AF KLM Completes Three-Year Merger Phase, Announces Management Overhaul
By Cathy Buyck, ATW Daily News | May 04, 2007
Air France KLM will be changing its top management structure in line with increasing integration between the two airlines and marking the conclusion of the three-year phase-in period following their merger in May 2004.
The group now will be managed by an executive committee consisting of eight members, each representing an operational division across both airlines. This replaces the existing strategic management committee, comprising four members from each carrier, which meets every two weeks alternating between Paris and Amsterdam and makes decisions relating to coordination of the networks and hubs, medium-term budgets, investments and fleet plans as well as alliances.
"The strategic management committee members represented a company; those of the executive committee will represent a function," a spokesperson said, stressing that the group will "remain faithful to the principle of one group-two airlines but we will become more reactive" and that the changes fit within a legal framework established as part of the merger.
The framework contains two main elements: A three-year agreement ended on early this month and a 2004-12 accord covering traffic rights, preservation of the KLM brand, balanced development of the two hubs of Amsterdam Schiphol and Paris Charles de Gaulle and a fair division of the management positions.
Under the terms of the agreement, Air France is allowed at the end of the initial phase to increase its representation on KLM's supervisory board from four to five of the nine seats, on group level to evolve the strategic management committee into a more functional management committee and to dissolve the Dutch foundations, which were created to safeguard the Dutch nationality of KLM. While the first two elements will take place, the last will remain untouched.
The eight divisional director posts will be shared "equitably" between Air France and KLM executives. They comprise finance, cargo, international sales, revenue management, pricing and sales, purchasing and fleet, IT, MRO (only marketing and strategy) and the French market. They do not include flight or hub operations and HR. The new executive committee will be put in place by the beginning of summer.