Hofmann's recommendations

Hoffmann takes off: KLM CEO Pieter Elbers

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Satisfaction for the flying Dutchman
The headquarters of KLM's strategic partner, Air France in Paris, was astonished when, in a surprising and unannounced move, the Dutch Ministry of Finance acquired a 12.68 percent stake in the Air France-KLM Group on February 27 to match the French government's 14.3 percent stake. The Dutch state paid 680 million euros for this. The Dutch later increased their stake to 14 percent. Previously, they only had a share of 5.9 percent. But the government wants to have as much influence over the airline as France has.
Connoisseur Circle aviation expert Kurt Hofmann spoke about this with a very cheerful KLM CEO Pieter Elbers in Brussels.

Mr. Elbers, are the Dutch satisfied now? Your colleagues in Paris didn't take too kindly to the action...

The fact is that the smaller KLM is much more profitable than the larger, loss-making and, above all, strike-happy Air France. And clearly so. In 2018, KLM made an operating profit of almost 1.1 billion euros, around four times as much as the French airline. Although the long-term effects of the Dutch state's decision to acquire a stake in the group are unclear, the move demonstrates the government's strong commitment to KLM Royal Dutch Airlines.

How are you doing with the new head of the Air France KLM Group, Ben Smith, now in day-to-day business after this move?

Good.

How is the mood in general?

It is important that we continue our business, do our work and continue to develop consistently in this very competitive European environment. After the initial reactions to the surprising decision by the Netherlands, there is now a good atmosphere, which is good for the company. This gives us more energy to focus on the business rather than on governance discussions. It is good that some of these discussions have now been resolved in recent weeks and that we can now move forward. The increased involvement of the Dutch government also underlines the importance of KLM and its Amsterdam Schiphol hub for the entire country.

What is the importance of aviation for the Netherlands?

The impact that the aviation sector has on the Netherlands is extraordinary and significant, probably more than in any other country in Europe, because we are very dependent on aviation. And, we at KLM have restructured in recent years. The company has changed. We are delivering the good results that we have set ourselves as a goal. And we definitely want to continue to do so.

(c) KLM