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KLM CFO Looks To The Future Amid Airline’s 102nd Birthday Celebrations

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KLM Royal Dutch Airlines, like other international airlines, had to navigate the Covid-19 pandemic’s changing regulations and fear-inducing headlines while sustaining its business. As travel slowly returns, the airline is well-positioned to meet the growing demand.

The airline recently introduced an interactive Covid-19 map that helps passengers understand the constantly updated entry requirements for countries around the world. Based on passport nationality and departure point, the map explains the varying restrictions for different destinations to ease the travel planning process.

KLM managing director and CFO Erik Swelheim shares some of the other changes the airline went through over the past year and his thoughts on what passengers and the industry can expect for 2022 and beyond.

Do you see a return to business travel in the near future?

We see business travel slowly returning, especially now that the USA and Canada have reopened their borders. It’s clear though that leisure travel leads the way. During the summer, our flight loads were close to 80% with regions like the Caribbean, Mexico and the Middle East developing quite well. Traffic to Asia remains low, but all along our strategy has been to maintain as much of our network as possible.

We have reduced frequencies to some cities, but having such a comprehensive route map helped us to attract more passengers. In fact, our strategy includes flying to a lot of smaller airports, including many secondary cities in Scandinavia and the United Kingdom, which gives us greater reach to fill our medium and long-haul flights. Cargo has been especially responsible for helping us to fly almost 100% of our route map.

We don’t have a crystal ball, but our estimate is that in 2023-2024, business travel will return to 2019 traffic levels.

How did KLM manage through during the pandemic?

Leisure travel has sustained us over the past year. Our business class inventory of seats is not as large as other airlines so that has helped, too. We are adding more leisure destinations. For example, in the United States, we are resuming Las Vegas as a destination and adding flights to Cancun and Miami.

We had to make some difficult staffing changes though, going from 33,000 to 27,000 employees. On the fleet side, we retired the iconic Boeing 747-400 aircraft, a favorite of passengers and crew.

Our strategy going forward is to have a fleet type for long-haul (Boeing 777 and 787 planes), one for medium-haul (Boeing 737), and one for short-haul (Embraer 190). We continue to work toward that goal as well as a focus on sustainability. We are taking delivery of the more fuel-efficient Embraer 195-E2 model, which has a 30% fuel reduction when compared with the Embraer 190 it will replace.

What’s the story behind the business class Delft houses?

Each year on the airline’s Oct. 7 birthday (this year KLM turns 102), we come up with a new commemorative Delftware house representing a building of historic significance in the Netherlands. Nearly half of them (49) depict a building in Amsterdam, and this year’s 102nd Delft house is a miniature of the Tuschinski Theater in Amsterdam. This cinema has been named the most beautiful in the world by the British Time Out magazine, and it remains a popular destination for Amsterdam moviegoers today.

Containing Bols Jenever gin, these Delft houses have been an annual tradition that World Business Class customers look forward to, and many of them are avid collectors. There is an app that allows them to read more about each house and log their collection online. It’s a tradition that we are particularly proud of maintaining even during a time of such global change. Every year, we produce one million houses to distribute to business class customers on long-haul flights as a parting gift.

Other European airlines offer food for sale. Will you?

Both Air France and KLM continue to provide complimentary catering on all flights, including in economy class even on short-haul routes within Europe. Unlike the competition, that is not something we plan to change as it is an important part of our brand. We are always studying new options including vegetarian fare and more locally produced products.

What is KLM’s plan for boosting sustainability efforts?

KLM was one of the first airlines to use sustainable aviation fuel, and we recently operated a flight using synthetic fuels. KLM works closely with Dutch university TU Delft in its research and design of what the future of sustainable aircraft could look like. 

Although it is not expected that larger electric aircraft will be available soon, smaller planes are currently available for electric flying in the short-term. 

The KLM Flight Academy, which recruits and trains future KLM pilots, plans to offer training courses on electric airplanes. The flight school has secured options for 14 electric training aircraft (6 two-seaters and 8 four-seaters) to use once they are off the production line. The Flight Academy’s goal is to have a completely CO2-neutral operation within five to 10 years. Sustainability is integral to the future of aviation, and we are happy to continue to lead the way.