Air Transport World

KLM continues independent policies.

Amsterdam--KLM Royal Dutch Airlines claims to be the world's oldest scheduled carrier still operating under its own name (it was formed in October 1919; flew its first service in May 1920), but longevity has produced no hardening of the corporate arteries. It is, in fact, among the leaders of the new wave of liberalization in Europe, and its president, Sergio Orlandini, told ATW here, "In time, there is no doubt that the wishes and demands of the consumers will prevail."

Orlandini, in charge of KLM since 1973, having joined the airline as an economist in 1951, does not believe that U.S.-style deregulation is right for Europe. "That would be carrying it a bit too far," he said. But there wee still too many restrictions placed on the industry by both governments and airlines. He accepted, however, that total liberalization will not come until all airlines "stand on their own feet," free from government control.

He praised the agreement signed by the Dutch and British governments in June 1984 which opened up the air routes between the two countries and which resulted in ten new air services, a pound sterling 49 ($70) return London-Amsterdam fare, and an estimated 70,000 passengers who would not otherwise have flown during the first 12 months. "There is no doubt that liberalization has had a negative effect on the yield," Orlandini said. "But it gives us flexibility on the routes, and also in pricing.

"It means that we can serve the public better, and the economics of scale will offset the yield dilution. As a national carrier, we would like to have the chance of competing in more liberalized markets. It is no panacea, but you can see how the market between Holland and the U.K. has grown."

Major equipment decision

The embracing of at least an element of deregulation, so joining a minority of the 20 members of the Association of European Airlines (of which Orlandini was chairman during 1985), is not the only major decision of a radical nature which KLM has taken recently. …

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