Air France was partially privatized in 1999. As part of its acquisition of KLM in 2004, the French government’s stake in the combined carrier was reduced from 54.4% to 44%. The deal made the group the world’s largest airline by revenue.

The acquisition of a flag carrier was controversial, and not only did it require the French government giving up majority control but commitments were also made regarding KLM’s independence. To this day KLM has its own CEO, the independence of whom group CEO Ben Smith apparently bristles at.

Copyright: flaperval / 123RF Stock Photo

KLM has been the more financially successful carrier in recent years, but no doubt that running them together and doing more to align strategy makes sense from a management perspective. Though a trivial item it always struck me odd that both Air France and KLM have their own separate lounges in Houston — not just on the same concourse but mere gates away from each other.

A piece in the Netherlands’ De Telegraaf suggests that Air France KLM CEO Ben Smith had a “secret dinner” with members of parliament at the French embassy in The Hague to talk about the future of the airline. (Google translate):

The timing of the meeting is remarkable, however, as Smith is currently engaged in a power struggle over the position of KLM’s CEO Pieter Elbers.

Smith, who took office in September, wanted to manage KLM himself, although two weeks ago he stated that the guarantees previously made regarding KLM’s independent operations will be fulfilled.

The direction in which the company is moving is another. For example, a plan leaked in the media to make KLM a ‘b-brand’. This could cost KLM destinations and sales.

On Monday, French media reported that Anne Rigail, the brand new top executive of Air France, will carry out more operational tasks.

…KLM’s supervisory board (supervisory board) wants to reappoint Elbers and has the works council behind it. In two weeks, the board of Air France KLM must decide on the reappointment of Elbers, although the shareholders of KLM have the last word in April.

“It cooks in the top. There is a war coming up where the dogs do not like bread “, says an initiate. The Vereniging van Effectenbezitters told De Telegraaf last week that the airline would not benefit from mutual legal procedures. Last week a Smith charm offensive failed at the KLM staff. They find his plans vague and are worried about the fact that he does not involve KLM in his plans.