jsfr
Posts: 92
Joined: Tue Oct 20, 2009 2:36 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 8:44 am

jsfr wrote:
the current stock price also shows this is generally being seen as a good thing for the future


Oh dear, after having picked up 25% over the past week, the stock price has tanked in the last half hour since markets opened.

So this is not seen as a good move by the professionals after all...
 
jpiddink
Posts: 13
Joined: Sat Feb 07, 2009 7:23 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 8:55 am

MrBren wrote:
Visibly the Dutch move scares the markets because the AF KLM share drops, almost 10% at the opening.

Not quite so, stocks have risen 25% since the Dutch govt started acquiring their share last week. The current drop is only reflecting that one agressive buyer has (for now) left the stock market, but still shares changes hands for a price 12% higher than 10 days ago.
 
marcelh
Posts: 572
Joined: Wed Jun 19, 2013 12:43 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 9:10 am

jsfr wrote:
keesje wrote:
I think deep down every body knows what the french really wants.


A succesful AF/KL?

In any case, we know what the Dutch on airliners.net want...

They have to get rid of their orange glasses. KLM is too small to survive as an independent company. It’s time to get mature for both the French and the Dutch and work together and let those patriottic nonsense behind.
 
jsfr
Posts: 92
Joined: Tue Oct 20, 2009 2:36 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 9:16 am

KLexit

Quite a few similarities... :)
 
User avatar
cv990Coronado
Posts: 339
Joined: Thu Nov 08, 2007 4:38 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 9:16 am

It doesn't give a great impression of harmony within the EU, does it?
I would think KL would be much better off split from AF/KL with Delta owning 25% and KLM the balance.
SSC-707B727 737-741234SP757/762/3/772/WA300/10/319/2/1-342/3/6-880-DAM-VC10 TRD 111 Ju52-DC8/9/10/11-YS11-748-VCV DH4B L
 
Flanker7
Posts: 281
Joined: Thu Aug 07, 2008 4:38 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 9:20 am

jsfr wrote:
keesje wrote:
I think deep down every body knows what the french really wants.


A succesful AF/KL?

In any case, we know what the Dutch on airliners.net want...

A successful AF/KL, sounds strange but yes. They just don't want to be blown away by AF and being used as a piggy bank.
Flying blue only if possible
 
User avatar
Dutchy
Posts: 8917
Joined: Sat Nov 03, 2007 1:25 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 9:54 am

For me a surprise move by my government. The best thing for AF/KL is that they get rid of the Fench and Dutch government interests.
That said, I can understand the move of the Dutch government since we can see that the French part seems to be quite compensated: Joon gone, new agreement with the pilots etc. And the Dutch side under pressure with Elberts on the brick of being removed and Smith in the board of directors of KLM. I think this intense discussion between Smith and two Dutch ministers raised serious questions with the ministers about the future of KLM and the position of KLM within the group. We have seen a lot of jobs vanishing to Paris with the integration of the two companies.
Many happy landings, greetings from The Netherlands!
 
User avatar
Dutchy
Posts: 8917
Joined: Sat Nov 03, 2007 1:25 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 9:57 am

marcelh wrote:
jsfr wrote:
keesje wrote:
I think deep down every body knows what the french really wants.


A succesful AF/KL?

In any case, we know what the Dutch on airliners.net want...

They have to get rid of their orange glasses. KLM is too small to survive as an independent company. It’s time to get mature for both the French and the Dutch and work together and let those patriottic nonsense behind.


:checkmark:

Don't think anyone thinks that KLM can survive on its own.
Many happy landings, greetings from The Netherlands!
 
marcelh
Posts: 572
Joined: Wed Jun 19, 2013 12:43 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 10:06 am

Dutchy wrote:
marcelh wrote:
jsfr wrote:

A succesful AF/KL?

In any case, we know what the Dutch on airliners.net want...

They have to get rid of their orange glasses. KLM is too small to survive as an independent company. It’s time to get mature for both the French and the Dutch and work together and let those patriottic nonsense behind.


:checkmark:

Don't think anyone thinks that KLM can survive on its own.

I’m happy to be only for 50% Dutch, so I don’t have to deal with the orange glasses. KLM as part of the LH group would lead to “Eurowings Niederlande” and as a part of IAG probably to “Ned Level”. So stick to AF is the least painfull option.
 
User avatar
Aesma
Posts: 11427
Joined: Sat Nov 14, 2009 6:14 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 10:12 am

bigjku wrote:
You are right that the government doesn’t want to do that. But the French unions have a ton of power and in the end I don’t believe any French government that gets sideways with them is long in power.


If you talk about French unions in general they have no power at all, they've been completely sidelined and are unable to respond to the government's reforms.

If you talk about AF's unions, they have the power to kill their company, that's about it. The French government has stated, in plain words, that there would be no bailout if that were to happen. They were trying to sell off their share, however the stock was just too cheap at the time, that's the only reason it hasn't been sold.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
User avatar
Aesma
Posts: 11427
Joined: Sat Nov 14, 2009 6:14 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 10:22 am

AngMoh wrote:
Aviation is an enabler to the economy of the countries listed and therefore strategic. If Schiphol loses international/intercontinental connectivity due to AF/KL strategy, Amsterdam loses when trying global companies trying to set up their HQ.


Being a tax haven is the reason HQs are set up in Amsterdam, not the airport/airline.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
User avatar
Dutchy
Posts: 8917
Joined: Sat Nov 03, 2007 1:25 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 10:48 am

Aesma wrote:
AngMoh wrote:
Aviation is an enabler to the economy of the countries listed and therefore strategic. If Schiphol loses international/intercontinental connectivity due to AF/KL strategy, Amsterdam loses when trying global companies trying to set up their HQ.


Being a tax haven is the reason HQs are set up in Amsterdam, not the airport/airline.


Some indeed, some have their European HQ in the Netherlands, among the reasons stated is the connectivity to the rest of the world through Schiphol.
Many happy landings, greetings from The Netherlands!
 
TYCOON
Posts: 474
Joined: Sun Feb 18, 2007 8:20 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 11:35 am

At the end of the day, I think the views of those really concerned about this will be neutral, including the French government as they have stated publicly wanting to distance themselves from any day-to-day decisions at AF (look how they are trying to get out of ADP!!).
Again, Dutch reaction is quite provincial...
I am personally tired of discussion on profitability etc... as having sat on a number of boards of French companies where we avoided registering profits in France for tax reasons, putting most in Netherlands or elsewhere; In fact in one case, we would never even hold the board meetings in France for tax reasons... we held them in Amsterdam!!! Even though the company was French!
Interesting to note however that I read an article just last week stating that the highest profitability in terms of margins of the AF/KL group was actually Transavia France!!! And the Smith wants to grow this further.
 
User avatar
keesje
Posts: 12813
Joined: Thu Apr 12, 2001 2:08 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 12:53 pm

Dutchy wrote:
marcelh wrote:
jsfr wrote:

A succesful AF/KL?

In any case, we know what the Dutch on airliners.net want...

They have to get rid of their orange glasses. KLM is too small to survive as an independent company. It’s time to get mature for both the French and the Dutch and work together and let those patriottic nonsense behind.


:checkmark:

Don't think anyone thinks that KLM can survive on its own.


How small / big is KLM in your perception? Bigger / smaller than e.g. SQ or Qantas? RPK's are hidden in consolidated figures these days like many performance indicators. But the AF side didn't manage to make the real numbers invisible / up for discussion so far. KLM does E12 billion TO, is flying 140 destinations with 120 aircraft / 70 wide bodies, it has feeders and leisure in different daughter companies. Independent has advantages too, not everything stayed the same as it was in 2003.
"Never mistake motion for action." Ernest Hemingway
 
A388
Posts: 7830
Joined: Mon May 21, 2001 3:48 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 1:20 pm

I haven't seen this discussed here so far but the Dutch government also bought (more) shares in KL/AF because of the impact this has on Schiphol Airport too, knowing that KL is the most important player at Schiphol Airport. This is what the Dutch minister of Finance (Mr. Wopke Hoekstra) also said.

In any case, I also see the relationship between KL and AF as becoming more rocky and understandably so in my opinion.


A388
 
slider
Posts: 7308
Joined: Wed Feb 25, 2004 11:42 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 1:27 pm

Good to see the French and Dutch still scrapping at it.

Why either government should be taking stakes in what should be a fully privatized company is beyond me.
 
Breathe
Posts: 481
Joined: Sat Mar 18, 2017 8:06 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 1:28 pm

Byrdluvs747 wrote:
Breathe wrote:
Maybe an opportunity for IAG to try and take KLM off of AF-KLM's hands. After all, Willie Walsh has said that this was a deal that BA and KLM "should have been done" :stirthepot: :duck: :mrgreen:


BA had the opportunity to merge with KL and Swiss and screwed up both opportunities.

screwed up is a bit of an understatement! :lol:

Going back to KLM, I wonder if a demerger in the long run is better for both companies.
 
marcelh
Posts: 572
Joined: Wed Jun 19, 2013 12:43 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 1:58 pm

slider wrote:
Good to see the French and Dutch still scrapping at it.

Why either government should be taking stakes in what should be a fully privatized company is beyond me.


A few reasons:
1. For the Dutch, KLM is more than “just a fully privatized company”. Dutch people aren’t very patriotic (only when their national football team has to play a tournament, they become lunatic), but a lot of people see KLM as a part of Dutch heritage/identity.
2. Schiphol (and KLM as most important user) is an economic powerhouse and thus very important to the Netherlands economy.
We don’t what has been discussed between Mr. Smith and the Dutch Ministers, but I have the opinion that Mr. Smith wants, can potentially hurt Dutch interests.
3. Next month there are elections in The Netherlands and the coalition isn’t doing well in the polls.
 
JBH
Posts: 21
Joined: Fri Dec 07, 2007 9:57 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 2:13 pm

intrance wrote:
Dutch government has stated French government (minister of Finance and prime minister) had been notified of the intention but had not replied before the transaction was complete. Meanwhile, French government now acts outraged, says there shouldn't be any national interference in the airline group but as recently as 2015 increased their stake to prevent a motion from passing that would reduce the voting power of their shares from double to just one-share-one-vote.

Talk about mixed signals from the French...

To me it seems perfectly reasonable that the Dutch government would want a seat at the table that is or will become equal to the French government. As stated before by others, governments will generally act in the best interest of the country they represent, so having the French involved in AF/KL but not the Dutch is a bit lopsided. How this will impact the airline further one can only speculate. However, if the French want to make a big issue about this, they are clearly operating on double standards. Dutch can't have what the French do have.


Double standard...yes, indeed, if what we see in the press is the full picture. A retired diplomat once told me never to fully believe what you read about deals on this level, especially in the European Union. There is a lot of backdoor discussion that we are not aware of. There are always a lot of talks between leaders of the EU and I doubt the Dutch prime minister would risk his relationship with Macron and France over this. The official stance has to be that nobody was informed upfront because you are not allowed announce such a move upfront to anyone as it could disrupt the market.
Just speculation, of course, and whilst I am not looking to launch a 'conspiracy theory', I believe that this has been discussed with the French government at some level beforehand, that they were aware and see this as an advantage. It creates a large European shareholder which can ensure Franco-Dutch benefits remain for the long term (without the French government spending another dime), it adds an additional buffer in case a hedge fund or foreign company would come in and divide up the company (none of the parties want that) and it may be easier to reform when staff feels that the state cannot fully support them anymore. It is no secret that reform at AF was becoming a headache for the current French government. If you think about it, this deal is also good for Smith, it also gives him leverage for reform. Politicians do not always take the best decisions but spending 800 million Euros (=~14% share) of taxpayer money just as 'revenge', is in my opinion too far fetched.
Just my opinion, though....
 
JBH
Posts: 21
Joined: Fri Dec 07, 2007 9:57 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 2:14 pm

intrance wrote:
Dutch government has stated French government (minister of Finance and prime minister) had been notified of the intention but had not replied before the transaction was complete. Meanwhile, French government now acts outraged, says there shouldn't be any national interference in the airline group but as recently as 2015 increased their stake to prevent a motion from passing that would reduce the voting power of their shares from double to just one-share-one-vote.

Talk about mixed signals from the French...

To me it seems perfectly reasonable that the Dutch government would want a seat at the table that is or will become equal to the French government. As stated before by others, governments will generally act in the best interest of the country they represent, so having the French involved in AF/KL but not the Dutch is a bit lopsided. How this will impact the airline further one can only speculate. However, if the French want to make a big issue about this, they are clearly operating on double standards. Dutch can't have what the French do have.


Double standard...yes, indeed, if what we see in the press is the full picture. A retired diplomat once told me never to fully believe what you read about deals on this level, especially in the European Union. There is a lot of backdoor discussion that we are not aware of. There are always a lot of talks between leaders of the EU and I doubt the Dutch prime minister would risk his relationship with Macron and France over this. The official stance has to be that nobody was informed upfront because you are not allowed announce such a move upfront to anyone as it could disrupt the market.
Just speculation, of course, and whilst I am not looking to launch a 'conspiracy theory', I believe that this has been discussed with the French government at some level beforehand, that they were aware and see this as an advantage. It creates a large European shareholder which can ensure Franco-Dutch benefits remain for the long term (without the French government spending another dime), it adds an additional buffer in case a hedge fund or foreign company would come in and divide up the company (none of the parties want that) and it may be easier to reform when staff feels that the state cannot fully support them anymore. It is no secret that reform at AF was becoming a headache for the current French government. If you think about it, this deal is also good for Smith, it also gives him leverage for reform. Politicians do not always take the best decisions but spending 800 million Euros (=~14% share) of taxpayer money just as 'revenge', is in my opinion too far fetched.
Just my opinion, though....
 
CaliguyNYC
Posts: 998
Joined: Tue Sep 27, 2016 7:27 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 2:43 pm

I laugh at some of these comments - especially the declaration of war by the dutch on the French (or that it is revenge). Please. I don't think the Dutch are being nationalistic at all. AF/KL need clear guidelines on where investment will go. One clear point should be, if routes don't make money in one hub (say CDG) they get cut leaving the profitable route at say AMS. It looks like Mr Smith wants to scale back profitable KLM routes to help boost losing AF routes. That is just wrong. Also if AF continues to see strikes every year than investment should go to KL - that is what a real business would do (someone said national airlines are a thing of the past - I think many Dutch would agree as long as investment went where the money was). That said, I think the Dutch did the right thing. Now AF/KL has to listen to both the French and Ditch governments
 
Noshow
Posts: 897
Joined: Wed Jun 15, 2016 3:20 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 2:46 pm

How about separating the two airlines and just do maybe fleet orders and spare parts together? There is no way they unify.
What would happen if KLM would be on their own? What did KLM gain by working together with AF?
Going to bed with BA would create the same sort of problem, now with LHR instead of CDG.
 
User avatar
keesje
Posts: 12813
Joined: Thu Apr 12, 2001 2:08 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 3:19 pm

AF tried to quietly reduce KLM influence & it didn't work out. It started with Elbers being refused the groups top position because he is dutch. After 15 years of french CEO's.

Then french government refused to sell of their stake, despite claiming they wanted out. It would be cultural political revolution, so a see first policy was adopted.

Delta & China Eastern were each allowed to buy 10% of AF-KLM The dutch government was told afterwards. And they got the message.

Then Smith paid off the striking french unions and tried to move out Elbers. He pointed out the dutch government they shouldn't interfer, they aren't stakeholders!

I assume KLM climbed a bit on Smith's priorities list since yesterday and the french must be enthousiastic to give up some power and influence for the best of the AF-KLM company! Because that is the most important.
Last edited by keesje on Wed Feb 27, 2019 3:37 pm, edited 2 times in total.
"Never mistake motion for action." Ernest Hemingway
 
User avatar
Dieuwer
Posts: 1184
Joined: Tue Dec 26, 2017 6:27 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 3:33 pm

If Virgin Atlantic can be viable by itself (albeit with help of DL), why not KL (with help of DL)?
 
Noshow
Posts: 897
Joined: Wed Jun 15, 2016 3:20 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 3:37 pm

Good point. How about Delta for partnering instead?
If the current issues have escalated to cabinet government level I see no easy way out. Might be time to go separate ways?
 
User avatar
Aesma
Posts: 11427
Joined: Sat Nov 14, 2009 6:14 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 3:47 pm

Let's keep in mind the AFKL group spent 1.4 billion euros for a new pension deal for KLM pilots in 2017.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
Jetty
Posts: 833
Joined: Wed Nov 11, 2015 12:27 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 3:54 pm

yoni wrote:
Things have changed in France. Unionization rate has decreased significantly. Major reforms have been adopted despite strong union protests. The government did not give in to their demands.

I'm not sure about unionization, but the French still love to strike. Thus employee morale seems to be as low as it's been before.
Image

yoni wrote:
That's their perception. Ben Smith has not indicated in any way that KLM's role will be diminished. If he did, that would ridiculous as KLM is profitable and its hub plays an important role for both AF and KLM.

It would be ridiculous indeed. Yet it's on the record that the Dutch government decided this right after their meeting with Mr. Smith. We don't know what was said but it had to be something that triggered this action

Amsterdam wrote:
KLM is for 51% in Dutch hands.
That is the case since 2004.

Someone in this thread said the holding owns 93% of KLM.
That is not true.
AF-KLM owns 49% of the airline KLM.

Yes it is a striking costruction.
The holding is the boss, but at the same time it has only 49% of the shares of KLM.

The holding owns 93% of dividend paying shares so it was true depending on how you look at it. It is also true that they don't own 93% of the voting rights, but the Dutch entities holding 45% of the voting rights have never used them since the inception of AFKL. Without those they own 93% of the voting rights as well.

jsfr wrote:
My main question is - when Smith went to Holland two weeks ago to clarify the strategy and future organisation with Elbers. Did Elbers know this was going to happen and was Smith informed?

If he hid this information from Smith (who was then and is still now, basically his boss), that is deceitful and he clearly cannot be trusted in the AFKL group as it exists today and should be shown the door immediately.

If he was involved in the Dutch government taking this capital share after the meetings - that is also strange and certainly goes against the spirit of their agreements. Again I do not see how someone can remain in such a position under those circumstances.

And I do not see how you can fire a CEO that has unanimous support from the Government, staff and unions to the point where they planned on striking if he would be fired (still dozens of strike-days left to get even with their French colleagues) and heads the part that delivers ~80% of the groups' profits. What was deceitful was the intention to fire him and the Dutch government buying shares (likely with Elbers' knowledge and/or support) was a result of that, not the other way around.

jsfr wrote:
Your comment (and that of almost all Dutch posters) that AF nees to become more competitive is fair, but I think it is also fair to acknowledge the steps forward in teh past few months since Smith has started... For example:
- Getting rid of Joon
- Exceptional progress in French union relations

Anyone could make exceptional progress in French union relations by caving in to most of their demands. That's exactly the problem about what has happened. KLM staff supported their employer by accepting worse but fair employment terms, and the French chose to strike instead and got their way. There's a reason why previous AF CEO's didn't chose that route: it isn't viable financially.

TYCOON wrote:
I am personally tired of discussion on profitability etc... as having sat on a number of boards of French companies where we avoided registering profits in France for tax reasons, putting most in Netherlands or elsewhere; In fact in one case, we would never even hold the board meetings in France for tax reasons... we held them in Amsterdam!!! Even though the company was French!

And I am tired of uninformed statements like yours. While it is true in general that The Netherlands offers a more business friendly environment than France there is no incentive for AFKL to shift profits to KL on paper as you imply, as AFKL only owns 93% of KLM and thus would be giving away 7% of their profits to other shareholders by doing that.

Dieuwer wrote:
If Virgin Atlantic can be viable by itself (albeit with help of DL), why not KL (with help of DL)?

:checkmark:
And the shares the Dutch government bought (14%) could make that happen if it is supported by DL (9%), MU (9%) and the KL pilots (5%). Without those extra 14% it'd be much harder to achieve without the cooperation of the French.
Last edited by Jetty on Wed Feb 27, 2019 3:58 pm, edited 2 times in total.
 
User avatar
cv990Coronado
Posts: 339
Joined: Thu Nov 08, 2007 4:38 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 3:54 pm

Noshow wrote:
Good point. How about Delta for partnering instead?
If the current issues have escalated to cabinet government level I see no easy way out. Might be time to go separate ways?


I agree that's exactly the point I raised in an earlier post. Delta with a 25% share. Their expertise and influence help KLM to improve further rather than the reserve with AF input.
SSC-707B727 737-741234SP757/762/3/772/WA300/10/319/2/1-342/3/6-880-DAM-VC10 TRD 111 Ju52-DC8/9/10/11-YS11-748-VCV DH4B L
 
User avatar
MrBren
Posts: 218
Joined: Wed Jun 15, 2016 11:44 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 3:59 pm

Aesma wrote:
Let's keep in mind the AFKL group spent 1.4 billion euros for a new pension deal for KLM pilots in 2017.


:checkmark:
 
JBH
Posts: 21
Joined: Fri Dec 07, 2007 9:57 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 4:33 pm

Wouldn't DL want a bigger partner in Europe than just KL (even if they add AZ and VA)? It seems likely that if DL and the Dutch state decide to move KL out of AFKL and with DL, AF will not continue to partner with DL...
 
Jetty
Posts: 833
Joined: Wed Nov 11, 2015 12:27 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 4:41 pm

French Finance minister calls it the Dutch government's decision incomprehensible. https://twitter.com/BrunoLeMaire/status ... apital.php

Self-awareness apparently isn't one of his most best qualities, also warning against "national state interference" while France is the largest shareholder. :roll:
 
jsfr
Posts: 92
Joined: Tue Oct 20, 2009 2:36 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 4:46 pm

@Jetty

No-one says AF wasn't a basket case for years, indeed mostly due to political intervention, uneffective/belligerent Union relations and "nationalist" motivations.

However, the last 6 months have been very very different and shown extraordinary progress on all of those fronts - and lets face it, that has happened because of Mr. Smith and because (surprisingly) AFKL decided to take on a non-French CEO who came without the French elitist "baggage"

Yet, at the same time during these last six months, we see a sudden incerase in the level of concern at KLM and by KLM "suporters". It seems to me that a lot of people at KLM are simply concerned by the fact that AFKL is maybe going to be a little less distracted by AF and that maybe the KL part of the AFKL group will have a little more oversight.

I do not understand why the Dutch are so passionate about KL and not AT ALL interested in the overall success of AFKL... Although now that the governmet is a shareholder in AFKL, maybe (hopefully) that will change.
 
JBH
Posts: 21
Joined: Fri Dec 07, 2007 9:57 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 4:56 pm

I wonder what happened during the meeting with the Dutch ministers and Smith. Something must have triggered all this? Don't forget that most of the coalition parties in the Dutch government are against meddling in companies. Understood that KL is strategically important for the Netherlands more so than AF is for France but to go against their own values...
 
jsfr
Posts: 92
Joined: Tue Oct 20, 2009 2:36 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 5:02 pm

JBH wrote:
I wonder what happened during the meeting with the Dutch ministers and Smith. Something must have triggered all this? Don't forget that most of the coalition parties in the Dutch government are against meddling in companies. Understood that KL is strategically important for the Netherlands more so than AF is for France but to go against their own values...


Who nows - maybe Smith suggested it?

It kind of makes sense and maybe makes his life easier and makes the Dutch feel more important/recognised/bigger which seems to be important.

That said, the way it has played out - particularly the tiing of yesterday evenings annuncement - seems to be in contravention of stock market proctices. There was certainly a lot of money to be made on trading the past week...
 
JBH
Posts: 21
Joined: Fri Dec 07, 2007 9:57 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 5:07 pm

Good point! It does seem to make sense.
 
Bongodog49
Posts: 58
Joined: Fri Feb 08, 2019 11:35 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 5:18 pm

To anyone outside of France and the Netherlands, this truly does look like the definitive article on "how to screw up merging two airlines" Look at all the other big mergers, they either as with the major US mergers result in a single name and completely merged fleet and flight operations, or as with the LH group and IAG, airlines keep their individual identity but their senior management report to a holding company with compete control over all matters, with stakeholders only owning shares in the holding company.

Its easy to put all the blame on AF and the French Govt, KLM however need to take their share, everyone who ever showed much interest in AF knew how things were and that the Govt were pulling strings on a regular basis, they should have never agreed to the terms and conditions. I suspect they went along with it as they preferred this to LH or IAG which would have been a proper full merger.
 
TYCOON
Posts: 474
Joined: Sun Feb 18, 2007 8:20 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 5:59 pm

TYCOON wrote:
I am personally tired of discussion on profitability etc... as having sat on a number of boards of French companies where we avoided registering profits in France for tax reasons, putting most in Netherlands or elsewhere; In fact in one case, we would never even hold the board meetings in France for tax reasons... we held them in Amsterdam!!! Even though the company was French!

And I am tired of uninformed statements like yours. While it is true in general that The Netherlands offers a more business friendly environment than France there is no incentive for AFKL to shift profits to KL on paper as you imply, as AFKL only owns 93% of KLM and thus would be giving away 7% of their profits to other shareholders by doing that.

@Jetty
And you are so informed?? Apparently I am much more informed than you are, and I have even provided my real-life experience having served on boards of French companies with significant Dutch operations... It's called real life... not internet jibberish that you seem to espouse endlessly here. Your rationale makes 0 sense... probably why you are likely to not be running much!!
 
User avatar
spinotter
Posts: 468
Joined: Wed May 27, 2015 1:37 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 6:27 pm

yoni wrote:
keesje wrote:
The french government owns 14.3% of the shares of AF/KLM. The dutch strive to get 14%.

When Delta and China Eastern got 10% each, the dutch government was informed afterwards.

In recent weeks the AF side tried to remove successful KLM CEO Elbers. Unexplainable from a dutch perspective.

That raised question marks on the mutual respect & interests.


Respect goes both ways. The Dutch move is an act of revenge, not mutual respect.

I got it. You don't trust any French involved in the management of Dutch companies. How surprising.


It's not that. Air France has been a financial basket case as long as I have been alive. Why should strike-prone Air France drag KLM down? Vive Elbers! I know that capitalism is neither fair nor just nor desirable, but that's just how it is. Until human beings improve at least.
 
AvioBlue
Posts: 2
Joined: Wed Feb 27, 2019 6:30 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 6:36 pm

The Dutch government reports that they have increased their share in AF-KLM to 14%, thus finishing the transaction.

KLM and its employees seem happy about it, the holding not so much.

Source: https://www.rijksoverheid.nl/actueel/ni ... france-klm
 
User avatar
Dieuwer
Posts: 1184
Joined: Tue Dec 26, 2017 6:27 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 6:44 pm

The AF/KL board apparently consists of 10 French directors, 5 Dutch directors, and 1 American. No wonder things are as they are. The French can just easily vote themselves goodies paid from the pockets of the Dutch.
 
Jetty
Posts: 833
Joined: Wed Nov 11, 2015 12:27 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 6:59 pm

TYCOON wrote:
Apparently I am much more informed than you are, and I have even provided my real-life experience having served on boards of French companies with significant Dutch operations... It's called real life... not internet jibberish that you seem to espouse endlessly here. Your rationale makes 0 sense... probably why you are likely to not be running much!!

I don't doubt your real-life experience, and I knew that happened before you mentioning it. Where you go wrong is assuming your personal experience applies to AFKL. As I explained this doesn't make sense in their situation as unlike most other concerns they don't fully own their operations in The Netherlands (KLM) but only receive 93% of dividends and they would thus be giving away free money to other KL shareholders by shifting profits to KL on paper. If that doesn't make sense to you please explain why a French company with the French government as largest shareholder would be giving away 7% of their profits to other shareholders of KL.
 
 
TYCOON
Posts: 474
Joined: Sun Feb 18, 2007 8:20 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 7:39 pm

Jetty wrote:
TYCOON wrote:
Apparently I am much more informed than you are, and I have even provided my real-life experience having served on boards of French companies with significant Dutch operations... It's called real life... not internet jibberish that you seem to espouse endlessly here. Your rationale makes 0 sense... probably why you are likely to not be running much!!

I don't doubt your real-life experience, and I knew that happened before you mentioning it. Where you go wrong is assuming your personal experience applies to AFKL. As I explained this doesn't make sense in their situation as unlike most other concerns they don't fully own their operations in The Netherlands (KLM) but only receive 93% of dividends and they would thus be giving away free money to other KL shareholders by shifting profits to KL on paper. If that doesn't make sense to you please explain why a French company with the French government as largest shareholder would be giving away 7% of their profits to other shareholders of KL.


@jetty
It's simple... it's called leakage... and if the benefits (in the form of reduced taxes) outweigh the leakage, then firms will do it. Tax optimization 101.
 
AOMlover
Posts: 1199
Joined: Sun Jul 22, 2001 6:03 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 8:04 pm

It’s funny how so many people on this board are complaining about AF dragging KL down, while admitting at the same time that KL has never done so well.

Quite a contradiction there ! Is it so hard to admit that KL has greatly benefited from being part of this airline group, hence the situation where they are now ?
 
User avatar
keesje
Posts: 12813
Joined: Thu Apr 12, 2001 2:08 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 8:27 pm

AOMlover wrote:
It’s funny how so many people on this board are complaining about AF dragging KL down, while admitting at the same time that KL has never done so well.

Quite a contradiction there ! Is it so hard to admit that KL has greatly benefited from being part of this airline group, hence the situation where they are now ?


KLM did go well before the merger. They cashed a billion from NWAC too. They weren't saved by government cash injections like AF. Not that it matters now, just to prevent misunderstandings.

Image

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A61994TJ0358
"Never mistake motion for action." Ernest Hemingway
 
Curiousflyer
Posts: 542
Joined: Sun Oct 22, 2006 3:19 am

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 8:36 pm

I am also surprised at how obsessed KLM are with keeping all of their profit or claiming AF is eating their lunch: without the AF merger they would have been crushed by competition because they could not get to a critical size. Or they would have had to become a LCC and their employees would have suffered from that. AF is the only buyer that guaranteed that KLM could retain significant independence and protect its workforce, unlike LH or BA that were only offering to treat them the way Swiss or IB have been treated, with much more integration.

I am under the impression that KL are not taking proper advantage of the independence they secured: instead of complaining all the time can they think about the way they can positively contribute to the group, while maintaining their own spirit and growth? Because let's not forget that over the past 15 years KL did not stop growing, so it is very weird to say that AF is taking business from them, on the contrary I think that the group ensures they keep a good balance between the markets of both airlines so they can play the right strengths in the right markets.
 
Winterapfel
Posts: 24
Joined: Wed Feb 25, 2009 4:35 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 8:41 pm

Can anyone explain where the amount of 14% comes from? What can be done with 14% that can not be done with e.g. the earlier mentioned 12.9%?
 
Eikie
Posts: 20
Joined: Tue Nov 06, 2018 1:15 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 8:51 pm

Winterapfel wrote:
Can anyone explain where the amount of 14% comes from? What can be done with 14% that can not be done with e.g. the earlier mentioned 12.9%?
Maybe to get to the same percentage as the French, leaving them a lead of .3% to give them the Idea they are still the biggest half.

Curiousflyer wrote:
Because let's not forget that over the past 15 years KL did not stop growing, so it is very weird to say that AF is taking business from them, on the contrary I think that the group ensures they keep a good balance between the markets of both airlines so they can play the right strengths in the right markets.

Let's also not forget the fact they had a deal stipulating growth on 1 side would not exceed a certain ratio compared to the other half.
In itself it is a sensible rule, but in practice KLM employees accepted lower pay/reduced benefits when Times got tough and KLM as a company worked hard to create such growth while AF was on strike and had too high operating cost, causing them to stall.
Result was a stunted growth on the Dutch side, a reduction in the potential they had, since AF wouldn't let go of that agreement even if it would benefit the holding.

Trying to take the money KLM had made while they couldn't/wouldn't and restricting KLM in making more does not create trust.
Last edited by Eikie on Wed Feb 27, 2019 9:01 pm, edited 1 time in total.
 
chonetsao
Posts: 244
Joined: Sun Nov 06, 2005 3:55 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 9:00 pm

Curiousflyer wrote:
I am also surprised at how obsessed KLM are with keeping all of their profit or claiming AF is eating their lunch: without the AF merger they would have been crushed by competition because they could not get to a critical size. Or they would have had to become a LCC and their employees would have suffered from that. AF is the only buyer that guaranteed that KLM could retain significant independence and protect its workforce, unlike LH or BA that were only offering to treat them the way Swiss or IB have been treated, with much more integration.

I am under the impression that KL are not taking proper advantage of the independence they secured: instead of complaining all the time can they think about the way they can positively contribute to the group, while maintaining their own spirit and growth? Because let's not forget that over the past 15 years KL did not stop growing, so it is very weird to say that AF is taking business from them, on the contrary I think that the group ensures they keep a good balance between the markets of both airlines so they can play the right strengths in the right markets.


There are lots of IF in your statement. IF the merger did not happen, KLM MAY not survive. How about IF the merger did not happen, KLM may have partnered with NW and now DL and grew even bigger? IF is IF, it did not happen. That is why it is IFs.

Nobody knows what would have happened if it did not happen. End of.
 
User avatar
Dieuwer
Posts: 1184
Joined: Tue Dec 26, 2017 6:27 pm

Re: Dutch government increases stock holding in KL-AF group.

Wed Feb 27, 2019 9:25 pm

If the AF side is so unhappy with KL they should breakup the marriage and hook up with AZ. Lots of cultural similarities: both love to strike and both love to take government handouts. Should be a match made in heaven! :D
Last edited by Dieuwer on Wed Feb 27, 2019 9:28 pm, edited 3 times in total.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos