Air France-KLM

A strategic study to improve the

profitability and the services of
the corporation

Étienne Cochard, Lilja Dögg Ásgeirsdóttir, Razan Nedal Alhalaseh, Sigrún Anna Guðnadóttir, Yutong Wang, Zaneta
Kristjana Wilson
Problem Statement:

Two airlines representing strong national identities have

kept themselves separate long after the merger which can
create threat in competition if the two airlines cannot seem
to operate as one.
Fishbone Diagram
Cultural divide :
At the AF-KLM level : At the country level :

Dutch Side: Dutch Side:

They think that the French are attached to They think that the French are stubborn, more
rigorous hierarchy and political interests which incline to strikes and to refuse compromises.
are not necessarily the same as the interests of Bureaucracy and 2-hour lunch breaks are also
the company stereotypes.

French Side: French Side:

They have the impression that the Dutch think They think Dutch are straightforward, impolite
only of money and are always ready to fight and lacking comprehension. They will also be
for profit. They are not afraid of anything. too self-confident and leave work sooner
 Porter's Five Forces
Threat of having new entries (LOW)
-Alot of safty regulations
-Laws and regulationsthat needs to befollowed
-Highlicense fees toenter the market

Supplier power (HIGH) Buyers power (HIGH)

-Limited number of suppliers in the Competitive Rivalries (HIGH) -Low or no switching cost
industry -Many competitors on the market like -Competitors going the same route for
-Both the supplier for fuel and for Ryanair example Ryanair and easyJet
maintenance part. -Difficultto exitthe market -Buyers can press down the price by
-Long agreements plans between the -High exit cost for the market.
choosing another airline
airlines and the suppliers
High swithcing cost

Threat of substitution (HIGH)

-Many other airlineson the market
-Boats, cars (highways) and trains (SNCF, Thalys,
Eurostar).
 P E S T E L
• Tax rate • Ever-changing
• Different legislation • Lax attitude • Empowerment of • Sustainable
• Exchange rate legal framework
• Governmental towards health supply chain aviation
• Laws based on
discussion • Inflation and safety partners • Global warming-
employment,
• Regulative • Interest rate • France is a • mobile tech- extreme weather
business,
framework • Labor Cost promising country lowering the cost • Pandemic-
environment, data
• Taxation policy • Oil Cost • gender roles • technological limitations
protection
• Unions evolve innovation • Waste
• Personal protection
• Employment • Education level • Maturity of management
laws
rate • experiential technology- not
• Time for business
• economic growth
products reached cases in court
Recommendations
RECOMMENDATION 1

Invest in the employees and their needs

RECOMMENDATION 2

Invest in IT improvement: various technologies, kiosks,

automations in chat support --- stronger synergies

RECOMMENDATION 3

Reduce fuel consumption and restrategize use of aircrafts

Recommendations
RECOMMENDATION 4

Partnerships to strengthen options in long-distance flights

RECOMMENDATION 5

Increase networks for better routes across continents

RECOMMENDATION 6

Finding ways to increase market share

Recommendations
RECOMMENDATION 7

Look into customer needs and analyze the markets across cultural
boundaries and Invest in understanding ways to minimize customer
error

RECOMMENDATION 8

Improve relationships with shareholders to keep them strong

RECOMMENDATION 9

Research into Sustainable Aviation Fuel and reducing the

carbon footprint
Implementations
Have HR across the board to look at employee compensation and other significant factors
for improving work quality as well as ensuring that there are exchange program to better
understand cross cultural borders; i.e., workshops

Meet with engineers and software developers to see how

what advancements can be implemented realistically in
the long run without drastically affecting the stability of
human-operated jobs

Adjusting the lift-to-drag ratio of an aircraft to improve aerodynamic

efficiency; think about using older aircrafts for cargo-based trips and
new aircrafts to better improve customer experience

Establishing a strong air agreements for more options

in long distance routes and routes across continents
Implementations
Research into Sustainable Aviation Fuel and
reducing the carbon footprint

Requesting feedback to better understand customer

satisfaction; Expanding loyalty programs that can in turn
increase market share in the long-run if profitable

Establishing a solid consultancy board

Looking into what type of aircrafts can hold

SAF and see if investment into new aircrafts is
necessary
"When everything seems to be going against you, remember that the
airplane takes off against the wind, not with it".
-Henry Ford
Thank you !
Q&A time.