The Air France-KLM Supervisory Board announced a raft of changes to its governance structure on February 19, streamlining decision making within the Franco-Dutch airline group. Part of the decision is to reappoint Pieter Elbers for another 4-year term as KLM’s CEO.

New Group CEO Benjamin Smith had come under intense pressure to reappoint Elbers after reports indicated that the Canadian was opposing another term of this Dutch colleague. A petition signed by over 25.000 KLM staff and a warning from the Dutch government that ditching Elbers would destabilize AF-KLM has been of influence, although the Supervisory Board based its decisions on the strategy proposal from Smith.

In a press statement, Elbers says: “I am proud and deeply thankful to all my colleagues in the company for being so aligned and supportive in this wonderful journey. Today, in the year of our 100th anniversary, we are a fit, thriving and healthy company once again. Our 2018 results are a testimony to this! I sincerely thank the respective Boards of KLM and AIR FRANCE-KLM for placing their trust and confidence in me with my reappointment. I look forward to serving KLM for the next 4 years as CEO.” The reappointment needs confirmation from the shareholders at the annual general meeting in April.

The board agreed to create a Group CEO Committee, chaired by Smith and including Elbers, Air France CEO Anne Rigail and CFO Frederic Gagey. Their job is to increase collaboration at Group level “to better capture synergies, efficiencies, and economies of scale, with the aim of improving overall Group profitability”.

This includes simplifying processes as fleet management and network strategy, purchasing, human resources, alliances strategies dan digital/data management. It remains to be seen where this integration will hit AF and KLM most. KLM has feared for some years that AF has had a desire to move decision-making departments from Amsterdam to Paris.

Smith will become a member of the KLM Supervisory Board, a proposal seen with suspicion by Elbers and other KLM factions but he was unable to object. Both Air France and KLM will reinforce their respective hubs at Paris Charles de Gaulle as well as the AF, KLM and Transavia brands.

Air France also announced it has reached an agreement with pilot’s union SNPL.
Air France-KLM will present the 2018 results on February 20.

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