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KLM Royal Dutch Airline

The objective of this report is to gain an understanding of how this international airline is strategically managed to gain maximum profit from it own fleet and through members of its alliance. This particular airline was chosen first because we had some previous knowledge of them and their alliance with Northwest Airlines. It will be interesting to find out what steps they are taking to fulfill their mission statement of, “Striving to attain excellence as an airline and by participation I the world’s most successful airline alliances, KLM intends to generate value for its customers, employees, and shareholders.”

On October 7, 1919 the foundation of KLM Royal Dutch Airlines was established for the Netherlands and Colonies. May 17, 1920, was their first flight. The route was London to Amsterdam and the aircraft was a De Havilland DH-16. October 1, 1924, was the first intercontinental flight between Amsterdam and Batavia. December of 1934 was the first transatlantic flight between Amsterdam and Curaco. May 21, 1946 was the first flight of the scheduled service between Amsterdam and New York. There first jet service was introduced in the Douglas DC-8 in March of 1960. Their present base at Schiphol Center was


KLM offers a wide variety of aircraft in their fleet of 219 airplanes. Their fleet consists of 747-400s, 747-400 Extended Range Freighter, 747-300s, MD-11s, 767-300 ERs, 737-800, 737-900s, 737-400s, 737-300s, Fokker 100s, Fokker 70s, and Embraer 145s. KLM offers more then just passenger aircraft. They also offer KLM Cargo. Within KLM Cargo they utilize 767s, 747-300/400 All Pax, 747-300/400 Combis, 747-300F Freighters, 747-200F Freighters, 737-300/400/800/900s, and MD-11s. The Boeing 747-400 has a capacity of 426 passengers and 278 in the combi configuration. The B707-400 has a maximum cruising speed of 920 km/h and a range of 12,900 kilometers. The Boeing 747-300 has a capacity of 466 passengers and 291 passengers in the combi configuration. This aircraft has a maximum cruising speed of 900 km/h. and a maximum range is 10,000 kilometers. The Boeing 747-400 Extended Range Freighter can hold up to 112,000 kilograms and has a maximum range 12,900 kilometers. The McDonnell Douglas MD-11 has a capacity of 282 passengers with a cruising speed of 880 km/h. The maximum range of the MD-11 is 11,400 kilometers. The Boeing 767-200ER has a capacity of 220 passengers and a cruising speed 850 km/h. The maximum range of this model is 9,000 kilometers. The Boeing 737-900 has a capacity of 178 passengers and a cruising speed of 850 km/h. The 737-900 has a maximum range of 4,600 kilometers. The 737-800 has a capacity of 158 passengers and a cruising speed of 850 km/h, the same as the 900. The range, however, is slightly shorter at 4,200 kilometers. The Boeing 737-400 has a capacity of 138 passengers and cruises at 800 km/h. The 737-400 has a range of 3,600 kilometers. The 747-300 has a capacity of 120 passengers and it cruises at 800 km/h, the same as the 400 series. The 747-300 has a range of 2,850 kilometers.

KLM’s ambition is to provide efficient transport within their hub and spoke system. The company has initiated several projects to encourage travel by train. However, this method has not prospered success for KLM.

On October 1, 2003 Air France and KLM unveiled plans to create Europe’s largest airline. If everything goes as scheduled, Air France will acquire the Dutch airline for $914 million in stock. If approved by regulators in Europe and the United States it would be Europe’s first mega cross-border airline merger. The combination would create the world’s third largest carrier and overtake British Airways as Europe’s largest carrier. Both airlines will continue to exist as separate operating companies and fly their own liveries, under a new hold name, Air France-KLM. Cross-border mergers and acquisitions of international airlines are almost unheard of because of the network of bilateral treaties between most countries governing which airlines can fly where. However, this deal may be the first of more to come because earlier this year the European Commission gained the mandate to negotiate with the United States to replace bilateral air service agreements with a pan-European transatlantic deal for its airlines.

The international alliance with Northwest Airlines has proven to have multiple consumer benefits, including coordinated connecting service in over 5000 transatlantic city-pair markets. KLM’s growth has been astonishing following their alliance. Traffic carried on the alliance’s Minneapolis-St. Paul/Detroit – Amsterdam market has increased more than six-fold, and much of the traffic flow came from underserved connecting markets. In addition to Northwest Airlines and Northwest Airlink, the following is a list of airlines that KLM currently has alliance agreements with:

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Approximate Word count = 3311
Approximate Pages = 13 (250 words per page double spaced)


  

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