Air France-KLM’s Profitable Dutch Arm Seeks Cuts Suggestions
Published on Nov 30 2014 2:12 PM in General Industry
Air France-KLM Group’s Dutch unit asked employees to suggest ways of shaving €700 million from costs over five years to cover the expense of wide-body jet upgrades and other service enhancements.
Pieter Elbers, KLM’s new chief executive officer, briefed 500 workers including managers, cabin crew and ground staff on the need to fund €550 million of spending on new seats for 15 Boeing Co. 777-200 planes, an expanded Amsterdam business lounge and issuing flight attendants with Apple Inc. iPhones.
“The idea was to underline a sense of urgency,” said KLM spokesman Joost Ruempol, who attended the meeting at a hotel near the airline’s Amsterdam Schiphol airport hub. “We’re looking to make the company more efficient and asking all employees to think with us on what we can do.”
While KLM is seeking savings, the Dutch unit is already leaner than Air France, posting a profit last year even as shortfalls at its Paris-base sister airline pushed the group to an overall loss. Talks with five pilot, cabin crew and ground staff unions will take place 18 and 19 Dec., with no decisions yet made on whether to seek job cuts, Ruempol said.
Elbers, a 20-year KLM veteran, became CEO last month, replacing Camiel Eurlings, who left with immediate effect even though his contract wasn’t due to expire until next April.
While Air France has been weighed down by unprofitable domestic and regional routes, KLM is focused on international transfer traffic. Schiphol was Europe’s fourth-busiest airport last year even though the Amsterdam urban area’s population ranks only 19th in western Europe, according to European Union data. The hub pulls in traffic from across northern Europe, where economies are stronger.
Bloomberg News, edited by Hospitality Ireland