Air France–KLM

Air France-KLM S.A.

Type	Société anonyme
Traded as	Euronext: AF OTCQX: AFLYY
Industry	Aviation
Founded	2004
Headquarters	Roissypôle Paris–Charles de Gaulle Airport Tremblay-en-France, France
Key people	Jean-Cyril Spinetta (Chairman and CEO), Peter Hartman (Vice-Chairman)
Products	Passenger flights: Air France, KLM, HOP!, KLM cityhopper, and Transavia Cargo flights: KLM Cargo, Martinair Cargo and Air France Cargo Aircraft maintenance: KLM UK Engineering LTD and EPCOR B.V. Catering: Servair, Swissport, KLM Catering Services B.V., etc.
Services	Airline services
Revenue	€25.63 billion (2014)
Operating income	€24.912 billion(2014)
Profit	€-129 million (2014)
Total assets	€23.230 billion (2014)
Total equity	€632 million (2014)
Number of employees	94,666 (2014)
Website	www.airfranceklm.com/en/

Air France–KLM 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.

Air France–KLM is the result of the merger in 2004 between Air France and KLM.

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. The company's CEO since 17 October 2011 is Jean-Cyril Spinetta.

Both Air France and KLM are members of the SkyTeam airline alliance. They offer a frequent flyer programme called Flying Blue. The company's namesake airlines rely on two major hubs: Amsterdam Airport Schiphol and Paris–Charles de Gaulle Airport.

Air France–KLM Airlines transported 87.3 million passengers in 2014.

History

Air France–KLM was created by the mutually agreed merger between Air France and Netherlands-based KLM on 5 May 2004.

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 18.6%.

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. However, on 2 April 2008, it was reported that negotiations have been abandoned. 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.

February 2011: Air France–KLM with Delta Air Lines are working together to examine a bid for Virgin Atlantic. At the present Richard Branson has 51 percent stake of Virgin Atlantic and the rest is held by Delta Air Lines.

Air France–KLM was categorized as one of World's 10 safest airlines in August 2011.

The company cancelled its flights to Iran as of April 2013.

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

Potential negotiations with Japan Airlines

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 is experiencing financial problems. Air France–KLM, along with Delta and Delta's rival American Airlines (AMR Corporation; part of Oneworld) discussed investments for a sum 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 being partners because of their "healthy" financial status compared to AMR Corporation. 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 on the negotiations. Air France, Alitalia, China Airlines, China Southern Airlines, Korean Air, and Vietnam Airlines are SkyTeam members that currently have codesharing with JAL.

On 7 February 2010 several news outlets reported that JAL will decide to keep its alliance with American Airlines and end talks with Delta. New JAL CEO Inamori and ETIC officials, according to the reports, 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 includes the joint application of antitrust immunity approval on transpacific routes. The airline will also fortify its relationship with other partners in the Oneworld alliance.

Financial details

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.

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. In November 2010, the European Commission fined Air France–KLM €310 million following another price-fixing investigation.

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.

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

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.

Subsidiaries

Air France–KLM

Wholly owned

Wholly owned subsidiaries of Air France–KLM include:

• Air France
  • Air France Cargo
  • HOP!
  • transavia.com France (60%)
• KLM
  • KLM Cargo
  • KLM Cityhopper
  • Martinair
  • transavia.com
    • transavia.com France (40%)

Air France–KLM also owns Cobalt Ground Solutions a ground handling company based in 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).

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.

Minority interests

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

• Air Corsica 12%
• Air Côte d’Ivoire 20%
• Air Mauritius 3%
• Air Tahiti 7%
• Alitalia 7.08%
• Kenya Airways 26%
• Royal Air Maroc 3%
• Air Calédonie 2%
• Gol Transportes Aéreos 1.50%
• NS International (formerly NS Hispeed, high speed rail connections linking Amsterdam (Schiphol) to Brussels and Paris) 10%

Former subsidiaries

• Cityjet: Air France–KLM used to own the entire company, until the sale to Intro Aviation, a German aviation holding company.
• VLM Airlines: Air France–KLM merged the operations of this company with the ones from Cityjet. It was sold at the same time.

Fleet

The fleet of Air France–KLM includes the fleets of its subsidiaries, the fleet of Air France incl. Air France Cargo (251), and the fleet of KLM incl. KLM Cargo (117). Furthermore, the fleets of HOP! (101), KLM cityhopper (48), Transavia.com incl. Transavia France (45) and Martinair Cargo excl. leases from KLM Cargo (6) are fully part of the company. The total number of planes in the fleet is 568 as of September 2014, this is including a cargo fleet (Air France Cargo, KLM Cargo and Martinair Cargo) of 14.

Air France KLM Passenger & Cargo Fleet

Aircraft	In fleet	Orders	Passengers					Airline	Notes
			F	C	Y+	Y	Total
ATR 42–500	15	—	—	—	—	48	48	Airlinair (for HOP!)
ATR 72–500	10	—	—	—	—	70	70	Airlinair (for HOP!)
Airbus A318-100	18	—	—	—	—	132	132	Air France
Airbus A319-100	40	—	—	var.	—	var.	144	Air France
Airbus A320-200	46	4	—	var.	—	var.	180	Air France	5 stored;
	5	—	—	—	—	180	180	Transavia France	Being phased out, replaced by Boeing 737-800
Airbus A321-200	25	—	—	var.	—	var.	212	Air France
Airbus A330-200	15	—	—	40	21	147	208	Air France
	12	—	—	30	31	182	243	KLM
Airbus A330-300	4	1	—	30	40	222	292	KLM
Airbus A340-300	13	—	—	30	21	224	275	Air France	To be phased out by 2016
Airbus A350-900	—	18	TBA					Air France	Deliveries from 2017 onwards
	—	7	TBA					KLM	Deliveries: 2019 (2), 2020 (2), 2021 (2), 2022 (1)
Airbus A380-800	10	5	9	80	38	389	516	Air France
Boeing 737-700	18	2	—	20	12	90	122	KLM, 2 order due from Transavia
	9	—	—	—	—	149	149	Transavia.com	All phased out by 2015
Boeing 737-800	25	—	—	20	24	120	164	KLM
	31	—	—	—	—	189	189	Transavia
	14	20	—	—	—	189	189	Transavia France
Boeing 737-900	5	—	—	28	18	132	178	KLM
Boeing 747–400	7	—	—	36	—	396	432	Air France	To be phased out by 2016
	7	—	—	35	36	337	408	KLM	To be phased out by 2017
Boeing 747-400M	15	—	—	35	36	197	268	KLM
Boeing 777-200ER	25	—	4 — —	49 40 33	24 24 24	174 216 250	251 290 307	Air France	All to be reconfigured to 290 seats lay-out by 2015
	15	—	—	35	34	251	320	KLM
Boeing 777-300ER	37	3	8 — —	67 14 42	28 32 24	200 422 317	303 468 383	Air France
	8	5	—	35	40	350	425	KLM	Deliveries: 2015 (2), 2016 (2), 2017 (1)
Boeing 787–9	—	12	TBA					Air France
	1	17	—	30	48	216	294	KLM	Deliveries: 2015 (2), 2016 (9), 2017 (5), 2018 (2), 2021 (1), 2023 (2), 2024 (1)
Boeing 787–10	—	6	TBA					KLM
Bombardier CRJ100ER	10	—	—	—	—	50	50	Brit Air (for HOP!)	5 stored
Bombardier CRJ700	15	—	—	—	—	70	70	Brit Air (for HOP!)	2 stored
Bombardier CRJ1000	13	2	—	—	—	100	100	Brit Air (for HOP!)
Embraer 135	5	—	—	—	—	50	50	Régional (for HOP!)	All stored
Embraer 145	20	—	—	—	—	50	50	Régional (for HOP!)	2 stored
Embraer E-170	16	4	—	—	—	76	76	Régional (for HOP!)
Embraer E-190	10	2	—	—	—	100	100	Régional (for HOP!)	2 to be sold to KLM Cityhopper
	28	2	—	—	—	100	100	KLM Cityhopper	2 to be acquired from HOP!
Fokker 70	20	—	—	—	—	80	80	KLM Cityhopper
Cargo Fleet
Boeing 747-400ERF	3	—	N/A					KLM Cargo	All leased to Martinair Cargo
Boeing 747-400BCF	1	1	N/A					Martinair Cargo
Boeing 777F	2	3	N/A					Air France Cargo
McDonnell Douglas MD-11F	4	—	N/A					Martinair Cargo	To be phased out by 2016
Total	572	118							19 stored

Head office

Head office of Air France–KLM in Roissypôle

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. 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 had a price of 137,000,000 euros.

External links

• Corporation Website
• Air France–KLM Financial page
• Air France–KLM Corporate Authentication & Authorization Services
• Air France–KLM Cargo
• Bluenity
• Air France–KLM Group Company profile from Yahoo!