Secret Dinner Plotted the End of KLM’s Days as an Independent Airline

Air France was partially privatized in 1999. As part of its acquisition of KLM in 2004, the French government’s stake in the combined carrier was reduced from 54.4% to 44%. The deal made the group the world’s largest airline by revenue.

The acquisition of a flag carrier was controversial, and not only did it require the French government giving up majority control but commitments were also made regarding KLM’s independence. To this day KLM has its own CEO, the independence of whom group CEO Ben Smith apparently bristles at.


Copyright: flaperval / 123RF Stock Photo

KLM has been the more financially successful carrier in recent years, but no doubt that running them together and doing more to align strategy makes sense from a management perspective. Though a trivial item it always struck me odd that both Air France and KLM have their own separate lounges in Houston — not just on the same concourse but mere gates away from each other.

A piece in the Netherlands’ De Telegraaf suggests that Air France KLM CEO Ben Smith had a “secret dinner” with members of parliament at the French embassy in The Hague to talk about the future of the airline. (Google translate):

The timing of the meeting is remarkable, however, as Smith is currently engaged in a power struggle over the position of KLM’s CEO Pieter Elbers.

Smith, who took office in September, wanted to manage KLM himself, although two weeks ago he stated that the guarantees previously made regarding KLM’s independent operations will be fulfilled.

The direction in which the company is moving is another. For example, a plan leaked in the media to make KLM a ‘b-brand’. This could cost KLM destinations and sales.

On Monday, French media reported that Anne Rigail, the brand new top executive of Air France, will carry out more operational tasks.

…KLM’s supervisory board (supervisory board) wants to reappoint Elbers and has the works council behind it. In two weeks, the board of Air France KLM must decide on the reappointment of Elbers, although the shareholders of KLM have the last word in April.

“It cooks in the top. There is a war coming up where the dogs do not like bread “, says an initiate. The Vereniging van Effectenbezitters told De Telegraaf last week that the airline would not benefit from mutual legal procedures. Last week a Smith charm offensive failed at the KLM staff. They find his plans vague and are worried about the fact that he does not involve KLM in his plans.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. “It cooks in the top. There is a war coming up where the dogs do not like bread“

    I’m going to assume that’s an idiom that Google Translate didn’t get correct. Also, next time someone asks me for advice, I’m going to say that and immediately stroll away.

  2. Mind you that in a letter to KLM’s supervisory board the Dutch Minister of Finance Hoekstra made it very clear that he fully supports Pieter Alberts.

  3. Two sayings from the Dutch language and literally translated.

    In Dutch you would say:

    Het kookt aan het top: It boils at the top of the company.

    Er komt een oorlog waar de honden geen brood van lusten: War is coming, so serious even dogs do not longer want to eat the bread that falls from the table.

    Freely translated and intended:
    Trouble and serious problems in top management.

    Gerard van Putten

  4. @mmt: I prefer “It cooks in the top. There is a war coming up where the dogs do not like bread” much better. Its punchy. Somehow, they equate passengers to hot dogs in buns. I might be confusing AA with AF. It’s late, I will figure it out in the morning.

  5. In my experience, KLM is one of the best airlines in the world

    I feel KLM employees love to work in its company and that has a direct effect in offering a superb service

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