Is a divorce of AF/KL better ?

Old Nov 11, 18, 9:52 am
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Is a divorce of AF/KL better ?

Currently, KL is making profit while AF makes loss (which I read from the news media last summer).
If this is correct, then is it not better that they divorce and both airlines seek another partner(s) ?
LH can be a more healthy partner for KL ?
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Old Nov 11, 18, 1:12 pm
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Originally Posted by airsurfer View Post
Currently, KL is making profit while AF makes loss (which I read from the news media last summer).
If this is correct, then is it not better that they divorce and both airlines seek another partner(s) ?
LH can be a more healthy partner for KL ?
No, it is not correct.

AF and KL have a lot of synergies and share a lot of costs. KL is profitable now but it wasn't when at the time of the merge, now it's AF not doing so well and hopefully, in the future, they will both perform exceptionally well.
Splitting would be the end of both airlines.
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Old Nov 11, 18, 1:57 pm
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In a day & age when the airline market as a whole is more-&-more leaning towards ‘consolidation’/wide alliances and you name it, I’m unable to see why a big and largely successful player such as Air France-KLM would even consider a divorce. Pretty much armchair CEO’s territory here.

G
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Old Nov 11, 18, 3:44 pm
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LH will dismantle KL like they they did with Brussels Airlines. I'd rather see Ben Smith succeeding in redoing the job for AF/KL as a whole Pieter Elbers did with KL - creating a legacy airline that is competive while keeping a kind of peace with the unions and offering this touch of additional service (short/long haul connections, frequent departures short haul, free food/drinks and free seating & luggage for loyal members). Norwegian is doing a good job competing long haul, but the minute I realised I had to pay 75 Euro or so one way extra to secure a seat, and have 1 meal on a flight to Asia, with wine 6-7 Euro still to pay a glass - I noted KL is not that bad in price/quality.
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Old Nov 11, 18, 3:53 pm
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Originally Posted by AlicorporateUK View Post
In a day & age when the airline market as a whole is more-&-more leaning towards ‘consolidation’/wide alliances and you name it, I’m unable to see why a big and largely successful player such as Air France-KLM would even consider a divorce. Pretty much armchair CEO’s territory here.

G
Excuse me? Maybe we have different concepts of what "successful" means, but in terms of performance - let's use TSR as a good measure - AFKL trails most (all?) of its peers.
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Old Nov 11, 18, 11:25 pm
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KLM did not have the economy of scale to go it alone. As much as I prefer KLM to AF, KLM had reached a point where it's future was limited. Don't lose sight of the big picture: Delta owns 10% and China Eastern owns 10% of AF/KLM. That's a big footprint. If KLM wants access to the growth markets, it needs to stick with AF which has leverage with the investments of the other two airlines.
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Old Nov 12, 18, 3:45 am
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I feel like Lufthansa growing any further in the region would trigger anti-monopoly laws... I mean, LHG is dominant in the whole DACH region, plus Belgium, making it dominant in AMS as well could be just too much.
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Old Nov 12, 18, 4:17 am
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Originally Posted by Transpacificflyer View Post
KLM did not have the economy of scale to go it alone. As much as I prefer KLM to AF, KLM had reached a point where it's future was limited. Don't lose sight of the big picture: Delta owns 10% and China Eastern owns 10% of AF/KLM. That's a big footprint. If KLM wants access to the growth markets, it needs to stick with AF which has leverage with the investments of the other two airlines.
“Not being allied to AF” does not automatically mean “going alone”. I doubt someone argues that KLM would be better off alone. But there are other options than AF, in theory at least. (Note I don’t argue whether an alliance with a different airline would be better for KLM. Most of us here are poor on necessary facts and management expertise to have a well-founded view. “KL is penalised by AF because of their losses and strikes”, while maybe not entirely wrong, is too simplistic).
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Old Nov 12, 18, 9:29 am
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I wouldn't be sad if DL would snatch a bigger slice of the pie from AF
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