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Air France-KLM adopt softly-softly approach on costs

September 8, 2016 Headline News No Comments Email Email

egtmedia59Air France-KLM Group is adopting a more conciliatory approach to cost-cutting and casting aside the head-to-head, hard-line stance that antagonised unions and ended up with an Air France manager having his shirt ripped off his back when workers stormed a boardroom.

The new, gentler approach is called “Trust Together”.

Air France KLM tails

Jean-Marc Janaillac, who succeeded Alexandre de Juniac as chief executive in July, will reveal details of program in November. Some details are already out.

“Restoring trust within the group is an absolutely vital part of implementing the changes that are needed to return the company to good health,” a statement on KLM’s website said.

“This is the view Jean-Marc Janaillac expressed when he became chairman and chief executive of Air France-KLM in July 2016.”

The statement added that Janaillac held talks with trade unions in both France and the Netherlands last week, to launch the Air France-KLM project “Trust Together”, a program which supplements Perform 2020.

The statement continued: “It focuses on restoring trust within the group, wherever that is needed, and identifies a number of specific, strategic topics. Reports appeared in foreign media, which were then picked up by the Dutch press, which gave the false impression that Perform 2020 has been dropped.

“KLM and Air France stress that they are continuing to implement Perform 2020, which focuses on cutting costs and achieving greater margins, in order to be able to make the investments that are necessary to ensure a healthy future for the group. The first positive results arising from this trajectory are already discernible for KLM.”

Air France KLM is an unusual and highly successful union of two airlines. The national carriers of France and the Netherlands joined forces in 2004 to become one of the world’s top carriers in terms of revenue and international revenue passenger kilometres. Yet the airlines operate as two separate brands and there are no plans to merge.

KLM has higher productivity levels than Air France and some see KLM as largely propping up the group. Ministers in the Netherlands worry that Air France problems could affect KLM growth. Labour relations are pretty good at KLM, which was Europe’s fourth-largest airline before being bought by Air France.

Written by Peter Needham

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