France, Netherlands seek to douse Air France-KLM strife
March 1, 2019
The French and Dutch finance ministers have met amid tensions over the Netherlands' move to increase its stake in the airline. The share purchase had sparked concerns of a tug of war between the two governments.
Dutch Finance Minister Wopke Hoekstra and his French counterpart, Bruno Le Maire, pledged to cooperate to strengthen the alliance after the hurriedly arranged talks.
The two agreed to set up a working group comprising officials from both countries, to put forward proposals by the end of June.
Air France-KLM shares plunged nearly 15 percent after the Dutch government announced on Tuesday it had amassed a 14 percent stake in the airline, almost matching the French government's 14.3 percent holding. Investors feared that the move could start a political tug of war that risked derailing the airline's restructuring efforts.
The announcement prompted French President Emmanuel Macron to call on the Dutch government to explain why it had been secretly raising its stake in the airline.
Shares in the alliance recovered a little after the ministerial talks and were trading up 5 percent in Paris.
Boeing 747: The original jumbo jet turns 50
Fifty years ago saw the maiden flight of the Boeing 747. The jumbo jet became the world's dominating passenger aircraft in no time, offering new (big) opportunities to airlines around the globe.
Image: picture-alliance/imageBroker/J. Tack
The name says it all
A British Airways jumbo approaching Heathrow Airport near London. This picture shows why the Boeing aircraft officially designated the 747 was quickly given the nickname "jumbo jet" shortly after its market launch 50 years ago. The four-engine jet is simply huge.
Image: Reuters/T. Melville
Old friends
Boeing President Bill Allen (left) and the head of the US airline Pan Am, Juan Trippe, on February 9, 1969 after the maiden flight of the first 747. The two had a long-standing friendship. According to legend, Trippe is said to have approached Allen as the plane-maker was finishing plans for the wide-body aircraft: "If you build it, I'll buy it." Boeing's answer: "If you buy it, I will build it."
Image: picture-alliance/dpa/Boeing
Traveling in elegance
The new 747 was not only praised for its technical innovations, it also stood for glamor. With a lounge serving cocktails, it promised a sleek and relaxed travel experience. At more than 70 meters (230 feet) long and with a wingspan of almost 60 meters, it offered space for between 366 and 550 passengers, depending on how the seats were arranged.
Image: picture-alliance/dpa/Boeing
Catastrophes
Unfortunately, the jumbo jet is also associated with great calamities. The crash of a Lufthansa plane in 1974 shortly after takeoff in Nairobi cost 59 lives. In 1977, two jumbos collided at an airport in Tenerife and 583 died in that accident. In 1988, 270 people were killed in the crash of a jumbo over the small town of Lockerbie in Scotland after the explosion of a terrorist's bomb on board.
Image: Roy Letkey/AFP/Getty Images
Open wide
An unforgettable characteristic of the jumbo jet is its hump — the upper deck, in which, among other things, the cockpit is located. This design allows the cargo version of the plane to have a bow door that allows for generous loads. Today, Boeing practically only sells the four-engine aircraft in the freight version since it uses so much fuel and other more efficient planes are available.
Image: Imago/Russian Look/L. Faerberg
A heavy load
The US space shuttle Discovery rides piggyback on a giant — here a photo from 2012. The Shuttle Carrier Aircraft (SCA) were two modified 747-100s made to transport the space shuttle for the US space agency NASA. They were normally used to return the shuttles to the Kennedy Space Center in Florida whenever one arrived at an alternative landing site.
Image: picture-alliance/dpa
Air Force One
Out of the 1,548 jumbo 747s built, only a few will ever be able to call themself "Air Force One" even though US President Donald Trump has also ordered the next presidential aircraft based on the 747 model line. The Japanese emperor and the Sultan of Brunei also use the "Queen of the Skies" as their official government plane.
Image: picture-alliance/empics
Ed Force One
The British heavy metal band Iron Maiden lands in May 2016 with its chartered Boeing 747 at the airport in Dusseldorf. At the time metalheads and plane spotters secured the best seats to watch the plane — dubbed the "Ed Force One" after the band's mascot, the monster Eddie — land and takeoff. Incidentally, the plane was flown by lead singer Bruce Dickinson himself.
Image: picture-alliance/dpa/D. Young
A flying dinosaur
Like the even bigger Airbus A380 (in the foreground), the 747 no longer meets the economic requirements of airlines that prefer long-haul dual-engine aircraft such as the A350 or the Boeing 777 and 787. In the past year there were only a total of 18 new orders for the 747 jumbo jet, in all there are only 24 unfinished orders on the books.
Image: picture-alliance/dpa
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'Frank and clear' talks
Le Maire described the discussions as "frank and clear," and said the two countries would work together "to improve the competitiveness of the group Air France-KLM and to make Air France-KLM a big success."
Hoekstra said the Dutch government's move to increase its stake in the alliance displayed its commitment to the business.
"I'm aware our stake acquisition is not very orthodox, but it is based on good intentions," Hoekstra told reporters.
Earlier in the week, Hoekstra had said the move was a "fundamental step toward protecting Dutch interests."
"We now have a seat at the table," he said.
The Dutch government is said to have ordered the covert share purchase after Air France-KLM's new chief executive, Ben Smith, appeared to ignore its concerns about his plan for closer integration between the Air France and KLM operations.
The Netherlands fears that many KLM flights may be transferred to Paris as part of the integration process, which would undermine Schiphol's role as an airline hub.
Franco-Dutch tensions
Air France and KLM, which have maintained separate corporate structures and boards, and enjoy a high degree of management autonomy, have shared an uneasy relationship since their merger in 2004.
Earlier this year, tensions escalated over suggestions that the alliance's boss, Smith, might replace KLM's long-serving chief executive, Pieter Elbers. The move was thwarted by KLM employees and stakeholders, who lobbied for Elbers to remain.
KLM bosses have also been critical of the alliance for what they perceive as its bias towards the French brand. They say business decisions in the group are made based on what's good for Air France and not KLM, despite the Dutch carrier making more money.
In 2018, KLM made operating earnings of €1.07 billion ($1.2 billion), against Air France's €266 million. The French carrier's performance has been hit by union strikes in recent years.
