Air France-KLM : cost-cutting measures at KLM

(CercleFinance.com) - On Thursday the Dutch airline KLM, a subsidiary of Air France-KLM group, unveiled a series of measures aimed at improving its operational and financial performance, in response to recent cost increases.


KLM states that it has identified a number of key areas for improvement, including increased productivity, as well as initiatives to reduce expenses.

Despite sales growth, these actions have become necessary in view of the rising costs of equipment, labor and airport taxes, the company explains.

The carrier specifies that the plan will also involve simplifying its organisation and postponing all investments deemed non-essential.

At the same time, KLM plans to explore new sources of revenue and seek to generate more synergies.

KLM says it expects these measures to result in a E450m improvement in operating income in the short term.

Earlier this year, the Air France-KLM group announced a series of measures within KLM to structurally improve performance.

These measures are necessary to cope with KLM's rising costs and to guarantee Air France-KLM's ability to achieve its medium-term profitability targets", explains the group.

On the Paris Bourse, Air France-KLM shares rose by over 2% on Thursday morning in the wake of these announcements, compared with a 0.7% decline for the SBF 120 index.


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