I didn' realize KLM was in bad shape in 2004, thank you for sharing that. The Dutch media seem to conveniently forget that fact, and are focussed on AF's strikes, scenario's of AF trying to 'steal' KL's profits and Ben Smith trying to 'seize' control.
People do seem to have very short memories.
In 1996, AF was the 3rd biggest airline in Europe with a 13,2% market share (after BA at #1 and LH at #1) with KL sitting just behind at 11,3%
In 2003, the year of the so-called merger (which actually was an acquisition of KL by AF) AF was #1 in Europe with a 17% market share (with LH then at #2 and BA at #3) while KL had fallen to a 9,6% market share.
In 2001, when most airlines were burning cash, AF posted a net profit of 421 million Euros.
In 2003, AF paid 784 millions Euros to acquire KL, which at the time was 40% over KL's stock value. In fact, on the day the merger was announced, KL's stock when up 12,54% while AF went down 4,16%. KL was loss making and had just been through 2 failed turn around plans.
At the time, AF and KL really complimented each other : AF relied heavily on its domestic market which accounted for 40% of its capacity and was pretty much a point to point airline with "just" 40% of it's passenger in CDG connecting onward while KL was obviously more of an international airline with 60% of its passengers connecting in AMS. AF was very strong in West Africa and South America but weak in Asia with was KL's strongpoint together with East Africa.
Both also had very strong ties with DL & NW who ended up merging themselves.
In 2003, when the 2 airlines merged (although as I said it was more of a takeover, AFKL initially being 81% French owned and 19% Dutch owned with the French government owning 54% of the whole company) it created the biggest airline in the world in terme of revenue (with 20 B$ - AF as a standalone carrier was #6), 2nd biggest (passenger) cargo airline and 3rd biggest airline in terms of passengers carried. The merger also made ST the #1 alliance in terms of passengers carried with a 21% market share.
By 2007, AFKL revenue soared 30% and they became the most profitable airline in the world, posting a 1,2B$ profit this year. In just 3 years, they had achieved a 1/2B$ cost cutting program by cutting overlaping back office positions. Everyone was raving about what a success the whole thing was and it started a phase of much needed consolidation in Europe.
By 2009, things started to go South, with what used to be AF's biggest asset, it's domestic network, becoming a liability, especially with U2's momentum (which AF felt pretty hard on its 2 cash cows, namely Paris-Toulouse and Paris-Nice where they didn't have to compete with the TGV). When U2 entered the Paris-Marseille market (before redrawing), they ended what was the biggest monopoly market in the world (with about 30 daily AF flights each way). It's also interesting to note that AF was then the biggest operator at LCY, thru WX, which while prestigious, ended up costing them a lot of money (in 2010, AF lost 50 millions Euros just on its LCY network).
One last thing, as I said, in 2001, AF was one of the most profitable airlines in the world...when they were literally on the verge of collaps just 3 years prior in 1998. They had already flirted with bankruptcy in 1993 before that.
One of the reason why KL is now so successful (altho people also forget that KL posted a net loss in 2017 and that while TO has been profitable for the past few years, the same cannot be said for its Dutch counterpart HV, so much so that HV's shares in TO were transferred to AF a few years ago) is because most of AFKL long haul growth has been directed over at AMS in order to avoid French unions and French tax laws. In fact about 40% of France's CAC40 companies maintain subsidiaries of some sorts in The Netherlands. So much so that just last week after announcing that no French companies maintaining subsidiaries in tax heavens would be eligible for State aid, the measure was withdrawn because the Government realized it would de facto eliminate most of the biggest French companies, including AF since the NL are indeed a tax heaven (as is Ireland. Altho by law, no European territory can be qualified as a tax heaven the gvt still worried their aid package would be challenged in court).
Anyway, it's always good to have a little bit of context. I for one, wish AFKL the best, as I am a strong believer in stronger together.