KLM Royal Dutch Airlines
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- KLM Royal Dutch Airlines
P.O. Box 7700
1117 ZL Schiphol
- Main hub
- Amsterdam Schiphol Airport
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- Full Service Carrier
- Domestic | International
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- Part of Air France-KLM S.A.
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Established in 1920, KLM Royal Dutch Airlines is the national carrier of the Netherlands. KLM operates an extensive network which includes services within Europe and to Asia, Africa, North America, Central and South America and the Middle East. The carrier also operates freight services, and handles all service operations from its hub at Amsterdam Schiphol Airport. KLM is a founding member of the SkyTeam alliance, and is part of Air France-KLM S.A.
Location of KLM Royal Dutch Airlines main hub (Amsterdam Schiphol Airport)
3,079 total articles
252 total articles
Reports that easyJet may be considering a bid for Monarch Airlines could herald a much anticipated wave of consolidation in Europe's LCC segment. The CEOs of both Lufthansa Group and Air France-KLM have indicated that they expect consolidation, while IAG has previously been active in this field, by acquiring Vueling in 2013.
This report compares the market structure of Europe's LCC segment with that of North America and considers the prospects for consolidation among European low cost airlines. As with the broader market, Europe's LCC segment is more fragmented than North America's. However, viewed as a market in its own right, it is more concentrated than the broader European market.
The two leading LCCs, Ryanair and easyJet, have almost half of all intra-Europe LCC seats between them (but Southwest has more than 60% of intra-North America LCC seats on its own). Notwithstanding speculation about easyJet and Monarch, whose Europe seat share is only 2%, any meaningful LCC consolidation in Europe seems more likely to involve second-tier LCCs. This may include the LCC subsidiaries of the legacy groups, although none of the big three appear ready to lead the process currently.
Part one of this report on European airline market structure and consolidation highlighted that the top twenty airline groups in Europe hold 75% of seats. This is the same share as the top six groups in North America. This equivalence, in market share terms, between Europe's top 20 and North America's top six underlines the huge gap in consolidation progress between the two regions' airlines. It would take a large number of merger and acquisition deals to recreate North America's market structure in Europe, consolidating 20 into six.
This second part of the report is a kind of fantasy, a hypothetical. It suggests an illustrative series of combinations among Europe's top 20 that would approximately replicate the market shares, in terms of seat share, held by North America's top six.
This would require large merger and acquisition transactions involving pairings between members of Europe's smaller top six of Lufthansa Group, IAG, Ryanair, Air France-KLM, Turkish Airlines and easyJet. It would also mean several deals involving second-tier FSCs and LCCs. However, for now the larger deals in Europe remain relatively unlikely, and there are even hurdles to the smaller deals.
Consolidation among Europe's airlines has always been fitful, and truly sizeable deals have ground to a halt in recent years. By comparison, North America has become the benchmark of airline consolidation progress. The announcement that Alaska Airlines is to acquire Virgin America once again highlights the differences in pace between Europe and North America.
This first part of CAPA's analysis of European airline market structure and consolidation compares market concentration in Europe with that of other world regions and looks at the link with profitability. It mainly focuses on comparing Europe with the other two large aviation markets, North America and Asia Pacific, but also gives data on market concentration for all of the other regions: Middle East, Latin America and Africa.
Europe's fragmented airline market is less profitable than its much more consolidated North American counterpart (although, on most measures, Europe is less fragmented than Asia Pacific). Europe's top 20 airline groups have the same seat share as North America's top 6.
Part two of this report considers a possible set of combinations to reassemble Europe's top 20 into six groups matching North America's top six.
It is more than a year since Delta, United and American Airlines published their 'White Paper' alleging state subsidies to Emirates, Qatar Airways and Etihad. CAPA's Airlines in Transition (AIT) event in Dublin assembled a panel of senior industry figures moderated by John Byerly, a former Deputy Assistant Secretary for Transportation at the US State Department, to review the arguments.
The US big three claimed that subsidies to the Gulf three distorted the market. They called on the US government to open consultations under the relevant bilateral air services agreements and, in the meantime, to freeze new passenger services. A ponderous bureaucratic process to examine whether action should be taken is still under way. European airlines have also been dragged into the debate.
At the same time, the Gulf airlines have continued to add and announce new routes to the US. Ultimately, the US big three's aims contemplate the termination, or modification, of the relevant 'open skies' bilaterals, which allow the Gulf airlines unlimited capacity on routes to the US (the bilaterals reciprocally offer the same to the US airlines). From airlines faced with unexpectedly effective competition this cynical approach was little more than an attempt to further distort an already protective bilateral system.
When the regulators approved metal-neutral joint ventures over the North Atlantic, initially involving major airlines in the three global alliances (the JV between Delta and Virgin Atlantic came later), the justification was that they would be in the public interest. In general, the so-called immunised joint ventures have encouraged better capacity and frequency coordination, and a convergence of product and service quality towards that provided by the superior partner (although there is still room for improvement in many cases).
Schedules data from OAG indicate that 78% of North Atlantic ASKs will be operated by these JVs in summer 2016 (assuming that Aer Lingus joins oneworld and its JV). Although airlines outside the JVs are growing their share – led by LCCs, airlines owned by leisure groups and Turkish Airlines – this high concentration illustrates the impact that the JVs have had on reducing competition.
This report examines historical North Atlantic capacity trends and considers some of the issues discussed by a panel at CAPA's Airlines in Transition (AIT) conference in Dublin in Mar-2016, moderated by John Byerly, a former Deputy Assistant Secretary for Transportation at the US State Department.
Airline seat growth from Europe is set to accelerate to 8% this summer, up from 6% in summer 2015, according to the latest schedules data from OAG. This will be the highest summer growth rate in six years. With summer 2016 starting in less than three weeks, the data are now fairly solid (although, of course, they are always subject to further change).
Capacity to Africa will fall and Asia Pacific will experience slowing growth from Europe, but every other region will experience an acceleration this summer. Intra-European seats will grow by 8%, with growth led by LCCs (including the low cost subsidiaries of the big legacy groups).The Middle East will continue to have the highest rate of capacity growth from Europe, but there will also be double-digit growth to Latin America and to North America.
This acceleration of capacity growth on the North Atlantic is partly due to the emergence of new competition, but also seems to be the result of incumbents switching capacity from elsewhere. This should perhaps be a source of some concern to the immunised JVs.