Air France chief responds to Dutch complaints with public letter

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SHAFAQNA – The head of Air France-KLM (AIRF.PA)’s French division made an unusual direct approach to the Dutch public on Friday, wading into a reported clash between the airline’s two main brands with an open letter in the largest Dutch business daily.

The letter by Frederic Gagey, chairman and chief executive of Air France, comes after Dutch newspapers reported opposition within the Dutch division to the common parent company’s wish to use KLM’s approximately 1 billion euros (1 billion pounds) in annual operating profit for group purposes, rather than reinvesting it.

In his letter, Gagey said Air France’s costs had been reduced since 2012 and noted 7,000 jobs had been cut.

“The idea that KLM feels all the pain and that Air France isn’t doing anything is completely wrong and a blow to the whole group’s 95,000 employees”, he wrote in the letter, published in Het Financieele Dagblad.

Air France-KLM issued three profit warnings last year, in part due to a pilots’ strike at Air France that cost the group 330 million euros in operating profit in the third quarter.

“The annual figures of Air France-KLM that will be published this month will show how Air France has improved its financial situation as of the end of 2014,” Gagey wrote, referring to yearly earnings due on Feb. 19.

After a Jan. 26 debate in the Dutch parliament, a majority of political parties approved a motion that KLM should “have control of its own cash register”.

Deputy Minister for Transportation Wilma Mansveld said while she sympathized with the sentiment, KLM is a private company that was acquired by Air France in 2004.

 

(Corrects first paragraph to say Gagey is head of Air France, not Air France-KLM as a whole)

Source : Reuters.com

 

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