KLM Royal Dutch Airlines is the national flag carrier of the Netherlands as well as the world’s oldest airline still operating under its original name. Headquartered in Amsterdam, it is a member of the SkyTeam airline alliance and serves almost 160 destinations across the world.
What do the major challenges for KLM Royal Dutch Airlines look like post-pandemic and amid the surging demand in 2024?
It's a challenging time; there are geopolitical tensions, like the war in Ukraine and issues in the Middle East. During COVID, we had to let go of a lot of people at KLM with a voluntary resignation scheme to reduce costs. Now, we face a tight labor market, making it tough to get all the necessary staff back for ground handling, maintenance and pilot crews. COVID meant stopping training and hiring pilots for a while, but with a network of 160 destinations now at 88% capacity for long-haul flights, we need to hire more pilots. With big orders from other carriers worldwide, it's going to be an issue in the future. We have our own school for training, hiring, and educating pilots and are focusing on increasing capacity by doubling classes and shortening training.
Suppliers also had to let go of people during COVID, and now they need to get them back. Many sub-suppliers went bankrupt, making the supply chain market very difficult. This affects our maintenance programs and getting new aeroplanes on time. People want to fly, and flying has a future, which is crucial for the Dutch economy. However, we still need to recover from COVID and hire more staff amid a challenging supply chain market.
KLM has a global reach of destinations and recently expanded its trans-Atlantic network. How are you balancing expansion plans with your other more immediate priorities?
Our first priority is to get back to 100% capacity. After COVID, Asia was slow to start, while the North Atlantic market boomed. We added capacity to regions like Los Angeles, San Francisco, and Las Vegas. Now, Japan is doing better, and China is coming back, but we need to balance flights to Asia from Amsterdam. Due to geopolitical tensions, we can't overfly Russia, making flights two to three hours longer and more costly. Destinations in Asia also remain important for us.
This requires more fuel and cockpit crew, making it a huge capacity increase. We always need to balance and rebalance based on circumstances and network needs.
The Dutch Ministry of Infrastructure and Water Management recently amended its package of measures designed to combat noise pollution. What is your position on the amendment?
The government's objective is a 15% noise reduction during the night and 20% during the day, through a reduction in flight movements. Currently, our formal capacity is 500,000 movements, but the adjusted plan reduces this to 460,000 to 470,000 movements. It's complicated, but our position is that we can achieve these goals with fleet renewal and operational measures without reducing movements.
We are making significant investments in fleet renewal, such as the Embraer and Airbus A321neo and A350, and implementing operational measures to reduce noise. We've shown the Dutch government we can achieve these objectives without reducing movements, and now it's up to them to review all views and comply with European regulations.
Are you optimistic that you will receive government support for your sustainability initiatives?
From a Dutch perspective, we recognize the need for business for our economy and business climate, and KLM plays an important role. There will be a lot of regulation and taxation on the industry, combined with the high cost of sustainable aviation fuel. Despite this, we believe flying has a future and are confident the government sees the need to balance business needs with environmental goals.
We were pioneers in many areas, like starting scheduled services to the US and using sustainable aviation fuel and we strive to be frontrunners in sustainable aviation despite the challenges. We need to do this in balance with the environment, and I'm optimistic that the current and new government will support this.
How is KLM leveraging the recent advancements in technological innovation to combat challenges in the MRO division?
We are increasing our use of technology for cost reduction, process efficiency, and customer service. For example, we use AI to predict what customers want to eat on board, reducing waste by 63% and saving more than 100,000 kilograms of meals. On top of this, we also use AR and VR for training and maintenance, which adds value for inspections and improves training for pilots and bridge operators. If we accelerate the use of technology, it will provide significant benefits for our operations across the board.
