Air France and KLM Coordinated Sales Strategy aims for 92 Million Euros in 4 years

Patrick Alexandre, Executive Vice President of International Commercial Affairs and Operations at Air France, and Paul Gregorowitsch, Executive Vice President Commercial at KLM, today presented the challenges and scope of the sales strategy implemented by both airlines on international markets. The group’s sales strategy is based on a series of fundamentals aimed to meet customers’ needs: complementary networks, combinable fares, joint frequent flyer program and membership of a major alliance - SkyTeam.

“Sales made on international markets account for 58% of Air France-KLM’s total passenger revenues” declared Patrick Alexandre on the occasion of a press conference held at Roissy airport today. “In this respect, the implementation of a coordinated sales strategy on international routes is one of the Group’s major challenges. The aim is to expand the presence of both airlines, while capitalizing on their respective assets, in order to offer customers a global, streamlined product”. 

Paul Gregorowitsch added, “On all markets, the strength of the merger between Air France and KLM stems from the determination of both airlines to closely coordinate their different, but highly complementary, sales policies, in order to add to their experience and expertise. Over one year of working together has shown that this objective is shared by our 7,510 employees based abroad. This is the best guarantee of success for Air France-KLM.” 

Action plans were drawn up after a phase of consultation and preparation carried out by joint working groups. Their implementation in the field, which is well under way, is expected to generate substantial synergies: about 8.3 million euros in the first year (April 2004-March 2005), 29 million this year (April 2005-March 2006), and 92 million in 4 years. These amounts form part of the total synergies generated by the Air France and KLM combination: 90 million euros in the first year and 580 million in year 4. 

The implementation process has been particularly rapid in stations, where management and operations are concerned. Air France and KLM have rationalized their sales expenditure on international markets through the joint rental of offices and ticket offices wherever possible, and the renegotiation of station handling services.

Three levels of commercial governance have been set up in order to define the guidelines for sales cooperation between the two airlines (Commercial Committee), coordinate the actions of regional managements and establish priorities (Area Commercial Committees), and finally to define in detail and concretize action plans in the field (Regional Management Committees). 

The local sales organization at Air France and KLM has been divided up into 'coordinated markets', served by both airlines and where present structures have been maintained, 'complementary markets' where one of the airlines is not present but benefits from the partner airline’s sales representation; at last, a few markets where there is greater integration of sales forces, led by one regional manager.

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