It’s Time to Let Air France-KLM’s New CEO Take Charge
Photo Credit: Reports indicate Air France-KLM CEO Ben Smith may prefer another executive to lead KLM. Smith joined the company last year from Air Canada. Air France-KLM
Skift Take
KLM CEO Pieter Elbers is one of the most respected airline managers in the world. But KLM is not an independent airline and ultimately he should be accountable to group CEO Ben Smith.
More than 15 years ago, Air France and KLM merged to become Europe's largest carrier. But the combined airline, no longer the continent's biggest, still operates with two fiefdoms, one in Paris, and the other in Amsterdam, keeping it from leveraging the efficiencies shareholders covet.
You might blame national pride. KLM, the Dutch airline, has been around for 100 years, making it the world's oldest major carrier still flying under its original name. Air France is no slouch, having taken its name in 1933.
When the companies joined, neither governments nor travelers wanted the historic brands to go, so both kept their identities. That structure can boost profits, as customers stick with the brand they prefer, while the group reduces duplication and decreases costs.
But by letting the two airlines operate so independently, Air France-KLM lost out on some cost savings. Now Ben Smith, the company’s new CEO, wants to bring the two parts closer. Smith, the first non-French national to r
