N°81, october 7, 2019  
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Gelukkige verjaardag KLM ... Happy Birthdays KLM ... Bon anniversaire KLM !

> A century KLM

(source KLM) october 7, 2019 - In 1919, KLM Royal Dutch Airlines was founded. KLM is, therefore, the oldest airline in the world still operating under its original name (...).

7 October 1919 ‘Royal Dutch Airlines for the Netherlands and Colonies’
Establishment of the ‘Royal Dutch Airlines for the Netherlands and Colonies’ as it was then called. The founders are a group of investors who asked Albert Plesman to take over the daily supervision of the business. Plesman would later be named Director of KLM.

17 May 1920 The first flight of KLM The first KLM flight.
Pilot Jerry Shaw flies the leased DeHavilland DH-16 from London to Schiphol. On board are two journalists, a letter from the Mayor of London to his counterpart in Amsterdam and a stack of newspapers.

1935 The introduction of cabin crew on board.
The first cabin crew were all male, the ‘Stewards’; shortly after followed a group of ladies, the ‘Stewardesses’. The cabin personnel replaced the on board engineers; up until that point, alongside their technical duties, the passenger care was the engineer’s responsibility. The most important task of the cabin personnel was the safety on board and that is still the case.

21 May 1946 Amsterdam - New York
The start of the service between Amsterdam and New York with ‘Rotterdam’ a Douglas DC-4. KLM is the first airline to connect mainland Europe to America and the service is the start of KLMs network in the west. The KLM trans-Atlantic network is still of great importance.

1 April 1958 The introduction of Economy Class.
Although it is a little more basic than Tourist class, KLM makes every effort to keep the level of service as high as possible. The new economy class makes air travel more affordable and the number of passengers increases by 27% in three months.

25 March 1960 The introduction of the Jet engine era
The PH-DCA ‘Albert Plesman’ lands at Schiphol marking the start of the Jet engine era at KLM. The Douglas DC-8 aircraft has 4 jet engines making the flight time much shorter and reducing the number of stops required. From this point on, flights no longer take days, but hours. The new aircraft could fly to New York in half the time.

28 April 1967 Schiphol Centre as the new homebase.
With advice from former Station Chief Jan Dellaert, Schiphol was developed so that aircraft could land in strong winds from all directions.

16 October 1975 The addition of the first Boeing 747-306B Combi to the fleet
This is the only aircraft that transports both passengers and cargo. The possibilities that this aircraft brings increase KLM’s flexibility and strengthens her position in the market.

December 1991 Introduction of the loyalty programme
On Mainland Europe, KLM is the first airline to introduce a loyalty programme for customers, ‘Flying Dutchman’. This programme is renamed ‘Flying Blue’ in 2005.

March 1994 World Business Class
KLM and Northwest airlines introduce the ‘World Business Class’ a new class aimed at the business traveller on intercontinental flights. The WBC offers a level of comfort in between that of economy class and Royal Class.

29 June 1996 The first KLM flight to Beijing.
This is the first step in a growing number of destinations within China and a growing collaboration with Chinese airlines. From this moment China becomes one of the most important destinations for KLM.

5 May 2004 Foundation of AIR FRANCE-KLM
On this day the fusion on the two airlines becomes official. 7 months earlier in September 2003, the airlines decided to combine their strengths.

25 August 2005 Introduction Airbus A330
Airbus deliver the first A330 to KLM. This aircraft replaces the B767 which is slowly being phased out of the fleet.

30 June 2011 The first flight to Paris on BioFuel
In 2007, together with a number of partners, KLM starts searching for alternatives for fossil fuel. A number of alternatives are investigated including BioFuel made from Algae, cameline (a plant), jathropa oil (a nut) and finally used frying fat. One of the conditions of using this fuel is that it won't negatively affect the food chain or have any adverse effects on the environment

My comment: 100 years ago to the day, KLM was created. It is an integral part of the Dutch heritage.

You will find above the different stages that have marked its history.

> KLM is solid as a rock

(source De Telegraaf) october 7, 2019 - The KLM brand is solid as a rock and can last another hundred years. That is the message from CEO Pieter Elbers, who, unyielding and with a blue heart, leads the airline. KLM is the oldest airline which still operates under its original name. “It is forgotten sometimes, but it is very special what we have here in the Netherlands.” (...)

“The company is doing significantly better than five years ago, we have a higher customer satisfaction rating and a better financial position. The substantial investments and staff efforts have borne fruit,” says Elbers. He is glad that the centenary is being celebrated in good health. “I am enormously proud of that, but you should always keep looking ahead. Results from the past are no guarantee for the future.” (...)

Still, environmental pollution has suddenly become a big topic in aviation. KLM has gotten the message and gained worldwide attention with a recent call to fly responsibly, meaning think before you fly. “KLM, and I personally as well, take this very seriously,” Elbers says when asked. With this initiative in the area of sustainability KLM is the first in the aviation industry. (...)

The sustainability agenda will become important at KLM in the next ten years. Elbers points out that changes sometimes need time. “We are investing in a plant for biofuel, which will only be operational in 2022. We are seriously working on CO2 compensation, we are investing billions in new aircraft, but we do need to maintain our earning capacity. That is why I have hope for some room in our network to grow further. This growth is necessary to maintain our position on the world stage. The world will not wait for KLM or the Dutch polders. We have to pull out all the stops and grab our chances,” says Elbers. (...)

“We have been able to operate with passion and to pioneer for a hundred years, so I have full confidence that there is enough knowledge and expertise to continue that. We are not entitled to something, we have to earn it. Every day again.”

> Peter Hartman: ‘Without Air France, KLM would have been considerably smaller’

(source Zakenreis Magazine) april 21, 2019 - Between April 2007 and July 2013 Hartman was the highest in command at the airline. (...)

From the beginning, you were involved as a board member in the negotiations with Air France. What were the considerations regarding a potential collaboration with the French?
“At the start of this century, KLM wasn’t in a good place, with a shortage of cash and a shrinking network. (...)

With the British their motto was: Our way is the right one. The manner in which British Airways wanted to shuffle the two companies together, meant that KLM would become a feeder to London. In all likelihood we would have lost the brand name KLM very quickly. (...)

Lufthansa also wasn’t an option, because that cooperation would not be approved by the European Commission as we would have too much domination within our region. (...)

Then Air France came into view. The attitude of the French was much more comfortable. They were chauvinistic, but in a very different way than the British, who were flat-out arrogant. Jean-Cyril Spinetta, the CEO of Air France at the time, didn’t force us to do things his way. ‘We’re going to do it both of our ways, then you’re strong both ways,’ he said. Spinetta was a sensible visionary. He was, in part due to his personality, also always willing to listen to us. So a holding was founded, with two subsidiaries and three divisions under that: passengers, cargo and technical maintenance. (...)

Spinetta said during the negotiations: ‘I want the four of us to continue.’ He meant himself, his COO Pierre-Henri Gourgeon, Leo van Wijk and myself. He knew very well that at a moment like that, headhunters are at the ready to take you away. Spinetta insisted on continuity and commitment. ‘I’m counting on you,’ he said. He wanted the guarantee that we would make the first big steps together. And that’s what happened.” . (...)

Did the French call the shots after 2004?
“People who know me, know that I’m not the type to let that happen. And it didn’t happen. Of course we had heated discussions, but not via the media. In our top team with Jean-Cyril Spinetta, we had sufficient opportunities to carry out our joint strategy. The interests of both airlines and hubs were always considered in this. The current idea in the Netherlands that Air France-KLM was only governed by the French is wrong. From the beginning, Dutch people, so from KLM, have always been involved in discussions and decisions in Paris, at the highest level. Look at Michael Wisbrun, who did cargo for Air France-KLM, and Pieter Bootsma, who is still responsible for the network of the whole group, among other things, including alliances. Also with the maintenance division a lot has been accomplished. Ton Dortmans played an important role there. And let’s not forget Frédéric Gagey, who is now CFO of the group, but held the same position for many years as KLM’s financial man.”. (...)

Van Wijk, and later I myself, were vice chairman of the group and in this position, we got enough room to contribute. If you had a good business plan, you could always convince Air France. (...) Of course the chauvinism sometimes came out, on both sides. (...) During this period, we managed to increase KLM’s revenue from EUR 6 billion to EUR 10 billion. KLM always did better than Air France when it came to profitability and all based on a dual brand strategy.”

In what way did KLM benefit from the merger?
“KLM has been able to expand for all those years thanks to Air France – not despite. KLM has gained an incredible number of long-haul destinations, also destinations we would have had to give up as an independent carrier. We were able to retain our brand and now KLM is able to reach its centennial under its own name this year. That’s a huge achievement. (...)

The Dutch contribution at shareholder level was very small after the merger. Didn’t that worry you?
“Yes, it did. That’s why in 2012, I looked at a joint stake in Air France-KLM with a large group of private investors. (...)

I initially took the plan to the then Finance minister Jan Kees de Jager, to ask him what he thought about it. (...)
 within the group, for financing large investments. And what could they have against private Dutch investors? It was better than the Brits, who also did a lot of investing at the time.

But what happened? The cabinet fell. A new government was formed, Rutte II, with Jeroen Dijsselbloem as minister of Finance. So I went to minster Dijsselbloem, but he clearly wasn’t up for it. Then the whole plan disappeared into a desk drawer. A missed opportunity.”

Until recently anyway, because now there is a large Dutch stake, of 14%.
“The situation is completely different now, because it was the Dutch government that bought shares and not private investors. The Dutch government says that the position of Schiphol would be in danger if no investment was made in the holding. I don’t understand that argument. Schiphol’s position has only become stronger since the merger of KLM and Air France. More than 70% of the activities comes from the Air France-KLM group with its SkyTeam partners.”
I thought Dutch shareholders were very necessary, but private ones, not the government. As the Dutch government, you can’t urge the French government to get out of Air France-KLM, and then secretly purchase a stake yourself. (...)

The Dutch government says that they weren’t being involved enough in important decisions for Air France-KLM. For example, the cabinet wasn’t consulted about the strategic collaboration with Delta Air Lines and China Eastern Airlines in 2017.
“Maybe not consulted, but I do think the government knew about it. At the time, there were four Dutch representatives on the board, one of which on behalf of the Dutch government, Jaap de Hoop Scheffer. Even I knew about those plans, even though I was less involved in them. After all, I left the board of Air France-KLM in May 2017.”. (...)

When it comes to the whole Air France-KLM dossier, I think a kind of Brexit emotion has arisen in the Netherlands. Half-truths have been told in the media, which were very anti-French. The complete picture was hardly shown anywhere anymore, I missed the nuance. It’s a pity that it’s been taken out of context so much sometimes. Our French colleagues, but definitely also our KLM colleagues at group level, absolutely didn’t deserve this. Hopefully, the new supervisory board of KLM will bring back the peace. The enemy is outside, not within the group. I’d like to conclude by saying: count your blessings once in a while. We have a strong group with strong partners. We can be proud of that.” . (...)

My comment: The merger between Air France and KLM was managed by four people: two within Air France (Jean-Cyril Spinetta and Pierre-Henri Gourgeon) and two within KLM (Leo Van Wijk and Peter Hartman).

Last spring, at the height of the governance crisis, Jean-Cyril Spinetta and Peter Hartman spoke in the media. Both had insisted on recalling how much Air France and KLM had benefited from the merger in 2004.

  Jean-Cyril Spinetta et Leo Van Wijk - september 30, 2003

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Administrateur Air France-KLM représentant les salariés actionnaires PS et PNC

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