A318 wrote:Not really, AF bought KLM for 800 Million euro's, KLM had more money on it's bank account in that time so everybody was shocked about what happened knowing the bad history of AF.
KL could not continue on their own really. They were loss making at the time and too small to defend their hard fought through positions. BA would have swallowed them off and KL prefered to close the negociation door.
AF and KL on the other hand allowed for lots of complemantarity and the strategy that was 1 group, 2 brands, 3 businesses (pax, cargo, mx) allowed keeping the brand recognition and culture of both parties.
Besides, the traditional KL's american partners (DL and NW) upon which KL's operations depended heavily found a nice umbrella under the skyteams alliance and AF's partnership.
And it worked well for "KL" (and AMS) which could continue developping beautifully despite the harsh global competition.
Now is the time for more dramatic changes due to increasing challenges : s/h LCC's, l/h lcc's like ME3,Tk,DY (more to come) are eating the legacies cake as never before.
KLM responded immediately on the LCC, first with Buzz, after that with Basiqair which was later integrated into Transavia when they sold the 757's.
KL sold Buzz to FR in january 2003, one yr before the merger with AF.
Everybody knows who is to blame about the very bad results, even the new figures from today show that KLM made profit, Transavia made profit but Air France lost again.
Here are the latest figures announced today:
Air France: Operational loss 21 million euro
KLM: Operational profit 232 million euro
Transavia: Operational profit 62 million euro
So again Air France is the losing party here for 10 years in a row!
You are right, AFKL may still be "underperforming" for this exercise, however on an improving trend.
AFAIK they were not as you say consistently lossmaking in the past 10 yrs or so.
Trying to split the revenues between the 2 brands is, as I already mentioned, a perillous exercise and without great interest or meaning, due to the multiple accounting tricks hidden behind the numbers.
Anyways if that was indeed to be the case, so be it .. Who knows if DTW hub is today more profitable than ATL inside the DL books, or loss making ?
BTW the same holds for a route ntwk, one route (or a set of routes) could not perform well (but still vital) at a given time compared to some others .. In fact it's commun.
I am not saying that nothing should be done to diminish the overall operation costs .. that's exactly what is presently discussed at AFKL headquarters. But there is no miracle solution, nor a clearcut culprit.
Pointing one brand against te other is not the proper way to go. Determing what is it a given brand can do better than the other and let it do is already largely implemented at group's level. Expect more of this philosophy to come as sub-brands spin off.
There is another indicator that you did not mention, it's the shares price evolution.
It's remarkable that AFKL shares value quoted at Euronext Paris are in constant increase since the merger.
To give you an idea, the avg course in jan '12 was 4,580 euro, in jan '13 : 8,093, in jan '14 : 8,669.
Today they plummeted at 6,747 after cruising in july at 10+.
SO AFKL are indeed at crossroads as are most of the majors in Europe.