AF-KL – Proving to be a Missed Marriage?

Insiders have constantly claimed that the Air France-KLM marriage was a mistake. Both carriers should have picked other partners to achieve critical mass needed to survive in the ‘shark pool’ of commercial aviation.

The missing fit between the Franco-Dutch airline, so far only spoken about behind hidden hands within the two carriers belonging to the AirFrance-KLM Holding S.A., has now been made public through a leaked survey. The internal report, passed on by an anonymous staff member to the Dutch broadcasting station Nederlandse Omroep Stichting (NOS.nl) reveals alarming details, questioning the continued existence of the duo. “Thirteen years after the merger, the distrust between employees of both companies is high,” reads the finding. The Dutch and the French do not understand much of each other, with both of them wanting to be the dominant part, thus neglecting collective group interests severely.  This is the main finding.

Bleak picture
The survey, conducted by researchers on behalf of the unions of AirFrance-KLM, is result of the rating of nearly fifty managers that were asked to personally assess the situation of the combined airline. 
The outcome paints a bleak picture:
While those interviewed at AF hold that the KLM management acts merely in its own interest, without looking much at the group’s belongings and common needs, the Dutch side describes their French peers as “unapproachable, supercilious and unresponsive.”

Distrust prevails
The 100 page-script further states: "The French have the perception that the Dutch only think of money, with the issue of profit coming first to their head. They are not afraid of playing hardball.” Conversely, the Dutch think that “the French are stuck to a hierarchy and to political interests that do not necessarily coincide with the aims of the company.” They widely distrust the French economic system and complain about a wide-spread attitude of the French managers to safeguard jobs at Air France first instead of considering the whole cake when employment decisions have to be made.
The cultural differences and heterogeneous business attitudes have caused a climate of distrust in many areas, resumes the study, with some staff on both sides constantly channeling internal information to the media to influence public opinion. Leaking the survey to the Dutch radio station is the latest proof. 
"The extent to which employees are disillusioned is shocking,” the researchers state. "Many employees are pessimistic, frustrated and tired because they feel that they are not being listened to.”
However, the finding also concedes that many staff members possess a positive spirit and the will to overcome stereotypes existing on both sides.

AF-KL helmsman Jean-Marc Janaillac and his Board of Directors will have to react to the findings of the study
AF-KL helmsman Jean-Marc Janaillac and his Board of Directors will have to react to the findings of the study

Losing track to competitors
The study, although coming to light unexpectedly, is no big surprise. Over months and years, alike complaints could have been heard from those that wanted to listen to internal sources instead of remaining in the comfort zone, acting blind and deaf. It is obvious that the internal cultural clash absorbs a lot of energy, frustrating many managers. It might explain, why AF-KL has lost track to their more successful European competitors that produced better traffic and financial results in recent times. 
The rift that parts AF-KL could also be sensed during a meeting on 13 July in Amsterdam, when KLM Cargo introduced a new sorting system in combination with their new initiative named ‘12SEND’. Managers that explained the product’s functions always spoke of KLM, almost never of AirFrance-KLM. So did Amsterdam’s Deputy Mayor, Kajsa Ollongren in her address who emphasized that the well-being of KLM Cargo is much appreciated by her city because many of the KLM employees live in Amsterdam or in neighboring communities.

Keeping the KLM brand was key
On the occasion, CargoForwarder Global asked KLM CEO Pieter Elbers if – retrospectively – Air France was a wise pick by KLM. He diplomatically stated that critical mass is only achievable if carriers join forces. This could be mergers but also alliances with non-binding financial commitment.
The era of lone wolves in aviation is over, resumed Mr Elbers.
According to information obtained by CargoForwarder Global, back in 2004, when KL was incorporated in AF, the French carrier was the only applicant guaranteeing KLM the continued preservation of its own brand, which no other potential bidder did. This seems to have been the decisive factor for the takeover getting green light by the Dutch government.

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Time to start divorce proceedings?
Thirteen years together and if the reports are all correct, much of the time spent on internal quarreling. Then, surely the time has come to either get the marriage off the rocks or start serious divorce proceedings!
Dutch businessmen have proven themselves over the centuries as being serious and clever businessmen as well honing their linguistic abilities in order to communicate with their neighbours. Whether this can be termed as being pushy or arrogant and not considering others, would be a mistake. There definitely seems to be a cultural chasm between AF and Kl which cannot be crossed.
The plans by AF to start up their own long-haul Low Cost Carrier (project name “Boost”) are surely not in the interest of KL managers who control their long-haul business. Will KL passengers be siphoned away via Paris and cause more unrest?
The KL Cargo product has dropped out of sight during the past years with shippers and agents alike having lost trust in knowing which direction it all might go. Many, including the authors here, still maintain that KL Cargo should have kept the Martinair cargo product up and running and channel the KL Cargo through that in order to gain better results.
Too late now! - then surely the time has now come for both carriers, specifically KLM, to look at “going it on their own” in the future and both ensuring that they come into black figures. A very difficult move - but a divorce is often more effective and advantageous for both parties.
We’ll see!

Heiner Siegmund  /  John Mc Donagh

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