Share

Air France and KLM end power struggle, agree to closer ties

Share

PARIS (AP) — Air France and KLM have reached a compromise on tightening ties between the airlines, ending a power struggle that had alarmed the Dutch government, staff and shareholders.

Air France also secured a salary agreement with pilots after protracted conflicts, including strikes last year that shaved 335 million euros ($380 million) off 2018 profits, the alliance said Wednesday.

Details of the deals weren’t released, but group Chief Financial Officer Frederic Gagey said the Air France-KLM plan should boost the companies’ prospects despite high fuel prices and other challenges ahead. Gagey said the group was “absolutely not” considering merging the two airlines entirely.

The plan includes a new joint “CEO committee” that group Chief Executive Benjamin Smith hopes will simplify decision-making and save money. It also involves closer sharing of activities such as purchasing, Gagey told reporters.

Crucially, it allows Pieter Elbers to stay on as KLM’s chief executive.

Trending:
Buttigieg's Port Visit Blows Up in His Face When People Notice What Was Lurking Over His Shoulder

Smith had reportedly pushed for an even closer alliance, which Elbers opposed. That raised concerns in the Netherlands that Elbers would be pushed out and KLM’s role diminished.

Smith then met last week with the Dutch government ministers of finance and infrastructure to discuss the future of the alliance.

Dutch Prime Minister Mark Rutte, speaking at his regular weekly press conference on Friday, declined to detail what was discussed, but he stressed what was at stake. “It is unbelievably important for the Dutch economy that KLM functions well,” he said.

“The organization is not in danger, but it is an organization that, if you compare it with other airlines, is not functioning brilliantly,” he said.

KLM went through layoffs and cost cuts and is more profitable than Air France, which has faced extended labor disputes.

Air France pilots’ unions welcomed the salary agreement meant to end the hostility. “After months of conflict, it was time to enter a new era,” Guillaume Gestas, head of the SNPL Air France ALPA union, said in a statement.

Air France-KLM announced an overall profit in 2018 of 409 million euros ($464 million), up from last year when one-off charges hit the bottom line but lower than some peers. Revenues in 2018 were 26.5 billion euros ($30 billion), up 2.5 percent from the year before.

The group warned of an “uncertain” global context in 2019 because of geopolitical tensions in several countries where it operates and high fuel prices.

___

Related:
GOP Congressman Who Voted to Impeach Trump Announces Retirement

Mike Corder in The Hague, the Netherlands, contributed to this report.

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

Truth and Accuracy

Submit a Correction →



We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

Tags:
Share
The Associated Press is an independent, not-for-profit news cooperative headquartered in New York City. Their teams in over 100 countries tell the world’s stories, from breaking news to investigative reporting. They provide content and services to help engage audiences worldwide, working with companies of all types, from broadcasters to brands.
The Associated Press was the first private sector organization in the U.S. to operate on a national scale. Over the past 170 years, they have been first to inform the world of many of history's most important moments, from the assassination of Abraham Lincoln and the bombing of Pearl Harbor to the fall of the Shah of Iran and the death of Pope John Paul.

Today, they operate in 263 locations in more than 100 countries relaying breaking news, covering war and conflict and producing enterprise reports that tell the world's stories.
Location
New York City




Conversation

The Western Journal is pleased to bring back comments to our articles! Due to threatened de-monetization by Big Tech, we had temporarily removed comments, but we have now implemented a solution to bring back the conversation that Big Tech doesn't want you to have. If you have any problems using the new commenting platform, please contact customer support at commenting-help@insticator.com. Welcome back!