Air France-KLM: Encyclopedia - Air France-KLM

Air France-KLM

Air France-KLM (Euronext: AF, NYSE: AKH) is an airline company incorporated under French law with its headquarters at Roissy-Charles de Gaulle Airport near Paris. It is the largest airline company in the world in terms of total operating revenues, and the third largest in the world (the largest in Europe) in terms of passengers-kilometers. Air France-KLM was created by the mutually-agreed merger between Air France and Netherlands-based KLM on May 5, 2004. Its CEO is Jean-Cyril Spinetta, the former CEO of Air France.

Private shareholders own 81.4 percent of the company (37 percent owned by former Air France shareholders and 21 percent owned by former KLM shareholders), while the French government owns the remaining 18.6 percent. As a result of the deal, the French government's share of Air France had been reduced from 54.4 percent (of the former Air France) to 44 percent (of the current Air France-KLM). Its share was subsequently reduced again to 25 percent, and later to 18.6 percent. The merger has thus resulted, in effect, to the privatisation of Air France.

Both Air France and KLM continue to operate flights under their distinct brand names as subsidiaries of Air France-KLM. This situation may be subject to change in the future.

In the year ending March 31, 2005, the total operating revenues of Air France-KLM amounted to 19.08 billion euros (US$23.98 billion), with a net profit of 351 million euros (US$441 million), a net profit increase of 20.2 percent compared to the previous year.[1] Air France-KLM is one of the most profitable companies in Europe, in sharp contrast with American airline companies which are still experiencing great difficulties in the wake of the September 11, 2001 terrorist attacks. For comparisons, American Airlines, the second largest airline in the world in terms of operating revenues, had total operating revenues of US$18.64 billion in 2004, with a net loss of US$761 million.[2]

As of March 2005, Air France-KLM was operating 554 aircraft. At the time of the merger in May 2004, Air France and KLM combined offered flights to 225 destinations in the world. In the year ending March 21, 2003, the two companies combined transported 66.3 million passengers. Air France-KLM is member of the Skyteam airline alliance. They also offer a Frequent flyer program: Flying Blue

On October 2005, Air France Cargo and KLM Cargo, the two freight subsidaries of the group, announced a merge of their commercial activities. The Joint Cargo Management Team now operates the organisation worldwide from the Netherlands.

Air France-KLM operations rely on two major airline hubs: Charles de Gaulle International Airport (Roissy-Charles de Gaulle) near Paris and Schiphol Airport near Amsterdam.

Air France-KLM also owns a 2 percent stake in the Italian flag carrier Alitalia (November 2005). The Italian Government reduced its holding in the struggling airline from 62 percent to 49 percent after a share issue which effectively meant it had surrendered control.

Adapted from the Wikipedia article "Air France-KLM", under the G.N U Free Docmentation License. Please also see http://en.wikipedia.org/wiki