Air France–KLM

Air France–KLM S.A., also known as Air France–KLM Group, is a Franco-Dutch airline holding company incorporated under French law with its headquarters at Charles de Gaulle Airport in Tremblay-en-France, near Paris. The group has offices in Montreuil, Seine-Saint-Denis, Paris, and in Amstelveen, Netherlands.[3][4] Air France–KLM is the result of the merger in 2004 between Air France and KLM. Both Air France and KLM are members of the SkyTeam airline alliance. The company's namesake airlines rely on two major hubs, Paris–Charles de Gaulle Airport and Amsterdam Airport Schiphol respectively. Air France–KLM Airlines transported 87.3 million passengers in 2014.

Air France-KLM S.A.
TypeSociété Anonyme
ISINFR001400J770
IndustryAviation
PredecessorAir France
KLM
Founded5 May 2004 (2004-05-05)
HeadquartersTremblay-en-France, France
Key people
Products
ServicesAirline services
RevenueIncrease €26.393 billion (2022)[2]
Increase €1.193 billion (2022)[2]
Increase €728 million (2022)[2]
Total assetsIncrease €32.305 billion (2022)[2]
Owners
Number of employees
74,602 (2022)[2]
Websitewww.airfranceklm.com

History

On 5 May 2004, Air France–KLM was created by the mutually agreed merger between Air France and Netherlands-based KLM. As a result of the deal, the French government's share of Air France was reduced from 54.4% (of the former Air France) to 44% (of the combined airline). Its share was subsequently reduced to 25%, and later to 17.6%. At the time of the merger in May 2004, Air France and KLM combined offered flights to 225 destinations in the world. In the year ending 21 March 2003, the two companies combined transported 66.3 million passengers.

In October 2005, Air France Cargo and KLM Cargo, the two freight subsidiaries of the group, merged their commercial activities. The Joint Cargo Management Team now operates the organisation worldwide from the Netherlands.

In a 2007 opening for a majority takeover of the loss-generating Alitalia, Air France–KLM was one of three bidders, and was favoured by the board of Alitalia.[5] However, on 2 April 2008, it was reported that negotiations have been abandoned.[6] After the acquisition of Alitalia and Air One by Compagnia Aerea Italiana on 12 December 2008, Air France–KLM was interested once again in purchasing a participation in the new merged company. On 12 January 2009, Air France–KLM bought a 25% share in this company for €323 million.[7]

In 2008, it was the largest airline company in the world in terms of total operating revenues, and also the largest in the world in terms of international passenger-kilometres.

Air France–KLM, along with its partner Delta Air Lines, were in talks about investing with Japan Airlines, which is part of the Oneworld alliance (rival to SkyTeam) but was experiencing financial problems. Air France–KLM, along with Delta and Delta's rival, American Airlines (AMR Corporation, part of Oneworld), discussed investments of $200–300 million to help the financially struggling carrier, which is Asia's largest airline by revenue. The Ministry of Land, Infrastructure, Transport and Tourism of Japan had recommended Air France–KLM and/or Delta for partners because of their "healthy" financial status, compared to AMR Corporation.[8][9] Delta was also recommended because of its extensive Asian network, acquired through the acquisition of Northwest Airlines. Korean Air, also a SkyTeam member, was also in talks with JAL. Air France, Alitalia, China Airlines, China Southern Airlines, Korean Air, and Vietnam Airlines are SkyTeam members that currently have code-sharing with JAL. On 7 February 2010 several news outlets reported that JAL decided to keep its alliance with American Airlines and end talks with Delta. According to reports, new JAL CEO Inamori and ETIC officials, decided that switching alliances (from Oneworld to SkyTeam) would be too risky and could hinder JAL's ability to turn around the airline quickly. On 9 February 2010, JAL officially announced their decision to strengthen its partnership with American, which included the joint application of antitrust immunity approval on transpacific routes. The airline also planned to fortify its relationship with other partners in the Oneworld alliance.[10]

In February 2011, Air France–KLM and Delta Air Lines were working together to examine a bid for Virgin Atlantic as Richard Branson had a 51 percent stake and the rest is held by Delta.[11]

In August 2011, Air France–KLM was categorized as one of World's 10 safest airlines.[12]

In December 2013, Air France–KLM sold its subsidiary CityJet to Intro Aviation.

In early April 2016, Alexandre de Juniac, Chairman and CEO since 1 July 2013 resigned and was replaced by Jean-Marc Janaillac on 4 July 2016.[13]

In January 2018 before the French Senate, Jean-Marc Janaillac reported for 2017 a higher revenue due to a rising fleet utilisation and a faster growth to come, and a better operating profit with 6% for the group (Air France 4%, KLM 9%) but lagging the 9% of Lufthansa and 10 to 12% of British Airways, while he deplored Paris-Charles de Gaulle luggage handling and safety waiting lines, obstructing connections, and anticipating a difficult 2018 with rising jet fuel prices and competition from Gulf carriers, Turkish Airlines, Chinese and Asian airlines, and low-cost carriers, either easyJet, Volotea, Ryanair or long haul.[14]

Delta and KLM aircraft at Schiphol

At the end of 2018 Air France–KLM will select its medium-haul fleet replacement for Air France, HOP!, KLM and Transavia, operating 120 Boeing 737 NG, 118 Airbus A320ceo family, 64 Embraer E-Jets, 25 Bombardier CRJ700 series and 13 Embraer 145. After renewing its long-haul fleet with the 787 Dreamliner and the A350 XWB from 2019, specifications will be released in the first trimester, seeking proposals from Airbus, Boeing, Bombardier Aerospace and Embraer, aiming for lower aircraft noise and biofuel usage.[14]

On 4 May 2018, Jean-Marc Janaillac announced that he will be resigning as CEO of Air France–KLM, after employees rejected new salary package.[15]

On 16 August 2018, the Board of Directors of Air France–KLM announced the appointment of Benjamin Smith as new CEO. He took up his duties at Air France–KLM on 30 September 2018.

On 26 February 2019, the Dutch government announced that it had "purchased 12.68 percent of shares in Air France-KLM" and "plans to build up its stake to around 14 percent".[16]

In May 2022, Air France–KLM signed a strategic partnership with CMA CGM to develop their air cargo capacities together. CMA CGM is the parent company of CMA CGM Air Cargo which was founded in 2021. As part of the agreement CMA CGM may also acquire a stake up to 9% in the Franco-Dutch airline group.[17]

On 12 July 2023, Air France-KLM announced a 10-for-1 reverse stock split and an ISIN change on 31. August 2023.[18]

Corporate affairs

In May 2010, Air France–KLM announced increased losses (€1.56 billion for the year to 31 March 2010), and warned that the 2010 eruptions of Eyjafjallajökull had caused a further €160 million loss in the current financial year. Air France–KLM is one of the largest airline companies in Europe, with 204.7 billion passenger-km in the year ending 31 March 2011.[19]

Private shareholders own 81.4% of the company with 37% held by former Air France shareholders and 21% held by former KLM shareholders. The Government of France owns the remaining 15.9%.

In June 2008, Air France–KLM agreed to pay $350 million to settle charges of cargo price fixing in an investigation conducted by the U.S. Justice Department. Cathay Pacific, Martinair Holland, and SAS Cargo Group also agreed to fines bringing the total to $504 million.[20] In November 2010, the European Commission fined Air France–KLM €310 million following another price-fixing investigation.[21]

The company spends about a third of its revenue on staff, its biggest expense, while Lufthansa only spends around a quarter, so to save around 800 million euros (app. 1.04 billion US$) annually over the next three years, the company will make a recruitment freeze which will lead to 2,000 job cuts in 2012.[22]

In February 2014, Air-France KLM invested $100 million in Brazilian airline Gol Linhas Aéreas Inteligentes in advance of the 2014 football World Cup.[23]

During 2015, Air France went through a severe business crisis and a pilot's strike, which made the French airline cut almost 3,000 jobs, KLM defer some of its pending 787 deliveries, KLM's cargo subsidiary Martinair to retire six McDonnell-Douglas MD-11 airplanes, and Air France–KLM to suffer as a company.[24]

Ownership

As of December 2022, the shareholding structure of the Group is:[25]

ShareholderInterest
Other investors44.25%
French State28.6%
Dutch State9.3%
CMA CGM9.0%
China Eastern Airlines4.7%
Delta Air Lines2.9%
First Employment Contract 1.2%
Treasury shares 0.05%

Head office

Air France–KLM's head office is located in the Roissypôle complex on the grounds of Charles de Gaulle Airport and in Tremblay-en-France, near Paris.[26][27][28][29] The 130,000 square metres (1,400,000 sq ft) complex was completed in December 1995. The French firm Groupement d'Etudes et de Méthodes d'Ordonnancement (GEMO) managed the project. The architect was Valode & Pistre and the design consultants were and Sechaud-Boyssut and Trouvin. The project amounted to a cost of 137,000,000 euros.[28]

Subsidiaries
Air France-KLM Group fleet size (wholly owned) - valid from May 2020
Air France–KLM

Wholly owned

Wholly owned subsidiaries of Air France–KLM include:

Until January 2017, Air France–KLM also fully owned Cobalt Ground Solutions the third largest ground handling company based at London Heathrow Airport. The company was formed on 1 April 2009 by merging the two ground services subsidiaries of Air France and KLM in the UK – formerly Air France Services Ltd (AFSL) and KLM Ground Services Ltd (KGS). Cobalt Ground Solutions was sold to Groupe CRIT, who purchased 100% of the company through its subsidiary Groupe Europe Handling.[31]

Air France Services Ltd (AFSL) was one of the major ground handling companies at Heathrow airport. AFSL was created on 15 January 1997 and was in the beginning a partnership between Air France and Servisair Ltd. Servisair then decided to pull out.

The group also owns Cygnific which is one of the biggest Sales & Service Centres of Air France–KLM. Cygnific is actually a full subsidiary of KLM Royal Dutch Airlines, operating as an independent company with its own business strategy, operational processes and human resources policy. Cygnific serves passengers and travel agents on behalf of KLM, Air France and Delta Air Lines.[32]

Minority interests

Airlines in which Air France–KLM owns a minority interest:

Former subsidiaries
  • Air France Asie
  • Cityjet: Air France–KLM used to own the entire company, until the sale to Intro Aviation, a German aviation holding company.
  • KLM alps
  • KLM exel
  • KLM uk
  • VLM Airlines: Air France–KLM merged the operations of this company with the ones from Cityjet. It was sold at the same time.
  • Joon: Air France–KLM merged the company back into Air France in June 2019[38]

References
  1. Sep 14; Massy-Beresford, 2018 Helen. "New CEO takes helm at Air France-KLM Sept. 17". atwonline.com.
  2. "Consolidated Financial Statements" (PDF). Air France-KLM. Retrieved 20 February 2020.
  3. "Contact Us Archived 10 April 2010 at the Wayback Machine." Air France–KLM ONE. Retrieved on 18 June 2010. "AIR FRANCE office, Paris Global Corporate Sales, JH.TS 30, avenue Léon Gaumont 75985 Paris Cedex 20 France" and "KLM office, Amsterdam KLM Headquarters Global Corporate Sales, AMS/SG Amsterdamseweg 55 1182 GP Amstelveen The Netherlands"
  4. "Montreuil et 6 secteurs Archived 16 May 2012 at the Wayback Machine." Montreuil, Seine-Saint-Denis. Retrieved on 18 June 2010.
  5. "Alitalia favors Air France–KLM bid." CNN. Friday 21 December 2007. Retrieved on 3 February 2010.
  6. "Alitalia boss quits as talks end." BBC. Wednesday 2 April 2008. Retrieved on 3 February 2010.
  7. "Air France seen beating tough odds for Alitalia." Reuters. Friday 2 January 2009. Retrieved on 3 February 2010.
  8. "Air France–KLM in talks to invest in JAL-source". Reuters. 15 September 2009. Retrieved 12 April 2012.
  9. "JAL alliance talks heat up with Air France–KLM entry". Reuters. 15 September 2009. Retrieved 12 April 2012.
  10. "Comments By American Airlines CEO Gerard Arpey on Japan Airlines Decision to Continue Membership in oneworld Alliance – 9 Feb 2010". Aa.mediaroom.com. 9 February 2010. Retrieved 12 April 2012.
  11. Air France, Delta to examine Virgin Atlantic bid, 20 February 2011, Reuters, retrieved 14 October 2017
  12. "World's Top 10 Safest Airlines Named". 30 August 2011. Archived from the original on 23 March 2012. Retrieved 3 September 2011.
  13. Mulier, Thomas, Air France-KLM Names Janaillac CEO and Chairman as of July 4, 24 June 2016, Bloomberg News, retrieved 14 October 2017
  14. "Air France-KLM prévoit de renouveler sa flotte moyen-courrier". L'Aérien (in French). 18 January 2018.
  15. "Air France-KLM CEO to resign after employees reject salary package". 4 May 2018.
  16. The Washington Post
  17. Bodell, Luke (19 May 2022). "Air France-KLM Partners With CMA CGM: What You Need To Know". Simple Flying. Retrieved 22 May 2022.
  18. "Air France-KLM reverse share split and share capital reduction | AIR FRANCE KLM". www.airfranceklm.com. Retrieved 8 September 2023.
  19. "Annual Report 2010-11" (PDF). Air France–KLM. Archived from the original (PDF) on 24 May 2012. Retrieved 15 November 2011.
  20. NPR: NPR News In Brief Archived 26 May 2008 at the Wayback Machine
  21. "Eleven airlines fined in European cargo cartel investigation". Archived from the original on 12 November 2010. Retrieved 10 November 2010.
  22. "Air France to cut 2,000 jobs: report". Reuters. 14 December 2011. Retrieved 15 December 2011.
  23. "Air France-KLM gains Brazil foothold with $100 million Gol deal". Reuters. 18 February 2014. Retrieved 20 February 2014.
  24. mrosemain, Mathieu Rosemain (5 October 2015). "Air France Workers Rip Shirts From Top Managers in Jobs Protest". Bloomberg.com. Retrieved 10 October 2016 – via www.bloomberg.com.
  25. "Air France-KLM announces the success of its €2.256 billion rights issue". AirFranceKLM Group. 14 June 2022. Retrieved 1 July 2022.
  26. "Legal Information Archived 1 August 2010 at the Wayback Machine." Air France–KLM. Retrieved on 3 February 2010.
  27. "Plan interactif Archived 13 December 2007 at the Wayback Machine." Tremblay-en-France. Retrieved on 20 September 2009.
  28. "AIR FRANCE HEAD QUARTERS – ROISSYPOLE Archived 11 July 2011 at the Wayback Machine." Groupement d'Etudes et de Méthodes d'Ordonnancement (GEMO). Retrieved on 20 September 2009.
  29. "Roissy Charles-de-Gaulle Archived 13 October 2010 at the Wayback Machine." Tremblay-en-France. Retrieved on 20 September 2009.
  30. "Transavia Frankrijk zo goed als Frans". upinthesky.nl. 20 February 2019. Retrieved 2 March 2019.
  31. "Group CRIT announces the acquisition of COBALT GROUND SOLUTIONS N°3 in ground handling services at London Heathrow".
  32. "Cygnific BV - YouTube". www.youtube.com. Retrieved 11 June 2021.
  33. "Air Côte d'Ivoire Airline Profile". centreforaviation.com. Retrieved 11 January 2020.
  34. "Air France-KLM S.A. Airline Group Profile | CAPA". centreforaviation.com. Retrieved 6 February 2023.
  35. "KENYA AIRWAYS PLC : Shareholders Board Members Managers and Company Profile". marketscreener.com. Retrieved 11 January 2020.
  36. "Royal Air Maroc - Gouvernance". Archived from the original on 27 June 2017. Retrieved 18 October 2018.
  37. "SAS reaches major milestone in SAS FORWARD – announces the winning consortium, including details of the transaction structure - SAS". www.sasgroup.net. Retrieved 3 October 2023.
  38. "Air France to conclude JOON brand in late-June 2019". Routesonline. Retrieved 11 January 2020.

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