Preserving our strategic strengths
Networks, hubs and the alliance are all key to a strategy which is demonstrating its validity in the current environment.
A powerful, balanced network
The Air France-KLM group has the largest route network between Europe and the rest of the world. Of the 179 long-haul destinations served directly out of Europe, it offers some 110, providing two in every three passengers with a travel solution. The Group also offers 43 destinations which are not served by its competitors, thus bolstering the strength of its network.
The hubs, shock absorbers of the crisis
A cornerstone of the profitable growth strategy in recent years, the dual system between Paris and Amsterdam is currently acting as a shock absorber thanks to the diversity of the transfer flows which are not all exposed to the crisis to the same way.With 29,000 weekly transfer possibilities inside periods of under two hours, Air France-KLM has the best offer in Europe.
SkyTeam, a global alliance
SkyTeam is currently the number two global alliance in terms of market share. In addition to Air France and KLM, the alliance has eight other airline members: Aeroflot, Aeromexico, Alitalia, China Southern, Continental until October 2009, Czech Airlines, Delta and Korean Air. Three associate airline members have joined them: Air Europa in Spain, Copa Airlines in Panama and Kenya Airways. Click here to find out more about SkyTeam.
Financial strengths
Air France-KLM enjoys a solid financial structure, a robust balance sheet and a comfortable cash position.
New measures to support the performance of the Group's activities
Adapting its strategy to withstand the crisis In order to rise to the new challenges presented by the global financial crisis, Air France-KLM has implemented measures aimed at:
- Adjusting its capacity to demand
- Adapting its unit costs to the reduction in capacity
- Curtailing its investment plan to preserve cash
- Leveraging its competitive advantages including the joint venture in the North Atlantic
Controlling costs to underpin profitability
In April 2007, the Group implemented the Challenge 10 cost savings plan aimed at savings of €1.4 billion over three years. Given the deterioration in the economic environment, the initial plan has been extended through to 2012 and reinforced with a further €1.1 billion of savings over the period. This plan is subject to constant review in order to improve the Group's profitability.
Accelerating initiatives to increase synergies
For Air France-KLM, the synergies produced by the merger of the two companies represent a major competitive advantage, both in terms of cost savings and enhanced levels of performance. Since their merger in 2004, the integration between Air France and KLM has generated synergies of €790 million. Thanks to the complementarity of their businesses, the Group companies are targeting further synergies through new initiatives focused notably on the integration of the Group's information systems, the improvement in joint organizational structures and the common development of the commercial offer.
