KLM enters its latest chapter

30th September 2003, Comments 0 comments

KLM has forged a new path in agreeing to an Air France takeover offer — but what has the deal achieved? Aaron Gray-Block reports.

KLM and the global aviation industry entered a new era on Tuesday after the Dutch flag carrier agreed to a deal with Air France that will see the two companies join forces to become Europe's largest airline.

The deal effectively represents a takeover, but guarantees that KLM will retain its name for the next five years and protects its landing rights at Schiphol Airport in Amsterdam for the next eight.

The preservation of the separate identities of both airlines is also due in part to bilateral aviation agreements between their governments and third countries which dictate where airlines can fly, BBC reported.

KLM, the Dutch government and Schiphol have welcomed the takeover deal, but it also signals the beginning of the end to traditional notions of "flag carrying" airlines.

"The airline industry is fragmented and its current competitive structure, with national carriers for each individual country, is an inheritance from a former era," both KLM and Air France said.

Moreover, the world's airlines are faced with an estimated USD 10 billion (EUR 8.6 billion) in losses this year due to a slump in passenger numbers. KLM has made no secret of its wish to consolidate by forming a partnership with a strong European airline.

KLM chief Leo van Wijk also said he was confident the "innovative partnership" had created "a sustainable future" for the Dutch airline.

KLM history

1919: KLM founded, celebrating first flight on 17 May 1920 when the aircraft De Havilland DH-16 flew from Amsterdam to London.

1 October 1924: First intercontinental flight departed from Amsterdam to Batavia (modern day Jakarta)

December 1934: First transatlantic flight as a Fokker F - XVIII flew from Amsterdam to the Caribbean island of Curaçao.

September 1945: KLM resumes its post-World War II services.

21 May 1946: KLM launches scheduled Amsterdam-New York service.

March 1960: Dawn of the jet age arrived with the introduction of the Douglas DC-8.

April 1967: New home base of Schiphol was opened.

February 1971: Introduction of the Boeing 747 heralded the start of the "wide-body" age for KLM.

March 1971: KLM started using its present headquarters in Amstelveen.

July 1989: KLM took an important step towards becoming a global airline by taking a 20 percent stake in Northwest Airlines and in January 1993, the US Transport Ministry granted KLM and Northwest anti-trust immunity, allowing them to intensify co-operation. From September 1993, all KLM and Northwest flights between Europe and the US were operated as a joint venture.

December 1991: KLM introduces its Flying Dutchman frequent flyer programme, the first in continental Europe.

1994: The airline celebrates its 75th birthday, completing also its largest share issue in its history. A total of 21,275 million shares were issued at a rate of NLG 44 per share, yielding NLG 1,193 million.

May 1999: Italian flag carrier Alitalia joins the KLM-Northwest alliance, but KLM ends the co-operation in April 2000.

January 2000: KLM launches budget airline Buzz with flights to seven European cities.

2001: After the September 11 terrorist attacks in the US, the airline industry suffered its deepest crisis since World War II and along with many other airlines, KLM announced drastic measures to counter the crisis.

January 2003: Buzz sold to Irish airline Ryanair.

September 2003: Air France takes over KLM.

Dutch guarantees

Satisfied with the market position guarantees afforded Schiphol Airport in Amsterdam, the Dutch Cabinet officially approved the takeover, Transport State Secretary Melanie Schultz van Haegen said.

She said the cabinet had been "actively involved with the negotiations". The Dutch State is the largest Schiphol shareholder — maintaining also a 14.1 stake in KLM — and the government theoretically coul

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