KLM for sale

[Bluemaithai]

Air France in deep financial trouble and need to sell off assets. The only asset the market is interested in is the money-making KLM. Chinese airline (China Southern?) and Ethiad are interested, so they can get additional grip on Europe.

[Fairdealfrank]

A good one for IAG? That would be deja-vu all over again!

[StoneyBridge Radar]

I wouldn't be in the slightest bit surprised if this turns out to be true.

I have been told the expected synergies between AF and KL simply haven't materialised and there is very deep seated resentment amongst AF departments that their working T&Cs are going to be eroded when they are compared to their counterparts at KL.

I think this could be a race between Etihad and IAG.

[JSCL]

I highly doubt an IAG takeover. They don't have the cash floating around to look at a KLM takeover. They've taken BMI, they're looking at TAP and that's as far as it goes. They may have muscle, but not enough that the Dutch will allow a British company to take the majority at AMS and LHR.

[LD12986]

A non-EU airline would have great difficulty getting around EU ownership restrictions.

KLM is not the source of AFKLM's problems. It is Air France. AFKLM selling off KLM is just kicking the can down the road (not that Europe doesn't do this!) and would be a major retreat in the consolidation game.

[davidjohnson6]

Let us suppose that IAG not only have spare cash but also management has the time to take on a big new project. What would be IAG's inherent advantage in pursuing merger synergies that Air France lacks ? Furthermore ripping KL out of a company which has merged some of their back office systems and processes with AF further decreases any advantage that IAG may have.

[geriatrix]

Perhaps Alitalia might buy them! :-)

[racedo]

I see French Govt will start to have to reconsider the amounts it pays AF for transportation of its troops abroad again.......................think its a subvention of €2000 a seat at moment.

[Capetonian]

KLM is not the source of AFKLM's problems. It is Air France.

I worked for KLM as a contractor round the time of the takeover/merger and we had combined teams from the two airlines on the project. Some of the things that the KLM people said about AF, the French, and particularly about French working practices are not repeatable here, nor in polite company. It was clear - rather like the Euro - that the fusion between these two totally different cultures was a marriage made in hell and doomed to failure.

The Dutch are hard working, they build bridges rather than barriers, they speak perfect English, they are able to be relaxed and professional at the same time, they arrived at meetings punctually and ready to work and move the project forward. My most vivid memory was of one of the French colleagues picking up a report with which he disagreed, tearing it up, and spitting at the person (an external consultant, and a female, which makes it even worse) who had written it.

I am surprised that the combination has worked as well it has for so long. Despite all that, Air France is an excellent airline in the air, but let down on the ground and particularly at CDG by poor customer service.

[TSR2]

The Dutch are hard working, they build bridges rather than barriers, they speak perfect English, they are able to be relaxed and professional at the same time, they arrived at meetings punctually and ready to work and move the project forward.

Yes I fully agree with that statement in general terms.

[jabird]

I see French Govt will start to have to reconsider the amounts it pays AF for transportation of its troops abroad again.......................think its a subvention of €2000 a seat at moment.

Is that single, or returning home on the next available sector?

[PAXboy]

When the merger was made, I recall reading that for the first <?> years (I cannot recall) there would NOT be a merger of departments but they would carry on as before. THEN start to merge. The moment I read that, I knew it was not going to last.

If you are going to merge - then you must MERGE. It is well known that you have to get the bad news (redundancies) over as quickly as possible so as to get the rest of the workforce to work together.

The notorious French laissez-faire coupled with their fierce protection of anything that might even remotely be said to belong to France - meant this was not going to work. I feel very sad for the KLM people but European aviation is way behind the curve in consolidation. There is a lot more pain yet to come, not just for these two.

[No RYR for me]

BA and KLM together and Schiphol as the hub for all the connecting UK traffic so no need for a new London Airport... Ohh boy it would have been so nice... and so much cheaper :ooh:

Then again, leaving the french work ethic aside: they do have the best canteens and lunches in the world! So at least one reason to start a joint venture (yeah right) with AF ;)

[Longhitter]

Two things make the opening statement of this thread b*ll*cks:

1. KLM is not a subsidiary or owned by AF. Air France-KLM is a single listed company operating under two brands, unlike IAG which is a holding that owns two different airline companies (BA and Iberia). AF cannot just 'sell' KLM, as the company would need to be split up and that is very complicated.

2. If it was possible for AF to sell KLM it would be extremely unwise to do so, as KLM is making a profit and generating cash. The balance sheet of AF would hardly improve, as the debt vs. assets ratio would not significantly change (debt would decrease, but so would assets) and cash flow would worsen.

What AF needs to do is be more like KLM, that is: increase productivity and reduce overhead (meaning: get rid of about 5000 staff that spend most of their working time picking their noses...). Also very difficult within the messed-up labour relations that exist in France, but something needs to give.

[JSCL]

Longhitter, you say you're from planet earth, but I disagree.

Allow me to inform you that Air France-KLM Group is exactly that, a Group.

It is a Group, similarly how IAG is a Group. AF and KLM both operate with their own subsidiaries - it's like saying Lufthansa Group can't sell Brussels Airlines because it's all part of the same Group.

Pardon me for emphasizing group, but it needed to be.

[No RYR for me]

What AF needs to do is be more like KLM, that is: increase productivity and reduce overhead (meaning: get rid of about 5000 staff that spend most of their working time picking their noses...). Also very difficult within the messed-up labour relations that exist in France, but something needs to give.

The bets are on that in 3 months AFTER the french ellections the overhead of AF will be reduced big time...... :oh: