Merger AirFrance - KLM
HR-experiences
Miriam Kartman (KLM)
Agenda
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Background (Merger AF/KL)
Structure
Governance
Starting position
Employee’s perspective (‘uncertainty’)
HR role from Air France/KLM-perspective
Bridging cultural gaps
Lessons learned
Background
• Merger AF/KL in effect since May 2004
• Structure: one holding (AF/KL) with two separate
operating companies and three businesses (Passenger,
Cargo & Maintenance)
• Governance: Strategic Management Committee in
which AF and KL are represented on a 50/50 basis
(casting vote by AF)
Structure
Current Air France
shareholders
Current KLM
shareholders
Air France-KLM
Listed company
100%
100%
Air France
KLM
Operating company
Operating company
Air France – KLM
1 Group, 2 Airlines, 3 Businesses
Air France - KLM
Passenger Business
Cargo Business
E&M Business
Corporate governance of the two airlines
Control
Each operating airline remains responsible for its own commercial and
operational management on a daily basis (human resources, flight and
ground operations, safety, etc.) and will be responsible for the
implementation of the recommendations made by the SMC.
KLM Management Board
The KLM Management Board consist of three members including one
appointed by Air France.
Air France Executive Committee
One KLM executive in the Air France Executive Committee.
Corporate Governance of the Group
• Chairman and CEO:
– Air France Chairman and CEO
• Vice-Chairman of the Board of Directors:
– President and CEO of KLM
• KLM appointed 4 directors on the Air France Board of
Directors. Air France appointed 4 directors to sit on the
KLM Supervisory Board, made up of 9 members.
• In 2007 Air France appointed 5 of the 9 members of the
KLM Supervisory Board.
Piloting the New Group:
Strategic Management Committee (SMC)
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Responsible for overall Group strategy, namely:
– Coordination of networks and hubs
– Budgets and mid-term planning
– Fleet and investment strategy
– Alliance strategy
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Composition:
– 8 members (4 representatives from each airline)
– Casting vote for the Air France-KLM Chairman and CEO
‘Good Starting position’
Mutual understanding described in a ‘Framework
Agreement’ with assurances in place for Dutch
Government and KLM such as:
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Safeguarding two hubs (SPL/CDG)
Further developing mainports and global networks
Joint aim to realize synergies
Preserve (national) identities and brands
Existing Labour agreements and WC-arrangements
remain unchanged
• Consultation and information with unions and WC
structure kept in place
HR role from Air France/KLM perspective
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Works councils
– French law: information at the latest moment
– Dutch law: continuous exchange of information
Before, during & after the merger process
HR role from Air France/KLM perspective
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Unions
– Ground staff unions
• focussed on job security
• concerned on state ownership
– Pilot union(s)
• focussed on job security & career perspective
Before, during & after the merger process
HR role from Air France/KLM perspective
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Staff
– Manage emotional aspects:
• Air France privatised
• Fear of the future
• “KLM sold“
• “blue feeling”
• Distrust in guarantees
Before, during & after the merger process
‘Labour Agreements’ (1)
Discussions with the unions after announcement of the merger led to a
general agreement with the unions with the following topics:
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Employability guarantee for next 5 years (under conditions)
Recommitment to reduce costs with 10%
Preserve functions within KLM on a fair base
Possibility for a dialogue on holding/SMC-level
Center of excellence
More specific agreement with pilots about preserving career
opportunities, production in balance in good and bad times, pilot
protocols
Bridging << cultural gaps >>
• Language of communication: no French, no Dutch but
English
• Possibility to learn French, Dutch or English
• Management exchange
• Mixed training courses and meetings
• Exchange of best practises
Lessons learned
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Good starting position: ‘Framework Agreement’
Process: ‘careful and timely’
Communication: ‘the right messages’
Intercultural aspect: ‘perception is reality -> Internal
Perception Monitor’
• Mutual respect
Bridging « cultural gaps »
•
Of course we have to bridge huge cultural gaps...
such as the stripes; horizontal or vertical?
Bridging « cultural gaps »
•
Of course we have to bridge huge cultural gaps...
such as Cheese
Bridging « cultural gaps »
•
Of course we have to bridge huge cultural gaps...
such as 1 Airline Group
2 Ground Transport Systems
Bridging « cultural gaps »
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Of course we have to bridge huge cultural gaps...
such as a baquette or a « haring »