, if you resist them because, sure, we do actually know better, then you'll just end up unemployed...."".

10 years on turned out to be very true for those of us who chose either option...



Most intelligent post on this thread. Personally I love flying on both airlines, with a slight edge to AirFrance because I find the whole experience just a tad bit classier (food and in-flight service provides a slight edge)... but give me AFKL over IAG or LH Group any day of the week. I do not understand the comments on interior condition of KL aircraft as I always find them immaculate and they surely beat BA or LH or LX's "plywood" seats with non-existent legroom.
I just find the Dutch position here so, well, disappointingly Dutch... KLM grew with the help of AF, and not in spite of... Keep that in mind. I personally find the service fairly seemless in AMS and CDG, transfering from one to the other, or checking in. In MAD for instance, you can't check in for a BA flight to LHR at the IB counters... which is frustrating, especially as they are not near each other in T4 (at least business counters are not). The Dutch are just going to have to get used to Mr. Smith I am afraid, as the French are ... It is ironic that they are behaving very much as many people state the French do... provinical, set in their ways, not open to progress, insular... etc...
 
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EVAAIRBR076
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 1:11 pm

Apparently Mr. Smith is in the Netherlands today for a "secret" meeting with the (literaly translated) pilots union association for dutch pilots.

https://www.telegraaf.nl/financieel/314 ... -nederland
 
bennett123
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 1:45 pm

The priority needs to be group profitability.

Giving way to the group making the biggest stink is a recipe for trouble.
 
Jetty
Topic Author
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 3:10 pm

Thibault973 wrote:
PatrickZ80 wrote:
jsfr wrote:
AF will always be much bigger.


Not true. At the time of the merger, yes, Air France was much bigger than KLM. However after that KLM grew much harder than Air France and now they're almost as big.


They are not "almost as big" by any means. Air France carries 73% more passengers as KLM and as you pointed out, Air France traffic is more O&D which means AF attracts way more custumers. Air France also generates 60% more revenue.

Your numbers are plain wrong. KL+HV carry the same amount of people as AF+A5. What's your source?
 
jsfr
Posts: 74
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 4:22 pm

But we're talking AF vs KL - not AF plus plus plus vs KL plus plus plus...

People keep conveniantly considering Transavia as a pure KLM... It hardly existed at the time of the merger - it was really a small charter operator with only oner or two regular lines, it wasn't until 2005 that it started to grow and later that it grew in France Now it is pretty much 50/50 Transavia France vs. Transavia Holland (or HV/TO if you prefer) with the majority of recent growth in... France.

Think about it...

The fact of Transavia being based in Holland and perceived as Dutch is actually proof that the group AF/KL is already happily consolidating things into Holland rather than the initial thesis of this thread that which was they are hampering the growth and development of the Dutch units to cover for the French! Smith's first big action of trashing Joon shows that he is not interested in maintaining dumb French ideas when he has perfectly good Dutch ones to leverage...

Now let's get over the KL vs AF ego issues and see how AF/KL can grow together in size and efficiencies if they accept each others cultural differences (as annoying as they may be) and BOTH become team players.
 
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Taxi645
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 5:14 pm

jsfr wrote:
The fact of Transavia being based in Holland and perceived as Dutch is actually proof that the group AF/KL is already happily consolidating things into Holland rather than the initial thesis of this thread that which was they are hampering the growth and development of the Dutch units to cover for the French! S


I don't think that is actually what many are saying. Yes, KLM is making more profit at the moment and covering losses at the AF side. The point is that there seems to be a movement to remove certain safeguards that keep this from getting worse. So the critique is not so much about the current situation being bad (as you seem to say), but that it might actually get worse.
Innovation is seeing opportunity before obstacle.
 
panamair
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 6:24 pm

PatrickZ80 wrote:
but KLM definitely doesn't need Air France anymore.


Uh yes, they do. KL benefits enormously (as does AF) from being part of much larger group (AF-KL). A good portion of KL's successes since the merger has come from being part of a large airline group with significantly more network scope and breadth to offer customers and corporate accounts; the merger opened up markets and traffic flows to both AF and KL that would not have been available had each been a standalone carrier. Just because KL has been profitable as part of AF-KL doesn't mean that it will continue to be successful if it left the group simply because a lot of its success can be attributed to it being a part of AF-KL in the first place.
 
OlympicATH
Posts: 179
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 6:32 pm

PatrickZ80 wrote:
In fact, Air France-KLM only owns 49% of KLM. The other shares are in the hands of several foundations, the Dutch government and some private share holders.


Incorrect. Air France-KLM owns 94% of KLM. They only have 49% of dividend rights given the structure that was set up during the merger.
The two Dutch Foundations have 44.8% and the Dutch State 5.6%.
Each of the two foundations has three Directors: one named by Air France-KLM, one named by KLM and a third one named by the other two. ANy decision needs to be unanimous.
Unless I'm missing something it is not that straightforward for KLM to break away.
 
Thibault973
Posts: 120
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 6:49 pm

Jetty wrote:
Your numbers are plain wrong. KL+HV carry the same amount of people as AF+A5. What's your source?


AFKL 2017 results. I guess you're including TO's numbers in your KL+HV. But TO is not a KL subsidiary ! HV holds a minority 40% interest in TO while the remaining 60% are owned by AF S.A. At some point it was annoucend that TO's shareholding would change to 97.5% AF and 2.5% HV, don't know if it went thru tho.

I went to check AFKL last results and it says that 31,7% of their revenue come from France, 15% from Benelux (Belgium, Nertherlands and Luxemburg), 19.4% from the rest of Europe (19,4%), 12.8% from North America, 8.4% from Asia, 4,5% from and 8,2% from the rest of the world, so this should put some perspective.
 
Waterbomber2
Posts: 43
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 7:28 pm

325i wrote:
Greetings Folks and Waterbomber2,my friend you must have had a bad day to make a comment that KL's service etc is poor. late last year had 2 wonderful flights with them, from check in to deplaning the entire staff that were involved performed with an exemplary attitude.The aircraft were clean and the food was A whole lot better than BA.
Cheers 325i.


Bad? I would say horrific.
Their catering is a joke, I was served crackers and a microwaved meal that tasted awful on a 12 hour flight. I was starving and had to get a meal as soon as I arrived.

The cabin was freezing for 12 hours. So much so that my Dutch neighbors decided to steal my blanket while i was asleep.

The cabin was dirty to hell. It hadn't been cleaned and I got off with dust mite bites.

The call button is systematically ignored. You can press as much as you want, they won't come, ever.

The B77W seats were awful.

AMS is not a good hub at all.
25 minutes of walking to connect to non-Shengen. That's over 2 kilometers and very few places to sit and rest.
But plenty of shops in-between.

Forget it, KLM is a poorly run airline hubbing at an airport that is more of a shopping mall than an airport.

I could also see some of their GSE and it looks old like hell, tractors falling apart.

KLM has a huge amount of IRROPS, about 5 years ago there was a Dutch forum with a thread about all the daily breakdowns and it was huge.

Whilst working in aviation, KLM staff were flocking to our airline citing poor pay and management pressure.

For me, when cabin crew don't answer the call button, they are on strike, even if supposedly they are never on strike.

A lot of travellers share my views:

https://www.airlinequality.com/airline- ... es/page/3/

No comparison to Asian airlines or even AF.
AF is a poorly run airline but at least staff seem happy to come to work.
 
Jetty
Topic Author
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 7:31 pm

Thibault973 wrote:
Jetty wrote:
Your numbers are plain wrong. KL+HV carry the same amount of people as AF+A5. What's your source?


AFKL 2017 results. I guess you're including TO's numbers in your KL+HV. But TO is not a KL subsidiary ! HV holds a minority 40% interest in TO while the remaining 60% are owned by AF S.A. At some point it was annoucend that TO's shareholding would change to 97.5% AF and 2.5% HV, don't know if it went thru tho.

I went to check AFKL last results and it says that 31,7% of their revenue come from France, 15% from Benelux (Belgium, Nertherlands and Luxemburg), 19.4% from the rest of Europe (19,4%), 12.8% from North America, 8.4% from Asia, 4,5% from and 8,2% from the rest of the world, so this should put some perspective.

Even if you completely exclude HV from KL and do include HOP! with AF then AF still isn't close to 73% bigger as you claimed. See: https://www.airfranceklm.com/fr/actuali ... ransportes
 
airbuster
Posts: 348
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 8:05 pm

Waterbomber2 wrote:
325i wrote:
Greetings Folks and Waterbomber2,my friend you must have had a bad day to make a comment that KL's service etc is poor. late last year had 2 wonderful flights with them, from check in to deplaning the entire staff that were involved performed with an exemplary attitude.The aircraft were clean and the food was A whole lot better than BA.
Cheers 325i.


Bad? I would say horrific.
Their catering is a joke, I was served crackers and a microwaved meal that tasted awful on a 12 hour flight. I was starving and had to get a meal as soon as I arrived.

The cabin was freezing for 12 hours. So much so that my Dutch neighbors decided to steal my blanket while i was asleep.

The cabin was dirty to hell. It hadn't been cleaned and I got off with dust mite bites.

The call button is systematically ignored. You can press as much as you want, they won't come, ever.

The B77W seats were awful.

AMS is not a good hub at all.
25 minutes of walking to connect to non-Shengen. That's over 2 kilometers and very few places to sit and rest.
But plenty of shops in-between.

Forget it, KLM is a poorly run airline hubbing at an airport that is more of a shopping mall than an airport.

I could also see some of their GSE and it looks old like hell, tractors falling apart.

KLM has a huge amount of IRROPS, about 5 years ago there was a Dutch forum with a thread about all the daily breakdowns and it was huge.

Whilst working in aviation, KLM staff were flocking to our airline citing poor pay and management pressure.

For me, when cabin crew don't answer the call button, they are on strike, even if supposedly they are never on strike.

A lot of travellers share my views:

https://www.airlinequality.com/airline- ... es/page/3/

No comparison to Asian airlines or even AF.
AF is a poorly run airline but at least staff seem happy to come to work.



All I can say is.......you for real bro? Maybe try flying KLM again and see what you missed.
FLY FOKKER JET LINE!
 
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PatrickZ80
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 8:16 pm

Waterbomber2 wrote:
Bad? I would say horrific.
Their catering is a joke, I was served crackers and a microwaved meal that tasted awful on a 12 hour flight. I was starving and had to get a meal as soon as I arrived.

The cabin was freezing for 12 hours. So much so that my Dutch neighbors decided to steal my blanket while i was asleep.

The cabin was dirty to hell. It hadn't been cleaned and I got off with dust mite bites.

The call button is systematically ignored. You can press as much as you want, they won't come, ever.

The B77W seats were awful.

AMS is not a good hub at all.
25 minutes of walking to connect to non-Shengen. That's over 2 kilometers and very few places to sit and rest.
But plenty of shops in-between.

Forget it, KLM is a poorly run airline hubbing at an airport that is more of a shopping mall than an airport.

I could also see some of their GSE and it looks old like hell, tractors falling apart.

KLM has a huge amount of IRROPS, about 5 years ago there was a Dutch forum with a thread about all the daily breakdowns and it was huge.

Whilst working in aviation, KLM staff were flocking to our airline citing poor pay and management pressure.

For me, when cabin crew don't answer the call button, they are on strike, even if supposedly they are never on strike.

A lot of travellers share my views:

https://www.airlinequality.com/airline- ... es/page/3/

No comparison to Asian airlines or even AF.
AF is a poorly run airline but at least staff seem happy to come to work.


Allright, that's enough. You're just writing this to blackguard KLM. A lot of what you wrote here is proven untrue, just plain lies. The rest is just as unlikely.

Like for example your 25 minute walk from Schengen to non-Schengen on Amsterdam. Sorry to break it to you, but that's just not true. Even from one side of the airport to the other you can walk that in less. 2 kilometers? Maybe if you walk in circles. And about places to sit, every time I'm in Amsterdam I see plenty of places to sit. How come you're complaining about it? Maybe because all of what you wrote is not true?

As for that site you're referring to, I've checked a couple of those reviews. It occurs to me that the last few reviews have exactly the tone you're setting here, which indicates that you wrote those. However if you skip those fake reviews written by you and check some older actual reviews you'll see that by far most of them are very positive and saying the opposite of what you're saying.

Why you're blackguarding KLM is beyond me, but you're not doing a very good job at it. You're too conspicuous.

By the way, on that very same site you've linked to I've also looked up Air France. Surprise: KLM scores 7/10 while Air France only scores 5/10. This indicates that KLM is the better airline. For comparison, Ryanair also scores 5/10 just like Air France. KLM is in line with Lufthansa which also gets 7/10.
 
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PatrickZ80
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 10:03 pm

A bit off-topic, but this site triggered me to make a list of airlines in Europe and how good they scored. It turns out Aegean is the best airline in Europe and the only one that scores 8/10. The worst is Cyprus Airways which manages to score 1/10. The results:

8/10
Aegean

7/10
Edelweiss, Jet2, KLM, Lufthansa, Swiss, Tarom

6/10
Adria, Aer Lingus, Aeroflot, Air Serbia, Austrian Airlines, Belavia, Bulgaria Air, EasyJet, Finnair, Icelandair, Luxair, Norwegian, Thomas Cook Airlines Scandinavia, TUI Airways UK

5/10
Air France, Air Italy, Air Malta, AirBaltic Alitalia, Blue Air, British Airways, Brussels Airlines, CSA Czech Airlines, Flybe, Iberia, LOT Polish Airlines, Ryanair, SAS Scandinavian, TAP Portugal, Transavia, Thomas Cook Airlines UK, TUIfly Nordic, Turkish Airlines, Virgin Atlantic

4/10
Air Europa, Condor, Laudamotion, Pegasus Airlines, TUIfly Germany, Ukraine International, Wizzair

3/10
Eurowings, Level, Volotea, Vueling, WOW Air

2/10
Pobeda

1/10
Cyprus Airways
 
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FlyRow
Posts: 586
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Re: Air France-KLM Wants to Change KL CEO

Wed Feb 13, 2019 10:37 pm

PatrickZ80 wrote:
A bit off-topic, but this site triggered me to make a list of airlines in Europe and how good they scored. It turns out Aegean is the best airline in Europe and the only one that scores 8/10. The worst is Cyprus Airways which manages to score 1/10. The results:

8/10
Aegean

7/10
Edelweiss, Jet2, KLM, Lufthansa, Swiss, Tarom

6/10
Adria, Aer Lingus, Aeroflot, Air Serbia, Austrian Airlines, Belavia, Bulgaria Air, EasyJet, Finnair, Icelandair, Luxair, Norwegian, Thomas Cook Airlines Scandinavia, TUI Airways UK

5/10
Air France, Air Italy, Air Malta, AirBaltic Alitalia, Blue Air, British Airways, Brussels Airlines, CSA Czech Airlines, Flybe, Iberia, LOT Polish Airlines, Ryanair, SAS Scandinavian, TAP Portugal, Transavia, Thomas Cook Airlines UK, TUIfly Nordic, Turkish Airlines, Virgin Atlantic

4/10
Air Europa, Condor, Laudamotion, Pegasus Airlines, TUIfly Germany, Ukraine International, Wizzair

3/10
Eurowings, Level, Volotea, Vueling, WOW Air

2/10
Pobeda

1/10
Cyprus Airways


Lovely defending KLM, but this is based on what?
F70-F100-RJ85-RJ70-E190-319-320-321-733-734-735-737-738-752-753-763-764-772-744-380
 
325i
Posts: 94
Joined: Thu Mar 30, 2017 2:01 am

Re: Air France-KLM Wants to Change KL CEO

Thu Feb 14, 2019 12:04 am

Thank you Waterbomber2 for your response.It would appear to me that you had a one off experience or that air travel does not agree with you.
Take a deep breath and have another go in flying with one of Europes better airlines. Alternatively upgrade to J class . Cheers ,325i.
 
Thibault973
Posts: 120
Joined: Fri Jul 17, 2015 9:11 am

Re: Air France-KLM Wants to Change KL CEO

Thu Feb 14, 2019 12:13 am

PatrickZ80 wrote:
A bit off-topic, but this site triggered me to make a list of airlines in Europe and how good they scored. It turns out Aegean is the best airline in Europe and the only one that scores 8/10. The worst is Cyprus Airways which manages to score 1/10. The results:

8/10
Aegean

7/10
Edelweiss, Jet2, KLM, Lufthansa, Swiss, Tarom

6/10
Adria, Aer Lingus, Aeroflot, Air Serbia, Austrian Airlines, Belavia, Bulgaria Air, EasyJet, Finnair, Icelandair, Luxair, Norwegian, Thomas Cook Airlines Scandinavia, TUI Airways UK

5/10
Air France, Air Italy, Air Malta, AirBaltic Alitalia, Blue Air, British Airways, Brussels Airlines, CSA Czech Airlines, Flybe, Iberia, LOT Polish Airlines, Ryanair, SAS Scandinavian, TAP Portugal, Transavia, Thomas Cook Airlines UK, TUIfly Nordic, Turkish Airlines, Virgin Atlantic

4/10
Air Europa, Condor, Laudamotion, Pegasus Airlines, TUIfly Germany, Ukraine International, Wizzair

3/10
Eurowings, Level, Volotea, Vueling, WOW Air

2/10
Pobeda

1/10
Cyprus Airways


This is BS at its finest
 
Flanker7
Posts: 227
Joined: Thu Aug 07, 2008 4:38 pm

Re: Air France-KLM Wants to Change KL CEO

Thu Feb 14, 2019 2:50 pm

25.000 klm staff signed the online petition in support of Elbers. It was presented to the board at klm HQ where a large group of supporters shouted Elbers name. It shows that staff supports Elbers and sends a strong signal to Smith. Showing this kind of support to you're CEO is even for Dutch standards quite unprecedented.
Flying blue only if possible
 
Jetty
Topic Author
Posts: 637
Joined: Wed Nov 11, 2015 12:27 pm

Re: Air France-KLM Wants to Change KL CEO

Thu Feb 14, 2019 2:58 pm

Flanker7 wrote:
25.000 klm staff signed the online petition in support of Elbers. It was presented to the board at klm HQ where a large group of supporters shouted Elbers name. It shows that staff supports Elbers and sends a strong signal to Smith. Showing this kind of support to you're CEO is even for Dutch standards quite unprecedented.

The head of the employee council repeated his threat of industrial action, adding that working with AF for 15 years learned them how to get your way by doing so :box:
 
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Dieuwer
Posts: 794
Joined: Tue Dec 26, 2017 6:27 pm

Re: Air France-KLM Wants to Change KL CEO

Thu Feb 14, 2019 6:55 pm

Our Pieter [ed. Elbers ] is not a one-trick pony He has been working for KLM since 1992. The French CEOs are the ones that come and go, I have seen three of them [ed. through the revolving door] within six years. We (KLM) do the clean up [ed. for AF] and pay for their disastrous and failed policies.


So says they leader of the KL Works Council.

Mr. Smith, who took office in September, has only played Santa at Air France, handing out wage increases of 5% to 8%. It is time to really fix AF, [ed. not play around with other people's money].


https://www.telegraaf.nl/financieel/315 ... um=organic
 
HiddenPassion
Posts: 3
Joined: Wed Nov 15, 2017 11:59 am

Re: Air France-KLM Wants to Change KL CEO

Fri Feb 15, 2019 10:05 am

Flanker7 wrote:
25.000 klm staff signed the online petition in support of Elbers. It was presented to the board at klm HQ where a large group of supporters shouted Elbers name. It shows that staff supports Elbers and sends a strong signal to Smith. Showing this kind of support to you're CEO is even for Dutch standards quite unprecedented.


The petition was accessible by all, not only for KLM's staff. the petition was open to anyone to sign and many of the signatures were from non-KLM employees.
 
HiddenPassion
Posts: 3
Joined: Wed Nov 15, 2017 11:59 am

Re: Air France-KLM Wants to Change KL CEO

Fri Feb 15, 2019 10:25 am

Something that everyone messed up is the French labor were striking so frequently because non-skilled CEO and head direction staff constantly lying and not respecting them.
Af cut staff and the others did productivity efforts, and even if AF were profitable but they never saw the counterpart, each time CEOs were claiming: isn't enough compared to other or AF might go for bankruptcy and can't afford some pay increases.
It was mandatory for Ben to solve this issue first prior to change things and reduce cost.
The main problem for AF in France is the tax bills, consistently growing up years after years. While AMS's fees going down, CDG grew up.
Also, there is a huge workforce at AF being unproductive and un-useful coming from the French government's offices, and many doubles ( if not triple ) for some specific task. Ben starts the process to lay off some of these people to reduce cost.
Change is coming for AF, the sky has never been more clear than now. Ben is a skilled CEO and has a vision for AF, non-skilled people being laid off and replace with skilled-ones, this year the French government promises kind of help for French carriers, union's head changed and now they're supporting Ben and for all apart HOP's staff who wants to be fully integrated into AF like JOON, strikes are not coming for now.
Let's wait & see.

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