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Air France-KLM S.A.
Société Anonyme
Traded asEuronextAF
CAC Next 20 Component
IndustryAviation
Founded5 May 2004
HeadquartersTremblay-en-France, France
Key people
Products
ServicesAirline services
RevenueIncrease €27.189 billion (2019)[2]
Decrease €1.141 billion (2019)[2]
Decreaseairline 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.

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 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 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]

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]

Corporate affairs

Business trendsJean-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 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.[17]

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, 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.[18] In November 2010, the European Commission fined Air France–KLM €310 million following another price-fixing investigation.[19]

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.[20]

In February 2014, Air-France KLM invested $100 million in Brazilian airline Gol Linhas Aéreas Inteligentes in advance of the 2014 football World Cup.[21]

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.[22]

As of 2019, major shareholders are:[23][24]