“United we stand, divided we lose”
8th of May 2018
Current situation at Air France-KLM (AFKL) is drawing a lot of attention in the Dutch media. It is resulting in questions, speculations, anxiety and, above all, concerns among many KLM colleagues.
I share these concerns and I am in close contact with all parties involved – AFKL, AF, KLM Supervisory Board, works council, Dutch government, and trade unions. How do I view the current situation?
The origins of this turbulence
Developments in recent weeks have created serious turbulence for AFKL. So far, the Air France strikes (15 days between 22 February and 8 May) costed Air France over EUR 300 million. During the recent consultation, the majority of the Air France staff has rejected the management’s salary proposal.
Air France-KLM’s President and CEO Jean-Marc Janaillac has stated prior to the consultation to draw personal consequences in the case of a negative outcome and to return his mandate back to the board.
That AFKL board is now working on a interim governance solution. A very regrettable situation.
A changing world – Adapt or die
Low Cost Carriers, Gulf carriers, and digitisation have caused radical and irreversible changes in the aviation industry. Hence companies with a long history, such as Air France and KLM, have to adapt sharply. If we don’t, we simply won’t survive. This is not a one-off challenge though, it is a continuous process to adapt our companies to this rapidly changing world.
Strong together – If you’re not at the table, you’re on the menu
Consolidation, by combination and integration of airlines, creates aviation giants around the globe. It started in the US but is a common fact in Europe now too. Such consolidation ensures the necessary economies of scale for IT, purchasing, and fleet. It also ensures the network size and market position which our customers and partners require.
In 2004, KLM merged with Air France to form Air France-KLM. At the time, we were a frontrunner in Europe. This combination was born from a vision on consolidation and from a strong belief in the strength and power of the combination of the two companies. A belief which still stands for me!
The combination with Air France has certainly done KLM well over the past 14 years.
Air France-KLM has managed to grow, achieved economies of scale, broadened its customer base, and developed further and deeper partnerships with great companies such as Delta Airlines.
KLM has been able to participate and benefit from the combination. In short, by being at the forefront of consolidation and anticipating change, KLM has been able to continue to play a meaningful role on the world stage, as part of the Air France-KLM group.
For better and for worse
The first Air France-KLM years (2004-2008) were a success in various aspects; both financially and for our customers. Thereafter the financial crisis came and results plummeted. Since 2013, both companies have been successfully working on their recovery. KLM managed this it a bit earlier, but since 2015, Air France has also been writing positive results.
But that doesn’t mean we are “finished” yet. In fact, our next challenge, after years of stagnation and shrinkage was/is to achieve profitable growth. That’s a challenge indeed, it requires sacrifices, adaptions, innovation and probably most of all, it calls for mutual understanding and internal dialogue.
After all, our employees create that change, the adaptation, and the customer experience. Looking at 2017, both Air France and KLM succeeded in improving results year-over-year. That was not easy and all colleagues at Air France and KLM deserve a big compliment for that.
Stay the course for KLM
At KLM we managed to make progress together between 2015 and 2018, sometimes with tension. Together, we successfully managed to execute our plans of “cost savings on the one hand and investments on the other hand”. I’m very proud that we have been able to do this together. Even though, we sometimes had to overcome our problems and difficulties and had to deal with the delicate and complex balance “between execution and dialogue” and “between understanding and determination”
The AFKL group is in much better shape now than a few years ago.
KLM is in a much better shape too and we’re well on track. Next year we will turn 100 and, together, we are working hard, day in-day out, to reach our 100th birthday fit and healthy. Therefore, we have to stay the course, stick to our strategy, our plans, our initiatives and mostly our team spirit.
Strikes and responsibility
Like KLM, at Air France discussions and dialogue are taking place on the required change, adaptation, and a shared ambition to create a healthy future for the company and its staff. And, similarly at Air France, it is at times difficult and it asks a lot of everyone concerned.
The right to strike is a right by law, and laid down in the constitution. It’s both meaningful and to be respected. However it implies great responsibility too, namely one of proportionality; the end does not justify means. The current series of strikes has gone too far and is causing our company a great deal of damage at every level – not only for Air France but for the entire AFKL Group.
It is having a disastrous impact on 1) customer appreciation, 2) finances, 3) our reputation and – ultimately- 4) our internal cohesion. Despite the tremendous efforts of our AFKL colleagues around the globe, thousands of our customers have been impacted by these recent strikes. These customers place their trust in us and, ultimately, they are the ones who “pay our bills”.
Next to employing ten thousands of people, Air France and KLM also play an incredibly important role in the respective economies and development of France and the Netherlands. That is why concerns about Air France and/or KLM are receiving a lot of attention from the public and media.
There’s no shine without friction
Building a newly created group with different cultures, languages, habits, and insights often generates a lot of positive energy and creates real enrichment. But not always. Sometimes we have to find the right way to progress, and determine how we will together explore and shape our story of European aviation consolidation. We are not reading the book of consolidation, we are writing it!
Also myself, I have had in the past years, admittedly, occasionally challenging discussions with my colleagues in France on for example organisational structures. What is relevant though, is that we managed to pull through, bridged our differences and came up with solutions.
So, at times it’s a complex balancing act of KLM interests within the context of the AFKL Group and with the faith in the combined strength of Air France and KLM together.
TOGETHER – United we stand, divided we lose
Many KLM colleagues have approached me over the past few days and shared their feelings.
I do have understanding for the concerns you might have. I share these.
I do have understanding for the anger you might have. I might share that too.
I even understand some speculations about the future.
Today, however, AF is having a hard time; difficulties with its social relations, difficulties with strikes and difficulties with the leadership change at hand.
So, what should we do here at KLM?
Do we wait ?
Or do we turn our heads?
Or.. should we extend our hand? A hand of connection and a hand of unity and solidarity especially now in difficult times. Let us reach out to our colleagues at Air France – whether physically or symbolically – and demonstrate that we were, are, and will continue to be, the first European Airline group.
So, what I am asking of all of us at KLM
Keep calm and positive;
Keep your confidence in our company;
Keep focus on implementing and executing our KLM strategy and plans;
Take good care of our customers and of each other; and
keep working together !