Did you know that KLM is the world’s oldest airline still operating under the same brand it started under?
Or even the fact that the Dutch airline has been flying for as long as a hundred years, offering connections from its Amsterdam hub to the rest of the world?
That world is certainly a different place from what it was in 1919. For starters, KLM only carried 345 passengers in its first year of operation and can now comfortably transport more than that on one flight!
Secondly, the airline industry has changed dramatically in the past 30 years. 1989 saw KLM partner with Northwest Airlines in the United States and in 2004 it merged with Air France, whilst 2008 saw the coming together of Air France-KLM and Delta Air Lines, following the latter’s merger with Northwest.
That being said, it’s the change to the global ‘hub’ landscape that has, arguably, been one of the biggest to affect the industry.
The Middle Eastern carriers – Emirates, Qatar Airways and Etihad Airways – have all established large hubs at their respective home airports in the past 30 years. Their rapid growth has impacted the development of traditional hubs, such as London, Paris, Amsterdam and New York.
“What made KLM strong was the ‘hub-and-spoke model’,” says Vermeulen. “As KLM was a small airline, with a small home market, the best way to grow was to develop this model and generate traffic from all over Europe to Amsterdam, and then to the rest of the world.”
Now, though, with the landscape changing, Vermeulen admits that both Air France and KLM have their work cut out for them and there is a need to offer a different proposition.
“The Middle Eastern carriers are replicating the hub-and-spoke model and it’s simply competition we have to deal with,” he says. “One benefit in our favour is the schedule for north-south traffic, in terms of the times of connecting flights.”
Air France-KLM is also working hard to keep its fleet and product fresh. 2018 saw KLM complete an upgrade of its premium class product across its entire fleet, whilst Air France is going through a similar process. All of the Boeing 777s and A330s it flies are equipped with the new cabin, whilst the A380s will be complete by 2021.
Air France-KLM has also evolved to meet the ‘on demand’ nature of the modern world, with Vermeulen picking out KLM’s ‘Anytime for You’ offering – which first launched on the Amsterdam-Johannesburg route in July 2017 – as an example of this. It offers travellers more choice and control, allowing them to decide what and when they want to eat on board.
“It allows me to sleep and work whenever I want, and makes it a whole lot more pleasant,” says Vermeulen. “At least, that’s how I perceive it and that’s the feedback we get from our customers.”
Air France and KLM currently fly daily to Johannesburg using 777s, whilst KLM operates a daily service to Cape Town and Air France flies twice a week using an A340. It will also absorb the existing Joon flights from July, following the group’s decision to discontinue Joon, which launched last year and was targeted at millennial customers.
Joon hasn’t worked for Air France-KLM, but the group remains one of the world’s big airline players, with a large interest in the African continent, thanks to Air France’s 16 and KLM’s nine routes.
“Africa has a lot of potential, but as long as countries remain unconnected, in terms of air traffic, it will remain potential and won’t be realised,” says Vermeulen.
He is, of course, referring to the lack of an ‘open skies’ environment, which Vermeulen believes will significantly hamper Africa’s growth prospects.
“I don’t know if that comes from protectionism or a disagreement on how to work out bilateral agreements, but I think it is a limiting factor and if you compare it to Latin America, Europe, the US or Asia, there’s still a lot of ground to cover for Africa to come to that level of connectivity and co-operation between countries.”