Air France-KLM presents its go forward plan to recapture a leadership position in Europe
05 Novembre 2019 - 8:30AM
Air France-KLM presents its go forward plan to recapture a
leadership position in Europe
Roissy, 5th November 2019
Air France-KLM
presents its go forward plan to recapture a leadership position in
Europe
Today, in Paris, Air France-KLM is organizing a
presentation for investors. On this occasion, Benjamin Smith, Air
France-KLM CEO, along with Pieter Elbers, KLM President and CEO,
Anne Rigail, Air France CEO, and Frederic Gagey, Air France-KLM
CFO, will outline the group’s strategic priorities and its
financial trajectory over the next five years.
- Restore a dynamic of sustainable profitability based on a new
value-focused model for the group’s primary stakeholders:
employees, customers, and shareholders.
- A plan built around four main strategic priorities: optimising
the operational model, refocusing passenger revenue growth around
the most profitable segments, developing initiatives on customer
data, the Flying Blue loyalty program, maintenance and cargo, and
pragmatically analyzing consolidation opportunities. Each of these
initiatives support the group's goal to remain a leader in the
sector's ecological transition.
- Financial targets:
- Profit: Medium-term operating margin of 7-8%
- Cash: Medium-term positive adjusted Free Cash Flows
- Leverage: Net debt/EBITDA ratio circa 1.5x
- Shareholder returns: Prospects for returning to dividend
distribution
“In a competitive and fast-transforming
environment for European airlines, the Air France-KLM Group has all
the assets to regain its leadership position”, said Benjamin Smith,
CEO of the Air France-KLM Group. “Thanks to the dedication of our
employees at Air France, KLM and Transavia, since the end of 2018
we have been able to establish the fundamentals of our go forward
plan: simplifying our fleet, clarifying our brand and market
positioning, and unlocking significant commercial and operational
flexibility thanks to new labour agreements. This is the starting
point of a strategy that will allow Air France-KLM to reinvent
itself, creating value for all key stakeholders. We will optimize
our operational model and increase revenues to significantly
improve our operating margin. Everything we do will support our
goal of remaining an industry pioneer as the airline group most
committed to global environmental sustainability.”
The Air France-KLM Group has several unique
assets: the strength of its three brands Air France, KLM and
Transavia, its two hubs in Paris – the world’s leading inbound
destination – and Amsterdam – the leading European connection hub
and where the airline hub-and-spoke model was first invented, its
extensive and highly complementary combined network, and its
powerful commercial partnerships. To fully leverage these assets,
the Group must simplify and optimize its mode of operation and
reposition itself to pursue the most profitable traffic. At the end
of 2018 work was started to lay the foundation for future success,
and the next steps will revolve around four main strategic
priorities, to be rolled out at each airline.
- Optimize the Operating Model: Reduce Operating Costs
and Increase Efficiency
- Managing fleet and product in a more flexible and optimal
way
- Simplifying each airline’s internal processes
- Accelerating fleet renewal
- Implementing additional Group synergies
- Lobbying French authorities to create a more competitive
airline business environment
- Refocus Growth of Passenger Revenue on Most Profitable
Segments by Leveraging Hubs and Powerful Brand
Identities
- Simplifying the brand portfolio around the three master brands:
Air France, KLM, and Transavia, to better target relevant and most
profitable market segments
- Optimizing the networks, each airline focusing on its unique
expertise and core assets:
- For KLM, strengthen its leadership position at Schiphol while
continuing to grow in order to become the benchmark carrier for
connecting traffic to and from Europe.
- For Air France, leverage its local market and premium strength,
with Paris and France being the world’s leading inbound
destinations.
- For Air France and Transavia, strengthen their positions at
Paris-Orly by better leveraging the slot portfolios at the
slot-constrained airport.
- For Transavia, consolidate its leading low-cost position in The
Netherlands and aim to become the leading low-cost airline in
France in terms of number of based aircraft.
- More accurate targeting of customers for an increasingly
personalized offer at a reduced cost of sale
- At the same time, the group will continue to grow its
other businesses and leverage Customer Data, Flying Blue, Cargo,
and Engineering & Maintenance
- Leverage customer data as a major asset of the Group
- Accelerate development of Flying Blue, continuing 2018 program
evolution
- Further develop Cargo contribution
- Position E&M on a profitable growth path, while
contributing to airline operational performance
- The AFKL Group will continue to
pragmatically evaluate consolidation opportunities
- On the strength of its numerous successful global partnerships,
Air France-KLM will pragmatically consider consolidation
opportunities when and where they make sense, with a view to
complementing and strengthening the Air France and KLM networks
while maintaining strict financial
discipline.
The Group's strategic roadmap is an integral part of a
global responsible and sustainable road to European
leadership
- Air France-KLM will remain an industry pioneer in terms of
sustainable aviation, notably by implementing an environmental and
societal plan to 2030.
- From an environmental perspective, the three airlines have
adopted important measures aimed at cutting their CO2 emissions per
passenger by 50% by 2030, as well as promoting the emergence of
sustainable fuels.
Investor Relations
Press
contactOlivier
Gall
Wouter van
Beek
+33 1 49 89 52 59
+33 1 49 89 52
60
+33 1 41 56 56
00olgall@airfranceklm,com
wouter-van
beek@airfranceklm comWebsite: www airfranceklm com
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