KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) CEO Marjan Rintel has criticised what she describes as "unfair" competition from Chinese airlines, urging the European Commission to implement financial measures to help European carriers compete more effectively.
In an interview on the Dutch television programme WNL Op Zondag, she highlighted that, unlike European airlines for whom Russian airspace is closed due to the war on Ukraine, Chinese carriers can use Russian airspace when serving Europe, which saves them time, reduces fuel costs, and results in lower fares. "That sometimes saves you two to four hours. You see that reflected in the price, and of course, the costs are higher for us."
Akin to rival Lufthansa (LH, Frankfurt International) and its recent appeals to the EU, Rintel called on Brussels to address this disparity to level the playing field for European carriers. "Europe can at least see how we can prevent that unfair playing field by pricing it or looking at it differently."
She was speaking against the backdrop of KLM's announcement of austerity measures on October 3 wherein it is targeting a EUR450 million euro (USD497 million) short-term improvement in its operating results and a structural profit margin above 8% by 2026-2028. The step has been prompted by rising costs for equipment, staff, and airport fees.
Rintel noted that this situation contrasts with the better performance of its sister carrier, Air France (AF, Paris CDG).
Measures to be introduced aim to boost labour productivity, manage the impact of a pilot shortage, consider outsourcing maintenance due to a technical staff shortage, postpone non-essential investments, improve onboard products, and reorganise flight services and training.
Rintel emphasised that current staff do not face immediate increased workloads, as various measures are being considered. These include cutting flight levels back to those of 2019 and hiring new staff, although capacity issues have not yet been resolved. Rintel said she has been talking to trade unions about the steps needed to improve KLM's financial performance and manage costs effectively.
She gave her assurances that the austerity plan would not turn KLM into a quasi budget carrier. While passengers will now pay for food and drinks on European flights, Rintel argued this change has been driven by customer demand for more choice rather than a shift in service quality.
