According to the Netherlands’ Court of Audit, the Dutch government's purchase of AFKLM shares in 2019 was irregular.

https://www.reuters.com/article/netherlands-air-franceklm-idUSL8N2D22L6

MrBren wrote:

According to the Netherlands’ Court of Audit, the Dutch government's purchase of AFKLM shares in 2019 was irregular.

https://www.reuters.com/article/netherlands-air-franceklm-idUSL8N2D22L6

Officially the purchase of stock was irregular because parlement wasn't informed beforehand.
But, because parlement approved the purchase, there won't be any consequences.
Just something they need to consider in the future.

Just weird that Reuters picks up on such a (in my opinion) minor event.

https://nos.nl/artikel/2334499-rekenkam ... e-klm.html (link in Dutch)

Dont know if this fits in this megalo master thread, so here it is for who are interested...
KL highlighting their current measures for pax in an informative video:
Source: https://www.facebook.com/KLM/videos/3086953074698653/

A380 is finished at AF

"Faced with the COVID-19 crisis and given its impact on expected activity levels, the Air France-KLM group today announces the definitive end of operations for Air France Airbus A380s."

https://www.airfranceklm.com/fr/fin-de- ... air-france

Can't say we are shocked. Even without Covid-19 think Ben Smith and airline were not very enthused by the model having put off cabin refurbishments and already planned reduction in the fleet count.

Removal of A380 should come as a relief to many and the company.
There was a clear financial buden hanging over the company keeping the niche fleet from crews, MRO needs and other support infrastructure weighed against the political and PR image of utilizing the aircraft made it difficult to fully remove until now that Covid-19 provided the opportunity.

Is the A340 retired yet at AF? How about the 744 at KLM? The future of AF-KLM is massive twins as evidenced by Air Canada.

x1234 wrote:

Is the A340 retired yet at AF? How about the 744 at KLM? The future of AF-KLM is massive twins as evidenced by Air Canada.

Both types are now to be retired.

https://www.forbes.com/sites/willhorton ... 04c882af06

No reason to ever set a foot on an AF plane ever again. I've had both the best and the worst flight on AF. The best was A380 to MIA and the worst 77W to FDF both in Y. It's amazing to have such a polar opposite level of travelling comfort on a long haul plane on the same carrier.

Odd that this announcement comes on the same day as LH announcing their plans to keep half of their A380 fleet ready for an eventual return to service.

Strato2 wrote:

No reason to ever set a foot on an AF plane ever again. I've had both the best and the worst flight on AF. The best was A380 to MIA and the worst 77W to FDF both in Y. It's amazing to have such a polar opposite level of travelling comfort on a long haul plane on the same carrier.

Yes we know you hate the 777. You are telling that in every topic that brings up that aircraft. Not relevant to this topic.

--
I read on luchtvaartnieuws that the fase out costs for the A380 are 500 million euros. Can anyone explain why that is so high?

'Ready for an eventual return' certainly isn't a guarantee they'll fly again. 'We don't want to eat a write-off just yet' is another way to interpret it.

PANAMsterdam wrote:

I read on luchtvaartnieuws that the fase out costs for the A380 are 500 million euros. Can anyone explain why that is so high?

Probably write downs due to the difference between book value and current actual value (for owned aircraft), as well as penalties for early lease cancellation (for leased aircraft). Depending on the lease / financing terms, there may also be a requirement to return them in a certain condition, so AF will also have to pay for some maintenance, refits or repaints.

mxaxai wrote:

PANAMsterdam wrote:

I read on luchtvaartnieuws that the fase out costs for the A380 are 500 million euros. Can anyone explain why that is so high?

Probably write downs due to the difference between book value and current actual value (for owned aircraft), as well as penalties for early lease cancellation (for leased aircraft). Depending on the lease / financing terms, there may also be a requirement to return them in a certain condition, so AF will also have to pay for some maintenance, refits or repaints.

My gosh, 500 million! That's a lot of money.
I assume that the owned aircraft are flown straight to the desert?

There seems no plausible way AF will be able to pay the 7 billion euro and maybe even more loans back. And when its official sometime in the future that they wont pay it back, AF will likely be nationalized. Bancruptcy is the other option.

Used to leave SFO weekly in the afternoons on WN and would look across at the AF380. Such a great looking plane, shame to see it leave.

Strato2 wrote:

No reason to ever set a foot on an AF plane ever again. I've had both the best and the worst flight on AF. The best was A380 to MIA and the worst 77W to FDF both in Y. It's amazing to have such a polar opposite level of travelling comfort on a long haul plane on the same carrier.

You were traveling in Y and the fact that as much as you decry the 777, the fact you still flew the 777 means you proved what every airline knows, if the price is right, passengers will fly. A380 isn't making them the return they need to operate it or they would. AF didn't lose your business. People vote with their wallets.

It's official A380 done at AIR FRANCE
https://simpleflying.com/air-france-air ... etirement/

TropicalSky wrote:

It's official A380 done at AIR FRANCE
https://simpleflying.com/air-france-air ... etirement/

It was official in post 155, not this joke site you links.

TropicalSky wrote:

It's official A380 done at AIR FRANCE
https://simpleflying.com/air-france-air ... etirement/

Already posted in Air France press release in Reply # 155 and in the subsequent discussions

I got to fly on an AF A380 from LAX to CDG this past September and got a seat on the upper deck. Sad end to this aircraft at AF.

PANAMsterdam wrote:

mxaxai wrote:

PANAMsterdam wrote:

I read on luchtvaartnieuws that the fase out costs for the A380 are 500 million euros. Can anyone explain why that is so high?

Probably write downs due to the difference between book value and current actual value (for owned aircraft), as well as penalties for early lease cancellation (for leased aircraft). Depending on the lease / financing terms, there may also be a requirement to return them in a certain condition, so AF will also have to pay for some maintenance, refits or repaints.

My gosh, 500 million! That's a lot of money.
I assume that the owned aircraft are flown straight to the desert?

Makes sense though. Residual value will crater because there's no demand for them and even scrap value will be depressed with a large number of them headed to the scrapyard in a short period of time and a small demand for parts.

I'm still interested to see what QF does with theirs. They've been rather mum on the topic.

PhilMcCrackin wrote:

PANAMsterdam wrote:

mxaxai wrote:

Probably write downs due to the difference between book value and current actual value (for owned aircraft), as well as penalties for early lease cancellation (for leased aircraft). Depending on the lease / financing terms, there may also be a requirement to return them in a certain condition, so AF will also have to pay for some maintenance, refits or repaints.

My gosh, 500 million! That's a lot of money.
I assume that the owned aircraft are flown straight to the desert?

Makes sense though. Residual value will crater because there's no demand for them and even scrap value will be depressed with a large number of them headed to the scrapyard in a short period of time and a small demand for parts.

I'm still interested to see what QF does with theirs. They've been rather mum on the topic.

QF would likely need more B789s, and probably to install WiFi on the B789 fleet as this would mean double section flights on some routes...especially MEL-LAX and SYD-LAX. Also, whatever is for Project Sunrise would likely be needed for SYD-SIN-LHR as well as SYD-LHR nonstop, along with SYD-JFK nonstop.

Returning to the topic of the AF A380...were they making money on it other than CDG-JFK, for which the fifth daily flight had been planned to be restored (along with keeping the ORY-JFK rotation) prior to COVID-19?

AF-KL's CEO for Mexico mentioned in an interview in 2019 that it was a great decision to replace the 744 with the A380 on the CDG-MEX route because MEX turned out to be a great market for F-Class seats. Although he did not explicitly mention the overall profitability of the A380 on the route all-year long, he did indicate MEX was a great market for the A380, so I would not be surprised if CDG-MEX on the A380 was profitable on a net basis; otherwise, they would have swiftly replaced the whale with the 77W. Going forward, I think it is expected that this route will be operated by the 777-300ER.

Damn, no surprise but still sad. The A380 was always a difficult operation for AF, they simply don't have enough Premium Traffic for it to be a true money maker. Sadly they won't be the last airline to emerge from this after retiring the A380 fleet.

PhilMcCrackin wrote:

I'm still interested to see what QF does with theirs. They've been rather mum on the topic.

According to https://airwaysmag.com/airlines/qantas- ... -covid-19/ only six of the 12 QF A380s will return.

Revelation wrote:

PhilMcCrackin wrote:

I'm still interested to see what QF does with theirs. They've been rather mum on the topic.

According to https://airwaysmag.com/airlines/qantas- ... -covid-19/ only six of the 12 QF A380s will return.

So six are better than nothing isn`t it ?

mxaxai wrote:

Odd that this announcement comes on the same day as LH announcing their plans to keep half of their A380 fleet ready for an eventual return to service.

Not really for me - AF has always been struggling with A380 unlike quite a few other carriers.

Michael

aemoreira1981 wrote:

Returning to the topic of the AF A380...were they making money on it other than CDG-JFK, for which the fifth daily flight had been planned to be restored (along with keeping the ORY-JFK rotation) prior to COVID-19?

I am guessing CDG-LAX with some significant premium traffic made money as well.

mercure1 wrote:

A380 is finished at AF

"Faced with the COVID-19 crisis and given its impact on expected activity levels, the Air France-KLM group today announces the definitive end of operations for Air France Airbus A380s."

https://www.airfranceklm.com/fr/fin-de- ... air-france

Just a side note, can we split this topic in a seperate thread instead of merging it into this megalo master thread?

airzona11 wrote:

Used to leave SFO weekly in the afternoons on WN and would look across at the AF380. Such a great looking plane, shame to see it leave.

Strato2 wrote:

No reason to ever set a foot on an AF plane ever again. I've had both the best and the worst flight on AF. The best was A380 to MIA and the worst 77W to FDF both in Y. It's amazing to have such a polar opposite level of travelling comfort on a long haul plane on the same carrier.

You were traveling in Y and the fact that as much as you decry the 777, the fact you still flew the 777 means you proved what every airline knows, if the price is right, passengers will fly. A380 isn't making them the return they need to operate it or they would. AF didn't lose your business. People vote with their wallets.

This was my first (and last if possible) flight on the 77W 10ab. I was also curious and there was not much alternatives to go and no reasonable alternatives from where I live. The price was not right it was quite expensive regardless of the sardine can 77W. For these reasons AF got my business. But I'll go out of my way to not give it to them again.

FlyingHonu001 wrote:

mercure1 wrote:

A380 is finished at AF

"Faced with the COVID-19 crisis and given its impact on expected activity levels, the Air France-KLM group today announces the definitive end of operations for Air France Airbus A380s."

https://www.airfranceklm.com/fr/fin-de- ... air-france

Just a side note, can we split this topic in a seperate thread instead of merging it into this megalo master thread?

A new thread has been opened, refer to

viewtopic.php?f=3&t=1446535

After a robust discussion, the moderators have decided that the retirement of the A380 for Air France should have its own thread

Thank you, Mods, for that robust discussion.

How does the national pride/PR play out with AF dropping the A380? Certainly, AF is not the typical A380 operator and symbolism is higher in the land where it was built.

UPlog wrote:

How does the national pride/PR play out with AF dropping the A380? Certainly, AF is not the typical A380 operator and symbolism is higher in the land where it was built.

It is just my view here but I don't feel any sense of pride with regards to Air France and the A380, for the following reasons:

- The product while probably attractive in the early years, is now really out-dated on AF's A380s, little investment was made to improve it
- AF rarely if at all did advertising promoting the A380, I am just a regular passenger but I've seen more commercials from EK, EY with their flagship product on the A380 than AF on theirs
- The fleet was deployed on the best possible markets according to demand in particular premium, meaning national pride was not a factor in AF choosing to deploy A380 to a particular route for political reasons

Deciding to retire the fleet in my view is purely driven by financial numbers, given the program is already no longer accepting orders there would really be no political reason to maintain a loss making fleet operating if the numbers show this is the best solution for AF.

Yes there is symbolism, but facts are known at AF has long had challenges with profitably integrating A380.
Combined with todays global aviation situation and new independent CEO at helm of AF its more understood to be practical outcome after the years of challenges with model.

The EUR €500mil impairment write-down charge is pretty standard. Companies must recognize the impairment when a triggering event occurs (such as retirement) and properly asses values within their depreciation policies and end net book values.
AF already in 2019 took a €126 million charge on the A380 fleet due to accelerated depreciation and related charges particularly cabin retrofit programs, penalties on contracts, and spares inventory.

Another recent example, Delta this month said it will recognize a $1.4-1.7 Billion impairment charge for the retirement of its MD80/90 and 777 fleets.

What were the expiration dates of the leases (for the 6 that were leased)? If it was 2022 then the penalties for early lease cancelation would surely make a good chunk of the 5 mil, wouldn't it?

If the A340-300 is retired, what aircraft will AF operate to SXM? I know KL flies the A332, would AF do the same? AF schedules still have the A340 listed.

I guess it would either be the 787 or A330 given the lower demand due to COVID. When things pick up maybe even the A350?

Any thoughts?

kl838 wrote:

If the A340-300 is retired, what aircraft will AF operate to SXM? I know KL flies the A332, would AF do the same? AF schedules still have the A340 listed.

I guess it would either be the 787 or A330 given the lower demand due to COVID. When things pick up maybe even the A350?

Any thoughts?

The big factor with SXM is engine-out mountain clearence. The 340 did not have that problem since with 3 engines turning it was still quite capable to clear the mountains. The 777 cannot take off from there with the fuel needed to go straight to Europe and any reasonable payload. The 744 had to stop in CUR as well. The 330 and the 350, I don't know. I guess the 332 should be OK givent its relatively high power-to-weight ratio.

workhorse wrote:

kl838 wrote:

If the A340-300 is retired, what aircraft will AF operate to SXM? I know KL flies the A332, would AF do the same? AF schedules still have the A340 listed.

I guess it would either be the 787 or A330 given the lower demand due to COVID. When things pick up maybe even the A350?

Any thoughts?

The big factor with SXM is engine-out mountain clearance. The 340 did not have that problem since with 3 engines turning it was still quite capable to clear the mountains. The 777 cannot take off from there with the fuel needed to go straight to Europe and any reasonable payload. The 744 had to stop in CUR as well. The 330 and the 350, I don't know. I guess the 332 should be OK given its relatively high power-to-weight ratio.

Well KL used to fly nonstop between SXM and AMS with the A332 so we know for sure that will work. The only thing is that it will result in a decrease in seat count from 278 to either 208 to 224 seats. The closest match is the 789 with 279 seats. Given the current lack of demand, they would most probably want to downsize the aircraft size.

Currently booked on a flight back to London with AF in Aug from SXM - LHR, so it will be interesting to see what aircraft is deployed.

AF in summer 2019 did operate the A332 to SXM mixed in with the Joon operation.
I suspect the 777 COI fleet might be used in the future. They are in the process of cabin refurbishment on 10 frames that focus on the Caribbean and the Indian Ocean routes.
There is also option of triangular route and connect SXM with another French Caribbean destination.

mercure1 wrote:

AF in summer 2019 did operate the A332 to SXM mixed in with the Joon operation.
I suspect the 777 COI fleet might be used in the future. They are in the process of cabin refurbishment on 10 frames that focus on the Caribbean and the Indian Ocean routes.
There is also option of triangular route and connect SXM with another French Caribbean destination.

The 77Ws will definitely have to stop somewhere on the way from SXM to Europe. Besides, I am not even sure they can turn around at the end of the runway.

EddieDude wrote:

airbuster wrote:

- No A350’s at KLM yet ;P

As part of Ben Smith's fleet rationalization plans, all A350s will be allocated to and operated by AF. KL will have Dreamliners (-9s and -10s). AF will keep a few 789s that had been delivered to it prior to the decision, but all future 789s for the group will be delivered to KL.

Oh really? I know you mean well bro but I meant that tongue in cheek. I (used to, for now) fly KL A330’s! I know what was decided but since co is and state aid is happening things could change.

Even though AFKL needs billions of euros of taxpayer money to survive, we don't have to worry that that Ben Smith needs a cardboard box to sleep in underneath a bridge, because he just got rewarded his bonus of a whopping 768.456 euro. Majority of shareholders voted in favor of this bonus, the Dutch state (14% minority shareholder) voted against.

I don't care how good a CEO has done his job in 2019, in this unprecedented year all airlines are close to bankruptcy but AFKL manages to cause not once, not twice but THREE times a stir over salary/bonuses in a couple of months, while firing thousands of employees at the same time.

Unbelievable.

source in Dutch

I have no problem with Ben Smith getting money. When he came to AFKL he actually took a paycut, but was promised subsequent remuneration including ones based on performance targets.
Its important leadership is well compensated as good talent will be lost otherwise. Everything should be done to keep him on board during these critical junction.

Air France KLM CEO Awarded 768K bonus

(in English)
https://nltimes.nl/2020/05/26/air-franc ... govt-votes

mercure1 wrote:

I have no problem with Ben Smith getting money. When he came to AFKL he actually took a paycut, but was promised subsequent remuneration including ones based on performance targets.
Its important leadership is well compensated as good talent will be lost otherwise. Everything should be done to keep him on board during these critical junction.

I would have agreed with you if 2020 had been an ordinary year. But now with a global pandemic, airliners going bankrupt or getting saved with huge amounts of taxpayer money i don't agree with you. The man earns a lot of money already, and it would have been a very nice gesture if he would have said "Hey, I might have earned my bonus but because of the huge crisis we are facing I am saying no to it."

PANAMsterdam wrote:

mercure1 wrote:

I have no problem with Ben Smith getting money. When he came to AFKL he actually took a paycut, but was promised subsequent remuneration including ones based on performance targets.
Its important leadership is well compensated as good talent will be lost otherwise. Everything should be done to keep him on board during these critical junction.

I would have agreed with you if 2020 had been an ordinary year. But now with a global pandemic, airliners going bankrupt or getting saved with huge amounts of taxpayer money i don't agree with you. The man earns a lot of money already, and it would have been a very nice gesture if he would have said "Hey, I might have earned my bonus but because of the huge crisis we are facing I am saying no to it."

Besides that, (KLM) employees have had their profit share over 2019 postponed with a big chance it will be cancelled.
Great example of the big boss gets his, but everybody else can kiss it goodbye.

He already was massively unpopular on the Dutch side, I guess it will not improve quickly.

mercure1 wrote:

I have no problem with Ben Smith getting money. When he came to AFKL he actually took a paycut, but was promised subsequent remuneration including ones based on performance targets.
Its important leadership is well compensated as good talent will be lost otherwise. Everything should be done to keep him on board during these critical junction.

Losing 1,8 billion euros in the first quarter 2020 qualifies on performance targets ??? Shame on him !

kl838 wrote:

workhorse wrote:

kl838 wrote:

If the A340-300 is retired, what aircraft will AF operate to SXM? I know KL flies the A332, would AF do the same? AF schedules still have the A340 listed.

I guess it would either be the 787 or A330 given the lower demand due to COVID. When things pick up maybe even the A350?

Any thoughts?

The big factor with SXM is engine-out mountain clearance. The 340 did not have that problem since with 3 engines turning it was still quite capable to clear the mountains. The 777 cannot take off from there with the fuel needed to go straight to Europe and any reasonable payload. The 744 had to stop in CUR as well. The 330 and the 350, I don't know. I guess the 332 should be OK given its relatively high power-to-weight ratio.

Well KL used to fly nonstop between SXM and AMS with the A332 so we know for sure that will work. The only thing is that it will result in a decrease in seat count from 278 to either 208 to 224 seats. The closest match is the 789 with 279 seats. Given the current lack of demand, they would most probably want to downsize the aircraft size.

Currently booked on a flight back to London with AF in Aug from SXM - LHR, so it will be interesting to see what aircraft is deployed.

Forgive my going slightly OT but aside from AF/KLM how come we never saw any 767,787s from UK,German, Italian leisure carriers or even A332/3s? (TUI,MT,DE,Blu Panorama.Neos etc)?