Operational excellence: a continuous improvement requirement
Flight safety is an absolute imperative that is embedded in our corporate culture and an integral part of our efforts to improve operational efficiency. This safety imperative, which is continuously reactivated and never taken for granted, must be the focus of a daily commitment from every employee. For example, in recent years, the Group has deployed a demanding continuous improvement process known as LOSA (Line Operations Safety Assessment) based on a peer-to-peer observation system conducted across the company’s entities (pilots, cabin crews, maintenance, cargo, etc.).
In 2018, to take this further, Air France launched the Safety Attitude program, aimed at ensuring that the airline promotes industry best practices. It enables every employee to make a material contribution to flight safety. For its part, KLM launched a new management and document verification system, to further reinforce its regulatory compliance. It is also one of the first airlines to have seen the renewal of its ISO 14001 certification, despite more demanding standards of environmental protection. In 2018, as part of its ongoing process to promote a safety-first culture, KLM generated 13,000 inputs, aimed at predictive and proactive risk management. After safety, another strategic priority for Air France-KLM: deliver on a key factor in customer satisfaction, the punctuality promise. The PERFOPS program was designed with this aim in mind.
This roadmap, which is a veritable collective engagement, enhances our operational efficiency by applying concrete actions in five areas: building a realizable operational model, fluidifying and reinforcing the robustness of our operations, orchestrating these operations as of day one in a serene and efficient manner, mobilising all the professions and, lastly, maintaining control over external factors. Beyond the safety and punctuality objectives, the Group is also implementing numerous initiatives within the framework of operational excellence, aimed at reducing the environmental footprint of its operations. KLM is, for example, planning the deployment of a fleet of zeroemission ramp equipment by 2030.
of ramp equipment used at Paris-Charles de Gaulle and Amsterdam-Schiphol are electric.
> 99,6 %
regularity target for 2020.
Transavia’s position in the Flightright ranking of the most punctual airlines.
For Air France-KLM, the quest for excellence is embodied in the exceptional experience that Air France-KLM wants to off er its customers. The Group is thus continuously modernizing its aircraft and lounges, developing new, personalized digital services and delighting everyone with a multitude of attentive gestures. In synergy with more than 80 strategic partners across all the continents, Air France-KLM off ers passengers a leading global network with, in 2019, 312 destinations in 116 countries. The Group is also optimizing its operational performance with ongoing improvement programs mobilizing employees around flight safety and punctuality. It is also recognized for its maintenance excellence, particularly in its engineering and maintenance activities for aircraft fleets, and in tailor-made freight transportation
The Group’s maintenance excellence is embodied, firstly, in our engineering and maintenance activity for aircraft fleets. Ranked amongst the world leaders in the industry, AFI KLM E&M deploys leading-edge technologies to optimize aircraft availability by reducing the number and impact of equipment failures, while ensuring the highest level of safety. Since 2015, the business has been progressively rolling out its ground-breaking predictive maintenance solution PROGNOS® across the fleet.
Another lever in our maintenance excellence: Air France KLM Martinair Cargo’s ability to meet the needs of tailor-made cargo transportation. To reinforce our positioning in this market, we are accelerating the development of high-value-added activities, like express and postal freight, aerospace and the pharmaceutical sector, for which the Group is now a reference player. In 2018, Air France KLM Martinair Cargo thus became the first airline company to obtain the renewal of its IATA CEIV Pharma certification.
Our maintenance excellence also means reducing our environmental footprint. In this area, Air France-KLM is a frontrunner in the airline industry, thanks to numerous initiatives like investment in the most fuel-efficient and quietest aircraft, more energy-efficient flight procedures, a reduction in the weight embarked on board and digitalization, more environmentally-friendly ground equipment and innovative maintenance solutions which improve aircraft performance. Our results are significant: the Group’s CO2 emissions linked to air operations have thus fallen by 13.5% since 2011.
AFI KLM E&M maintenance sites globally, at the service of more than 200 customers.
of the freight handled by Air France KLM Martinair Cargo is carried in the holds of passenger aircraft.
reduction in noise from the Group’s air operations since 2000.
To offer every traveler access to the whole world, in accordance with their desires and needs, we are constantly expanding our range of destinations. For the Summer 2019 season, we have thus opened 58 new routes, increasing our capacity by 2% relative to the previous season. In long-haul, we now link Paris with Quito (Ecuador) and Dallas (United States), and Amsterdam with Las Vegas (United States). In medium-haul, we serve Tbilisi (Georgia) and Belgrade (Serbia) out of Paris, together with Naples (Italy) and Wroclaw (Poland), on departure from Amsterdam. On all these destinations, we are modernizing our fleets with the addition of more environmentally-friendly aircraft. At the end of the Summer 2019 season, Air France and KLM will both possess 23 Boeing 787 Dreamliners, the most fuel-efficient aircraft to date. The excellence of our network is also supported by a vast ecosystem of more than 80 partners worldwide. This alliance strategy, which is a powerful growth driver for the Group, is also of direct benefit to our customers through a more extensive offer. Since 2000, we have notably been members of SkyTeam, the number two airline alliance globally, regrouping 19 carriers and serving more than 1,150 destinations in more than 175 countries. In 2018, Air France, KLM and Virgin Atlantic also reinforced their cooperation by launching their first code share agreement. With into the bargain, for their respective customers, new travel options from/to North America and more opportunities to earn Miles via their loyalty programs.
new routes proposed by Transavia in Summer 2019, like Amsterdam-Beirut (Lebanon) and Paris-Kos (Greece).
new routes available between the United Kingdom and North America for customers of Air France and KLM, thanks to the new code share with Virgin Atlantic.
Airbus A350 for delivery to Air France in October 2019 (– 20% reduction in fuel consumption relative to the preceding generations).
Conversation with Anne-Marie Couderc and Benjamin Smith
Twenty employees volunteered to contribute to this Annual Report. Six of them were able to meet with Anne-Marie Couderc, Chairman of Air France-KLM, and Benjamin Smith, Chief Executive Officer of Air France-KLM, and to ask questions on the company’s go forward strategy. Below is a summary of this discussion.
Yassine_What surprised you when you arrived at the Air France-KLM Group in 2018?
Ben_When I arrived, I was impressed by the very strong bond between the employees and the airlines, and by their commitment and attachment to the brands. I too am an aviation enthusiast, and I am both very happy and very proud to lead a group like Air France-KLM, which has three extraordinary brands: Air France, KLM and Transavia. Our Group benefits from more than 80,000 highlytalented, professional employees with a wealth of experience. Our people are our first and foremost asset when it comes to facing the challenges of the future.
Fabrice_What is your ambition for our Group?
Ben_Together Air France, KLM, Transavia and their regional subsidiaries HOP and KLM Cityhopper form a group that is envied by many but which is currently lagging behind. We must react. The Gulf state carriers are engaged in an offensive push for traffic from our hubs and are capturing our long-haul growth, the low-cost carriers continue their growth in Europe, and the French domestic market is also under attack from the TGV high-speed train.
It is vital for the companies in our Group to pursue their own transformation plans, but they must also collaborate more closely within our Group; there are still numerous synergies to be leveraged. Our ambition is clear: become the leading airline group in Europe once again. I am convinced that we will be able to rise to this challenge, since each of our airlines is powerful and they are all pioneers at heart, and this has enabled them to continuously transform themselves for nearly a century.
Caroline_How is this ambition reflected in each airline?
Ben_For Air France, it means reaching a better level of profitability. Since my arrival, we have worked hard to re-establish a calmer social dialogue. We have also begun to simplify our commercial offer and brand portfolio to make them simpler, more consistent, and easier to understand, for the benefit of our employees and customers.
Operational efficiency remains a major priority, as does the internal transformation of the French airline. For KLM, we must ensure that the current business model, mainly based on connecting traffic at our Amsterdam-Schiphol hub, maintains its positive trajectory. KLM is now one of the strongest European airlines. It has undergone an in-depth transformation and, as part of the Air France-KLM Group, is again delivering impressive results. We are very proud of this and plan to sustain this momentum.
With Transavia, Air France-KLM is on the offensive in new markets in Europe and the Mediterranean basin. With its low-cost model, Transavia also enables us to defend our positions in highly-competitive markets.
Sandra_The airline industry is regularly called into question for its CO2 emissions. How can we act as a responsible player?
Anne-Marie_Air transport is a means to rapidly connect the world’s citizens and cultures, and in a certain number of cases, there is currently no viable alternative.
However, at Air France-KLM, we are well aware of our social and environmental responsibility. We have made some strong commitments and are engaged in concrete initiatives, with significant results of which we can be proud. We need to make every journey in an aircraft an environmentally responsible one. In order to do this, we need to be constantly reducing our environmental footprint through ongoing improvements in our operations and processes, and by fostering innovation and partnerships, all with the involvement and input from our staff.
We can be proud that, for the fourteenth year in a row, Air France-KLM is included in the Europe and World ranking of the Dow Jones Sustainability Index (DJSI); we are the only airline in the European ranking.
David_The aviation maintenance industry is going to see worldwide growth of 4% over the next decade. How do we benefit from this?
Ben_Air France-KLM is a recognized leader in this industry. We thus have an order book representing nearly five years of revenues. Our growth is driven by the engine and components businesses, which are high added-value activities deploying state-of-the-art industrial technologies. The growth in the global fleets of new-generation aircraft also offers significant growth relays. Lastly, we are going to continue to expand our portfolio of partnerships across all the continents, to be able to offer products and services located close to our customers.
David_You have given the Group a new managerial governance with, notably, the creation of the CEO Committee and the positioning of strategic decision-making at Group level. Why these changes?
Ben_I wanted to simplify our managerial governance and strategic decision-making to make us more effective. This CEO Committee is not new, but it has been reinforced. It brings together Anne Rigail, Pieter Elbers, Frédéric Gagey and myself, and constitutes the Group’s principal decision-making body, in support of the Executive Committee.
The strategic processes are decided by the Group, within the CEO Committee: we must leverage the Group’s strengths to better capture synergies and the complementarity between our companies and brands, identify how the Group can support the action plans of Air France, KLM and Transavia more effectively and encourage the emergence of talent thanks to more employee mobility between the Group’s companies.
Marieme_What is your definition of the Air France-KLM journey?
Anne-Marie_Taking off with an Air France-KLM Group airline must be the first step, promising a comfortable journey, built on a relationship of trust with our staff offering the highest level of commitment and professionalism.
We focus on the customer experience, so that everyone can enjoy an exceptional moment and a truly memorable journey.
This means top-notch personalized products and solutions, embracing new technologies and sustainable development at every stage of the journey.
Above all, the Air France-KLM journey is also one of trust. While safety is paramount and an absolute imperative, operational excellence is also key to ensuring the highest levels of customer satisfaction.
Lastly, traveling with one of our airlines also means being accompanied by dedicated, enthusiastic and professional staff. To this end, Air France-KLM is committed to the personal development and continuous training of its people, and to the creation of a safe and engaging work environment for everyone. This ongoing skills development guarantees everyone’s professionalism and personal growth; this plays a key factor in the Air France-KLM Group’s success. We also promote and encourage diversity across all our job functions, both on the ground and in the air.
From left to right : Fabrice, David, Sandra, Yassine, Caroline, Marieme
To ensure our customers enjoy an exceptional experience, we offer them personalized care and the very best of everything.
We mobilise all our energy and considerable investment around continuously improving every element of their journey. On both the ground and in the air, we firstly attach a great deal of importance to offering our customers an easy and comfortable journey, together with personalized attention. For example, in December 2018, KLM opened the first part of its completely-renovated and redesigned KLM Crown lounge at Amsterdam-Schiphol. This lounge of the future, intended for customers on international flights, incorporates the latest technological innovation and top-notch personalized services. Respecting the best practices in terms of sustainable construction, it is becoming a destination in its own right and a celebration of Dutch design. As a recognized leader in digital innovation, another priority for Air France-KLM: offer its passengers innovative and personalized services to enhance or facilitate their travel. Thanks to advanced artificial intelligence technologies and machine learning, Air France, KLM and Transavia have, for example, developed five chatbots to help customers choose their next destination, book tickets, track their checked baggage and assist them in the event of irregularities.
Our commitment to customer satisfaction is also reflected in a focus on attentive personalized services, whether big or small. With Transavia, for example, every passenger has access to a comprehensive and varied paid-for meal service to meet their every desire. Air France delights customers with surprises and gifts in each of its cabins: in La Première, Business and Premium Economy, everyone can enjoy an amenity kit, memorable gourmet experiences designed by the greatest names in French gastronomy and on board champagne in all the cabins. At KLM, customers can appreciate the comfort of World Business Class with full-flat seats on all the international flights, savor a new fair-trade coffee on board and sample new varied and personalized menus.
Nearly 10 million
flight information messages sent by Air France-KLM to customers via the socialmedia.
6 800 m2
surface area of the new KLM Crown lounge at Amsterdam-Schiphol, once its renovation is complete in summer 2019 (compared to 3,600 m2 previously).
2 700 000
new members for the Flying Blue frequent flyer program in 2018 (+14% relative to 2017).
« Our Group benefits from more than 80,000 highly talented, professional employees
When I arrived, I was impressed by the very strong bond between the employees and the airlines, and by their commitment and attachment to the brands. I too am an aviation enthusiast, and I am both very happy and very proud to lead a group like Air France-KLM, which has three extraordinary brands: Air France, KLM and Transavia. Our Group benefits from more than 80,000 highly talented, professional employees with a wealth of experience. Our people are our first and foremost asset when it comes to facing the challenges of the future. »
--- Air France-KLM highlights the group’s staff.
« Taking off with an Air France-KLM Group airline...
« Taking off with an Air France-KLM Group airline must be promising a comfortable journey, with our staff offering the highest level of commitment and professionalism
Taking off with an Air France-KLM Group airline must be the first step, promising a comfortable journey, built on a relationship of trust with our staff offering the highest level of commitment and professionalism.
Above all, the Air France-KLM journey is also one of trust. While safety is paramount and an absolute imperative, operational excellence is also key to ensuring the highest levels of customer satisfaction. Lastly, traveling with one of our airlines also means being accompanied by dedicated, enthusiastic and professional staff. »
--- Air France-KLM highlights the group’s staff.
« A lounge combining personalization and digitalization...
« A lounge combining personalization and digitalization
The new KLM Crown lounge offers our World Business Class and most loyal customers a truly exceptional experience. Our ambition is to create the best lounge in the world and a destination in its own right. To this end, we developed a concept that combines personalization and digitalization. We have recruited and trained staff who are equipped with tablets to proactively approach our customers and offer on-the-spot service. This replaces the current reception desk where customers queue for assistance. We also offer an outside terrace with a breath-taking view of the runway. With Blue, our gourmet restaurant and bar under the signature of Michelin-starred Chef Joris Bijdendijk, customers can enjoy breakfast, lunch and dinner in a luxurious setting in return for a fee. »
A personalized welcome, elegant ambience, attentive service, exquisite cuisine… La Première embodies an exceptional, bespoke experience for all our customers. My role? Define the products and services that enhance this experience and coordinate their implementation with all the relevant teams: lounge, call center, cabin crews and the dedicated sales service. To offer perfection before, during and after the journey, we have, for example, developed a training course mobilizing all the teams intervening in La Première flights, both directly and indirectly. Whether they work on the ground or on board the aircraft, they thus share the same level of rigor and the same attention to the slightest detail. »
« We want to be the most innovative low-cost carrier
Online travel agencies, flight comparison websites, Google flights… Our customers book their flights using increasingly diverse channels. Creating a strong brand preference is thus currently a major priority for Transavia. With my team, I can make a contribution by proposing high-added-value content across all our digital media. For example, we are developing numerous informative and fun videos for young adults. In 2018, thanks to machine learning, we took a big step towards even-more-personalized communication, to offer every customer the right product or service, at the right time and via the right channel. »
« Improving flight times and fuel efficiency thanks to tools...
« Improving flight times and fuel efficiency thanks to tools
As a flight captain, operational efficiency and the related customer satisfaction is a focus for my profession. To optimize them, while guaranteeing flight safety, I play a role of orchestral conductor: by managing my on-board team as closely as possible to the planned schedule and coordinating all the players, I can improve punctuality.
Before the flight, I also verify that my route and fuel choices are appropriate, thanks to digital tools including highly precise weather information. During the flight, new tools enable me to adjust my trajectory in complete safety, while also reducing the aircraft’s energy consumption and our environmental footprint. »
Helene de Melo
« Increased synergy between all our professions...
I am responsible for behind-the scenes management of aircraft arrivals and departures, to ensure that everything goes according to plan. Since February 2018, a new operational policy has enabled the various ground players involved in the preparation of an aircraft – known as “ground-handling” – to work more effectively. Our real-time communication tool enables us to track the ground-handling process. Like with a chat, on a live basis, everyone can view and input the messages indicating the status of the different stages, like “OK, last passenger boarded”. This gains us precious minutes. We are thus all working with one sole aim: on-time aircraft departures. »
« On the ground too, our equipment is becoming cleaner...
« On the ground too, our equipment is becoming cleaner
To reach a 100%-electric fleet of ramp vehicles, we need to respond to two challenges. Firstly, the offer of vehicles of this type is still limited. To remedy this, I work in synergy with the manufacturers, to explain our needs. The result: in 2018, KLM thus brought into service a highly-efficient, new generation electric freight loader. Another challenge: the time required to recharge electric ramp equipment and the fixed positions of the airport chargers. On this point, I am working closely with the Amsterdam-Schiphol teams to deploy these chargers in strategic areas, while making the related adjustments to the electricity network. »
« A simpler and more consistent travel experience...
With Simplicity, we are looking to harmonize and simplify our offer on the long-haul network. Within the space of a few months, we have also undertaken an in-depth review of our flight schedule to make it easier to understand. A terrific collective challenge! For example, our La Première cabin is now offered at least once a day on 17 destinations, always at the same times. In time, we want to assign a precise aircraft type to each destination. We are also supporting the move up market on intensely-competitive regions like Asia and North America. In time, a daily flight to each destination should be operated in the Boeing 777, equipped with the latest long-haul travel cabins, from which Bangkok, Minneapolis and Toronto already benefit. »
My role involves promoting the unique advantages of our joint-venture with customers, notably the scope of its network between Europe and North America. I support Delta marketing campaigns through the media, social networks and in-house channels, to promote the joint services of our transatlantic partnership to our common customers. We also plan to create an expanded joint-venture with Virgin Atlantic, to offer our customers even more choice. »
As a Purser, I especially enjoy the inaugural flights to new destinations. When planning for these flights, I work side by side with the sales and marketing team. I organize on-board entertainment like games with airline tickets as prizes or a special complimentary catering service with champagne and macaroons. It is my job to stay closely in touch with passengers and their needs. But by enabling them to discover a new destination I have the impression of going still further and living precious moments with them. »
« The aircraft of the future is a collective history...
« The aircraft of the future is a collective history
Within the CORAC, we contribute the Air France perspective as a user and customer of the future aircraft generations by considering both its maintenance dimension and the environmental impacts of the R&D programs. Embarking alongside representatives from the aeronautical industry on a shared innovation dynamic is a fascinating experience. The work is focused around major areas like the energy optimized aircraft and the connected aircraft. With the disruptive innovation to come in after 2035, the whole aeronautics industry is set to benefit from the aircraft of the future which is even more sustainable, offering an ever-more-innovative on-board service. »
« A real asset in guaranteeing the integrity of the cool chain...
« A real asset in guaranteeing the integrity of the cool chain
Our Cool Chain activity concerns the transportation of pharmaceuticals and fresh products, two markets that are seeing strong growth. The reach of our network globally and the reinforced complementarity of our two European hubs constitute a real asset when it comes to guaranteeing the integrity of the cool chain. We are also deploying a continuous quality improvement program, leveraging all the power of digital tools. For example, Temp&Track enables our customers to know the location of their freight in real time and the conditions in which it is transported. »
« Predictive maintenance: aircraft more available...
Since the launch of our predictive maintenance solution PROGNOS® in 2015, we have been able to predict – and thus avoid – 110 breakdowns on our Airbus A380 fleet, thereby enabling a substantial financial saving and better availability of the fleet. In 2018, we extended PROGNOS® to other aircraft types like the Boeing 777 and, more recently, the Airbus A320. The positive results have also prompted interest in PROGNOS® from numerous airlines outside the Group. »
« Our Group benefits from more than 80,000 employees...