Merger Of Air France KLM

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Merger Air France – KLM Organizational change Roos Theunissen 2165763 28-05-2014 Table of contents 1. Introduction 2. What contributed to the problems faced by Air-France-KLM post 2009? 3. Organizational structure Air France – KLM 4. New organizational structure Air France 5. Transform 2015; did the measures revive the airline? Introduction There is al lot of parties who were allied to the merger. Schiphol was afraid to loose clientages, the state thought that unemployment should be a consequence and KLM only want to merge. KLM was searching since 1991 for a partner. KLM was searching for a partner, because de European Union had professed that the European aviation could be seen as 1 market. The smaller countries were afraid that their companies get oppressed through the companies such as Air France and Lufthansa. First KLM saw in British Airways a potential partner. British Airways don’t want to give enough power to KLM. KLM had to pay a big punishment to Alitalia and they were making big strategically mistakes. The debts get higher and they had quickly to find a partner to survive. When KLM was adopted, their indebtedness was 6,1 billion. This was equal to the sales volume. KLM was the last 2 years unprofitable, thus the indebtedness build up. Then they merged with Air France. But was it the right choice? First I will look to the problems, which face Air France and KLM, then I take a closer look to the organizational structure and at least what consequences did have the “Transform 2015” plan. What contributed to the problems faced by Air-France-KLM post 2009? The merger has had fundamentally consequences for the two companies, but also for their competitors, airports... ... middle of paper ... ...ble, holds more of the ‘power’ than KLM. Transform 2015; did the measures revive the airline? In January 2012 the company announced the “Transform 2015” plan. This is a turnaround program aimed at restoring profitability. The 2011 loss emphasizes the need for this program to deliver results, given a continuing uncertain outlook as Europe’s economic troubles persist amid high fuel prices. The revenue of Air France – KLM was unable to absorb the fuel expenses. But the total revenues increased by 4,5% year-on-year. The goal of the Transform plan is to reduce the Group’s debt by 2 billion euro by the end of 2014. First they had the Challenge 12 plan and this was a cost savings program. But this plan included reducing unit costs by 10% and slashing 2 billion euro from its net debt by the end of 2014. Also cutting 5000 odd jobs belong to this plan
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