OO-VEG
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AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 7:43 am

This morning several Dutch newssites opened with the news AF-KL are on the brink of technical bankrupcy and expect heavy lay-offs in employee numbers for mainly the Air France but also for KLM. We all know that the strike will hurt the company badly, as well as that they need to save costs to be able to compete with the LCC climate, but now the Dutch labor unions actually talk about the expectation of job-cuts.

KLM won't react untill wednesday when the figures are published. Definately something to look out for.
 
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seahawk
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 7:58 am

First of the line. LH will also go down this route. the legacies can not compete with the modern low cost carriers. They are dinosaurs waiting to go extinct.
 
OO-VEG
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 8:10 am

Quoting seahawk (Reply 1):
LH will also go down this route.
LH and KL both have a low-cost concept which is being incorporated though. LH is using Wings for everything not going to FRA/MUC and KL is embracing HV though they are much further behind then LH is.

Problem for KL and (LH as well probably) is that they feel the damage TK / EK are doing to them on the long haul business as well. So they have competition on both the luxury as the lcc front. I wonder how they will combine this into a working concept.

[Edited 2014-10-27 01:11:51]
 
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seahawk
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 8:27 am

And they have a workforce which is unwilling to do away some of their benefits to keep their jobs. It is not as if pilots at FR or U2 are not earning good money. Yet pilots at AF and LH insists on working under much better conditions, while passengers prefer the cheaper services of the low cost carriers.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 8:35 am

Quoting seahawk (Reply 3):
And they have a workforce which is unwilling to do away some of their benefits to keep their jobs. It is not as if pilots at FR or U2 are not earning good money. Yet pilots at AF and LH insists on working under much better conditions, while passengers prefer the cheaper services of the low cost carriers.

Sooner or later their pilots will have to realize their ME competitors are not competing on the same cost basis and if they want their employers and job security to survive, sacrifice will be necessary. Unfortunate, but this is what happens with a fractured EU that did not protect the aviation market more robustly.
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seahawk
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 8:39 am

If I look at the pilot´s unions in France and Germany, I expect that AF and LH will fall due to the pilots not giving in, with the pilots ending up flying for the ME3 or the European low Cos afterwards.
 
StTim
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 8:49 am

It will be interesting to see if France manage to get around EU rules again to support AF. They always seem to do it.

I think LH is a much better run airline although their unions seem to be spoiling for a fight.

BA went through this a while back - they managed to survive and recent numbers look more promising.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 8:50 am

Quoting seahawk (Reply 1):
the legacies can not compete with the modern low cost carriers.

Considering that (U)LCC pretty much fly you no-where, the need for legacies won´t go away unless the LCC introduce connecting traffic. Which will bust their business model, and even today not everything is green in LCC land.
Different for AF of course, Paris is a strong O&D market and hence interesting to LCCs, but who in his right mind wants to go to Frankfurt?

Quoting seahawk (Reply 1):
LH will also go down this route

Ever checked how many more passengers the LH group has today compared with a few years ago?

Quoting seahawk (Reply 3):
And they have a workforce which is unwilling to do away some of their benefits to keep their jobs

So, how much of your pay are you willing to sacrifice for your company because it doesn´t turn enough profit? My guess: zero

Quoting seahawk (Reply 3):
It is not as if pilots at FR or U2 are not earning good money.

Actually the differences between an LH and a U2 Pilot are not that big. Just wait until FR and U2 have Pilots with 30 years seniority on their payrole and then lets check again who has the expensive front row. LH, AF, KL and all the legacies can put their expensive crews on large aircraft, reducing the impact of their pay, the LCCs can´t.

Quoting seahawk (Reply 3):
while passengers prefer the cheaper services of the low cost carriers.

I actually have a hard time finding cheaper or better service on LCCs than on the legacies. And of course, unless you are living at a very large LCC hub, they don´t take you where you want, when you want. The world doesn´t consist out of people that can fly when and where Ryanair dares to fly today, most want to be at a specific location at a specific time and it is almost guaranteed that no LCC will fly there from where you are at the right time.

Air France and KLM have much more of a problem due to the relatively more centralized character of France and the Netherlands, but if i need to fly from Lyon to Bordeaux on Tuesday morning... no LCC is going to take me there. Air France will.

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SASMD82
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:05 am

Sorry guys, we can't work this way longer so this has to happen in order to remain competitve.

I have around 30 people in my direct surroundings who work for KLM (in various positions) and they live very nice lives.
They work pretty short days (usually around 6 or 7 hours a day), they have unbelievable working conditions and secondary benefits.
The salaries are great and they earn much more than similar functions.

Not that I am jealous but I really wonder why and when legacy carriers (their employees specifically) realise that Gulf Carriers and the low cost carriers
are a real danger to their jobs.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:06 am

Quoting tommy1808 (Reply 7):
but if i need to fly from Lyon to Bordeaux on Tuesday morning... no LCC is going to take me there. Air France will.

You would probably find a better option with TGV.
God forbid that you have to connect in CDG. I would not take that risk if I have luggage with me (without considering the risk to fly AF itself).
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Max Q
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:11 am

Easy to blame the Pilots and other employee groups, its a well established tradition in failing airlines.


Fact is it's very poor management that is to blame here. I'm sure KLM very much regrets getting involved, it would be better for them if they can re-establish independently.
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:13 am

Quoting tommy1808 (Reply 7):

Actually the differences between an LH and a U2 Pilot are not that big. Just wait until FR and U2 have Pilots with 30 years seniority on their payrole and then lets check again who has the expensive front row. LH, AF, KL and all the legacies can put their expensive crews on large aircraft, reducing the impact of their pay, the LCCs can´t.

It is not the pay, the secondary benefits are the problem.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:15 am

Quoting Aquila3 (Reply 9):

You would probably find a better option with TGV.

I don´t think 7+ hours on a train are a better option compared to a 1:10 flight. The example was picked badly, as Easyjet actually would fly me there. But so does Hop, with neglectable price difference, if any. And we all know that there will be plenty of city pairs with no direct connection.

Quoting Aquila3 (Reply 9):
God forbid that you have to connect in CDG.

Did that. For Europe: a nightmare, in comparison to transfer at an US airport arriving from abroad: a cakewalk.

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1400mph
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:18 am

Why doesn't Brussels give AF the 2 billion Euro's they're demanding from the UK exchequer ?

That should help ?
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:21 am

Quoting seahawk (Reply 11):
It is not the pay, the secondary benefits are the problem.

It is pretty easy to convert them into a monthly value. And what secondary benefits would that be? Days long longhaul trips away from home instead of sleeping in your own bed every night?
There is no way to compare a basically daytime mostly P2P shorthaul operation to a all trades network carrier. Different work loads, different pay. Just like someone with a 9 to 5 job at a desk will almost always earn less than a traveling manager with the same qualification.
It strikes me as pretty weird to expect people with different jobs to have the same pay just because they have the same basic entry qualification.

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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:24 am

Cutting pilot salaries will not make you survive against the state-owned arabic carriers.
The diffference in available money for each airline is much bigger than that.
Also working longer wont save them.
Its immposible to win against those airlines.
They will send 10 widebodies each of them to any city everyday if they could.
They sponser sports teams and events for billions a year.
There is no chance of survival if they can raise frequencies and fly out of europe to america.
No matter how much you cut on the costs of your work force.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:33 am

Quoting tommy1808 (Reply 12):

Yeah, the example was badly picked for me also, since there is no direct TGV between Lyon and Bordeaux.
I mean, that in general for intercity connections in France TGV is extremely competitive when considering overall trip times (and there is a direct connection). I belive for this France is really better that any other large country that I have seen, Germany included. This does not help the AF case, I guess.
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JU068
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:42 am

Can someone explain to me how British Airways manages to run a smooth business but airlines like Air France-KLM can't?
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:44 am

Quoting Max Q (Reply 10):
Easy to blame the Pilots and other employee groups, its a well established tradition in failing airlines.

I am not blaming the workers, but they make it hard for the big legacies to adjust to a constantly changing market. But then airlines also face a constant battle against problems thrown at them by politicians form taxes to allowing more frequencies for the ME3. Also the train networks are getting better and faster.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:48 am

Quoting Amsterdam (Reply 15):
Cutting pilot salaries will not make you survive against the state-owned arabic carriers.
The diffference in available money for each airline is much bigger than that.
Also working longer wont save them.
Its immposible to win against those airlines.
They will send 10 widebodies each of them to any city everyday if they could.
They sponser sports teams and events for billions a year.
There is no chance of survival if they can raise frequencies and fly out of europe to america.
No matter how much you cut on the costs of your work force.

Fuel is going to be a big topic, KLM is experimenting a lot on biofuel and finding ways of being less reliant on oil, but a real breakthrough could show an advantage for the airline.

What makes the Gulf carriers so rich though? Is it the fuelprice, or is there just a lot of private sponsoring involved?
 
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Aesma
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:53 am

Sources from Paris but not actually in the news in France, strange.
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76er
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:54 am

Quoting OO-VEG (Reply 19):
What makes the Gulf carriers so rich though? Is it the fuelprice, or is there just a lot of private sponsoring involved?

Well, no taxes, no trade unions, no nimby's, etcetc. Not sure about fuel, but I think they're paying market price like everyone else.
 
Pihero
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 9:56 am

Quoting Aquila3 (Reply 9):

Quoting tommy1808 (Reply 7):
but if i need to fly from Lyon to Bordeaux on Tuesday morning... no LCC is going to take me there. Air France will.

You would probably find a better option with TGV.

Just have a look at the respective reservation sites : AF /HOP ! have multiple flights between these cities, for flights of around 1 hour, against six or seven on the TGV ( no direct , have to go through Paris ).
... and the prices are quite comparable.
Wrong example !

Quoting tommy1808 (Reply 12):
I don´t think 7+ hours on a train are a better option compared to a 1:10 flight.

  

Quoting Amsterdam (Reply 15):
They will send 10 widebodies each of them to any city everyday if they could.

... but they can't. The ME airlines have very little to offer in terms of traffic rights... so not really possible to have more flights / more freedoms.

Quoting seahawk (Reply 5):

If I look at the pilot´s unions in France and Germany, I expect that AF and LH will fall due to the pilots not giving in,

Then you haven't read the news correctly. See the agreement on Transavia crewing... for instance...

Again the AF-KL doomsday thread, based on thin air ( Dutch newspapers seem to be breathing at an altitude much higher than the tropopause, I gather ).

News of AF-KL demise is, as usual, just wishful thinking and are quite baseless.
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1400mph
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 10:28 am

I said all along that AF and LH were over cooking it and basing future growth on forecasts that were way way too optimistic and totally oblivious to unfolding realities in Europe and the world.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 10:43 am

Quoting Aaron747 (Reply 4):
Sooner or later their pilots will have to realize their ME competitors are not competing on the same cost basis and if they want their employers and job security to survive, sacrifice will be necessary. Unfortunate, but this is what happens with a fractured EU that did not protect the aviation market more robustly.

I have to agree on this one. You can not have a free market with the Gulf States when the rules are not the same for everyone. It is time the ME3 were stopped from having a free ride in our European skies.
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 11:31 am

Quoting AIR MALTA (Reply 24):
. It is time the ME3 were stopped from having a free ride in our European skies.

They don't. They are bound by traffic rights etc. No free rides here.


Edit: Plus it's the ME2 not ME3 , AF and KL have extensive codeshares with EY.

[Edited 2014-10-27 04:32:53]
 
royaldutchgirl
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 11:44 am

Good job AF-KLM. Congratulations on destroying the Transavia Europe project and pouring 500 million euros down the drain during last month's unreasonable and arrogant strike at AF. Well done  
 
SCQ83
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 11:50 am

I think that AFKL has no future as it is.

You can blame low-costs, ME3 but isn't there something deeper underlying? French and Dutch way of managing things are very different; mixing them is a recipe for disaster IMO.

I can't think of any other European Group (LH, IAG, SAS...) with such an incompatible mix of business mentality.
 
fcogafa
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 11:59 am

Quoting SCQ83 (Reply 27):
I can't think of any other European Group (LH, IAG, SAS...) with such an incompatible mix of business mentality.

I would have said that UK and Spanish (IAG) are very different, but IAG seems to have managed to steer it towards the UK way of thinking.
 
kl911
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 11:59 am

Quoting SCQ83 (Reply 27):
You can blame low-costs, ME3 but isn't there something deeper underlying? French and Dutch way of managing things are very different; mixing them is a recipe for disaster IMO

Exactly. There are 4 ME carrier flights a day out of AMS, that's all. 2 EY flights are actually KL codeshares too. Ryanair doesnt even fly there yet. ( They will next year though.. )

It's time people stop blaming ME3 and LCC's ( LCC's have a total different clientbase anyway )
 
jumpjets
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:02 pm

Quoting JU068 (Reply 17):
Can someone explain to me how British Airways manages to run a smooth business but airlines like Air France-KLM can't?

If you wind back 3 -5 years you will see regular strikes at BA as the management did its best to cut its cost base etc - the same sort of things that LH and AF/KL are looking to do at the moment - it was long drawn out and painful for management, employees and passengers - but eventually a reasonable compromise seemed to have been reached and BA is much fitter for purpose than it was - a similar programme was undertaken at IB following its merger into IAG and again after some pain all round they are starting to reap the economic benefits.
 
SCQ83
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:04 pm

Quoting fcogafa (Reply 28):
I would have said that UK and Spanish (IAG) are very different, but IAG seems to have managed to steer it towards the UK way of thinking.

I knew someone would say that I don't think that is the case at all   Spanish managers (at least the newer generations, let's say under 50 y.o.) at large Spanish corporations are very on the Anglo Saxon orbit; most have studied, lived and worked in the US/UK. Similar for the Spanish conservative governments. Not the case with Netherlands-France, which are two different planets.

Of course IB staff did not agree with the changes (like the case today for AF), but I don't see that difference on the management and government like I see on AF-KLM.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:06 pm

Quoting tommy1808 (Reply 7):


Considering that (U)LCC pretty much fly you no-where, the need for legacies won´t go away unless the LCC introduce connecting traffic. Which will bust their business model, and even today not everything is green in LCC land.


Norwegian have connecting traffic.
 
OO-VEG
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:09 pm

Quoting kl911 (Reply 29):
Exactly. There are 4 ME carrier flights a day out of AMS, that's all. 2 EY flights are actually KL codeshares too. Ryanair doesnt even fly there yet. ( They will next year though.. )

EIN is not that far away and for most of the Dutch people a good alternative to AMS. Furthermore it's filled with FR/W6/HV flights. It will definately take some competition away.

However, I don't think KL is the big issue here, it will mainly be AF that's not doing well, and whilst they are 1 company KL will just have to take some of the beating AF had to endure.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:09 pm

Quoting kl911 (Reply 25):

I think is depends on how you define a free ride. They operate in an environment with little or no tax or labour laws. They employ staff in their prime years and when they are not required anymore they are sent away( Visa revoked). These employees usually return to their place of origin, which if it is an EEC country there will be a safety net for them. The ME 3 have made no contribution to these social costs.
The European legacy carriers have to support their staff and the whole social/political system through the various taxes and levies they have to pay. It is in no way a level playing field.
I am not saying that certain unions have not been unreasonable in my opinion they have. But,this is really a political thing, if the European politicians are happy with ME 3 destroying the long-haul aviation industry,as the Chinese have destroyed many industries. Then I guess there is little that needs to be done except watch the slow destruction of a proud industry, as we have with many other industries.
I don't blame the ME3 for this, they are playing their cards very well. It's the European politicians who allow them to. while making things even worst with restrictions on airport expansion, noise and environmental laws. Oh to be a fly on the wall in DXB or DOH, they can't believe how shortsighted and naive the competitions governments can be.
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:17 pm

Quoting kl911 (Reply 29):

It's time people stop blaming ME3 and LCC's ( LCC's have a total different clientbase anyway )

If you look at the success U2 or Vueling had when moving into major airports, I think the customer base is only defined by the airport served. Obviously FR´s old model of operating to small airports often a bit away from the destination is limited, but FR is now moving into major airports. CGN, AMS - just to name a few. We will see if the customer base will not overlap, once the same routes are served.
 
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:25 pm

Quoting seahawk (Reply 35):
If you look at the success U2 or Vueling had when moving into major airports, I think the customer base is only defined by the airport served. Obviously FR´s old model of operating to small airports often a bit away from the destination is limited, but FR is now moving into major airports. CGN, AMS - just to name a few. We will see if the customer base will not overlap, once the same routes are served.

It might hurt a bit, but don't forget that around 70% of KLM pax are transfer passengers. P2P flights in Europe shouldnt be a real thread.
 
lpdal
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:27 pm

I have to wonder if the MD-11 retirements had anything to do with this. And I'm always wondering why EU carriers such as LH, KL, and AF have been falling on hard times lately. The ME3 are great (except for QR for reasons I've stated before), but you can't take Middle Eastern carriers on IntraEuro legs.

I remember flying LH/SAS on FRA-CPH-FRA in July 2009 and despite the short length of both flights, I remember receiving a delicious cheese sandwich and a salad on the SAS MD-80 (this was before they removed C from the narrow bodies and shuttered the entire Maddog fleet). I don't see why they're doing so badly....

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Amsterdam
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:42 pm

Quoting LPDAL (Reply 37):

Their operations are based on premium seat sales.
They come in trouble when the premium seat sales demand goes down, like has happened in the last years for many european network airlines.

BA does not have this problem because of the incredible wealth in Londen, that keeps growing.
This is uncomparable with Paris or Amsterdam/Rotterdam.
And Germany has the strongest economy and many big companies and 80 million citizens for Lufthansa to work with.
So AFKL is worse positioned than those two.
Thats why the LH CEO said recently that he thinks only two full service european carries will survive.
He obviously means his LH, and BA.
 
steve6666
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:47 pm

Quoting cv990coronado (Reply 34):
But,this is really a political thing, if the European politicians are happy with ME 3 destroying the long-haul aviation industry,as the Chinese have destroyed many industries. Then I guess there is little that needs to be done except watch the slow destruction of a proud industry, as we have with many other industries.
I don't blame the ME3 for this, they are playing their cards very well. It's the European politicians who allow them to. while making things even worst with restrictions on airport expansion, noise and environmental laws. Oh to be a fly on the wall in DXB or DOH, they can't believe how shortsighted and naive the competitions governments can be.

I agree with you completely. The ME3 I guess have to be very careful that they don't antagonise European governments, or the competing European legacies too much, as they could be well and truly stuffed with more restrictive traffic rights. How many flights is it EK has to London each day? Something like 5xA388 to LHR and another 3 to LGW? How funny would it be if their entire UK operation were restricted to the number of frequencies BA and VS have to DXB (about 4 in winter I think)? I'm surprised to an extent the European legacies have not already combined to lobby governments to bring this about.
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Amsterdam
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 12:53 pm

Quoting steve6666 (Reply 39):
I'm surprised to an extent the European legacies have not already combined to lobby governments to bring this about.

Nothing to be surprised about.
The arabic carriers will not buy so many airbus aircraft if they are not allowed to fly them to european cities also.
The governments of all these countries have approved the sales of airbus aircraft to the arabs to fly them too europe as well.
Its not complicated at all.
 
tommy1808
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 1:08 pm

Quoting kiwirob (Reply 32):
Norwegian have connecting traffic.

And are not cheap on connecting flights at all. In fact you will have a hard time finding a Norwegian long haul flight that isn´t more expansive or same price at best as one of the legacies.... and that is if you find a flight at all, since the most often displayed message on their website seems to be "no flight this day". Its pretty frustrating to even find anything for comparing purposes. As in flight search machines i can not recall them ever coming up.

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kl911
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Joined: Mon Jul 21, 2003 1:10 am

RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 1:09 pm

Quoting steve6666 (Reply 39):
How many flights is it EK has to London each day? Something like 5xA388 to LHR and another 3 to LGW?

And?? BA is doing fine. Do you also complain about Chineses carriers having 10x daily flights to London, or US carriers with tons of flights to the states from London?

Like I said, the 2x EK flights to AMS are nothing compared to KLM's vast network, of which 70% are transfer pax. EY is even a strategic partner incl extensive codeshares. Same goes for AF.
 
luv2fly
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Joined: Tue May 13, 2003 2:57 am

RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 1:43 pm

Would be surprised if any person picked an airline based on sports sponsorship!
You can cut the irony with a knife
 
1400mph
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 1:47 pm

You can't blame the ME3 for doing precisely what the European legacies have done for years in the transit traffic market. The fact that they do it with state money I'm afraid is our disadvantage and one we just have to accept. It has always stuck in my craw but there it is.

The U.S didn't put curbs on the amount of traffic European carriers could target pre joint ventures etc. How could BA for example complain about EK when you look at their North American transit operations ? I know they have or had (?) that government travel policy thing but hey good for them. Whether they would have grumbled if European carriers were state owned is a question I can't answer ?

Years ago I was saying how I couldn't understand why the American legacies were so ..well...umm...sh*t...when they had so much going for them. Then hey presto DL gets its head out of its ass and look at them now !!! AA isn't far behind.

I sound like I'm bashing which isn't my intention but I find it astonishing that LH and AF have been so relatively slow in responding. They must have seen what was happening to BA over TEN years a go and thought 'Christ we better get our houses in order fast before its our turn'.......?
 
alfa164
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Joined: Sat Oct 06, 2012 2:47 am

RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 1:57 pm

Quoting seahawk (Reply 18):
I am not blaming the workers, but they make it hard for the big legacies to adjust to a constantly changing market. But then airlines also face a constant battle against problems thrown at them by politicians form taxes to allowing more frequencies for the ME3. Also the train networks are getting better and faster.

The constant strikes by various employee groups (and, in the case of Air France, local and national infrastructure work groups) continue to drive many passengers to other options. It is one thing for the employees to demand benefits that make it difficult for these airlines to make a profit; it is quite another thing to take actions that purposely drive passengers to other carriers.

Quoting cv990coronado (Reply 34):


I think is depends on how you define a free ride. They operate in an environment with little or no tax or labour laws. They employ staff in their prime years and when they are not required anymore they are sent away( Visa revoked). These employees usually return to their place of origin, which if it is an EEC country there will be a safety net for them. The ME 3 have made no contribution to these social costs.
The European legacy carriers have to support their staff and the whole social/political system through the various taxes and levies they have to pay. It is in no way a level playing field.

  
I'm going to have a smokin' hot body again!
I have decided to be cremated....
 
jumpjets
Posts: 1427
Joined: Tue Apr 10, 2012 2:17 pm

RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 3:22 pm

Quoting Amsterdam (Reply 38):
BA does not have this problem because of the incredible wealth in Londen, that keeps growing.
This is uncomparable with Paris or Amsterdam/Rotterdam

I would dispute the first part of that statement - during the depths of the Banking crisis LON and NYC both felt squeeze heavily - and BA recorded losses of £400m and £531m [before tax] in 2009 and 2010 - primarily I would say because the premium traveller stayed at home and didn't travel back and forth across the Atlantic.

I would suggest that if anything BAs exposure to the North Atlantic market makes it more exposed to downturns in the financial markets than AF/KL and to an extent LH.
 
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EPA001
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Joined: Tue Sep 12, 2006 8:13 pm

RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 3:24 pm

Quoting OO-VEG (Thread starter):

This morning several Dutch newssites opened with the news AF-KL are on the brink of technical bankrupcy and expect heavy lay-offs in employee numbers for mainly the Air France but also for KLM.

KLM has stated that the newspaper report is incorrect.

See: http://www.luchtvaartnieuws.nl/nieuw...t-berichtgeving-over-massa-ontslag (in Dutch only).
 
kl838
Posts: 176
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RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 3:33 pm

I am sorry but this is all just over the top journalism, everyone wants AF-KL to fail, and I don't know why. I remember reading that they still have a billion or so in cash (not sure how accurate that is). Either way on the 29 of October their Q3 results would be released, and we should have a clearer picture. KLM has been largely profitable as usual and AF hasn't. As far as I know they even still have their credit lines, so I want to know what do they mean on the verge of technical bankruptcy. The group has been actively reducing debt over the years according to their financial reports from 2013.

We all know the Medium/short haul network is the biggest issue, and even Transavia France making a loss from what I can tell in their 2013 reports. What I don't understand is why does Hop! operate 3 different families of aircraft, I would have thought the group would have reduced the number of types, therefore leading to cost advantages in crew training, maintenance etc.

Brit Air operates the CRJ 100, 700, 1000,
Regional operates EMB190, EMB170, EMB145-EP/MP, and EMB135-ER
Airlinair operates the ATR72-500, ATR72-200, ATR42-500 4, and ATR42-300

I don't understand why can't they just operate the Embraer aircraft for both Brit Air and Regional and they will have fleet commonality with KLM city hopper. I also don't understand the need for three brands under Hop! Can anyone explain this to me? Why can't they all just be Hop! by Air France, and not Hop operated by Airlinair etc?

The unions would need to realise that time have changed and group needs to be more nimble with similar labour costs as other European airlines, otherwise they will be out of a job. There is only so much an airline can cut in terms of costs, but the two biggest ones would continue to be fuel and labour.

[Edited 2014-10-27 08:35:53]
 
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seahawk
Posts: 8704
Joined: Fri May 27, 2005 1:29 am

RE: AF-KL - News Reports Drastic Actions To Survive

Mon Oct 27, 2014 4:11 pm

Quoting kl911 (Reply 36):
It might hurt a bit, but don't forget that around 70% of KLM pax are transfer passengers. P2P flights in Europe shouldnt be a real thread.

But the big scary question is: Do they fly KLM because they wanted to fly KLM, or because it was the cheapest connection offering a reasonable travel time. Recent market research show, that the ME3 are able to achieve market recognition with an above average number of people preferring them over other airlines. While for many European airlines, it does not matter for the passenger which airline they fly.

Sorry for the Link in German:

http://www.airliners.de/fluggesellschaften-kundensicht/33960

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