Deloitte, the U.S.-based auditing and consultancy company, in a report recently issued, questions the survival of Martinair in its present form when the carrier is forced only to operate with a radically slimmed down fleet.
This seems to be the view of Deloitte after an audit of Martinair’s 2013 performance and Annual Report.
This report was issued with a delay of 13 months and has only recently been registered at the Dutch Chamber of Commerce.
In the above mentioned report Martinair’s management apparently refers to the distinct possibility that additional capital was going to be needed to continue with the (then) existing business
model.
The Martinair Executive Board had further stated that they were confident that extra funding would be forthcoming.
It seems that the Deloitte findings are also along the lines that if money is not pumped in then the chances of survival were slim with the present proposed restructuring plan.
This seems really to be nothing new.
The scale down (as also reported in CFG 16. February) of MP’s operations was already made public by KL’s Board last September and the first part of the fleet reduction will kick in as of April
this year.
There is so far no mention of when Martinair’s 2014 Annual report will be issued.
It is clear, however, that this will make no difference to what has been decided.
The misgivings of the KLM Workers Council and the unions about the shutdown plans are mirrored by the Deloitte report.
The 2013 report showed MP then already holding a so called negative equity even after depreciation on the present cargo fleet.
It is said that KLM gave an internal loan of 50 million euros in December of 2014 in order to stem the negative cash flow.
On top of all this, KLM has agreed to pay a fine of almost thirty million euros for the role Martinair allegedly played in an international cartel centred on fuel surcharge payments.
Air France Chairman is rejecting Dutch criticism
The Chairman and Chief Executive of Air France, Frederic Gagey seems to have had enough of the French carrier being blamed for the poor performance of Air France / KLM.
In an open letter published in Holland’s Het Financieele Dagblad the CEO says that “the general view seems to be that KLM is making all the sacrifices, while Air France does nothing. I want
to set the record straight,” he states. “The idea that KLM feels all the pain and that Air France isn’t doing anything is completely wrong and a blow to the whole group’s 95,000 employees.
He continued by stating that Air France is not a “barrel without a bottom” and if it had not been for the two week pilots strike last September which cost the carrier up to 300 million euros,
that Air France would have made a profit in its latest financial year.
The Dutch concern came about when KLM’s group executives announced that their (KL) annual operating profits were being thrown into the common AF-KL pot instead of being used for new investments
for the Dutch carrier.
The question remains as to what profit?
But that will be revealed we suppose at the annual press conference this week.
It’s now all gone political
The Dutch parliament voted in a motion on January 28th of this year stating that they were fully in favour of KLM having control of its own cash flow.
Reports show that French politicians, led by the French Ambassador to the Netherlands, Laurent Pic, are trying to enter into what they feel should be a constructive dialogue with their Dutch
counterparts.
Is this then something atune to rival lawyers negotiating on the best way as how arrange a suitable divorce?
It’s certainly far from a happy marriage - with the daughter, Martinair caught in the middle!
John Mc Donagh
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Ron (Wednesday, 18 February 2015)
The report, and audit was issued with a delay of 13 months? How can you manage a company on historic figures? And did they pay for it?