KLM calls for Brexit compromise

Bloomberg

Dutch national carrier KLM said it favours a ‘liberal’ Brexit deal that would maintain maximum access for UK and continental airlines, after announcing plans to double flights to London City airport starting next month.
KLM has held talks with the Dutch government about the split and made clear the importance of safeguarding UK operations, Chief Executive Officer Pieter Elbers said. Britain is the carrier’s second-biggest market with 6 million annual seats on flights to 17 airports including London City, which it will serve eight times each weekday from May 15.
“The delicate balance we need to find here is how we keep the European philosophy alive and yet not create a situation which is going to be bad for business,” Elbers said in London. Discussions with Dutch authorities include “mapping what could be possible scenarios and possible ways to go forward.”
Elbers, whose company is a unit of Paris-based Air France-KLM Group, said that while there is a “goal of best possible access to European markets,” the key issue concerns the legal structures involved and whether Britain will join the European Common Aviation Area or resort to bilateral agreements of the type it last had with the Netherlands in the 1960s.

‘Pragmatic’
The CEO said that Britain had played a valuable role in securing European air-services agreements with outside countries and in pushing for reforms such as the Single European Sky air-navigation zone, and would therefore be missed as a “straightforward, pragmatic” partner. For that reason, he said, Brexit is something “not very much welcomed” by KLM.
Britain is especially important to KLM because of its focus on transporting passengers from around the world via Amsterdam’s Schiphol hub, with 80 percent of the carrier’s customers non-Dutch. It also has more connecting flights from the U.K. provinces than British Airways, whose London Heathrow base is served by a limited number of shuttle services from northern Britain.
Flights to London City will increase from the current four a day as KLM’s Cityhopper arm leases two BAE Systems Plc RJ85 regional planes from Ireland’s CityJet Ltd. to supplement its own service using Embraer SA 190s. KLM resumed City flights in February after an eight-year absence.
The impact of last year’s Brexit vote on U.K. demand has been limited, with only a “marginal” reduction in the number of British travelers, Elbers said. New destinations, including Inverness in Scotland and Southampton on England’s south coast, are performing well and others are planned.

Air France Concern
KLM understands the concerns that workers and politicians have expressed about the unit’s position within Air France-KLM, Elbers said, adding that aviation’s “relevance and importance” within the Dutch economy is “enormous,” supporting 260,000 jobs.
The Dutch arm lifted its passenger tally by 1.8 million people, or 6.4 percent, last year, even as numbers fell at Air France, where strikes prompted the jettisoning of planned cost cuts and led group CEO Alexandre de Juniac to quit.
The carrier has taken delivery of eight out of 21 Boeing Co. 787 Dreamliners on order, while the first of seven Airbus Group SE A350s will join the fleet from 2020, by which time 17 747 jumbos still in service should have been phased out, Elbers said. The last of Cityhopper’s
Dutch-built Fokker 70s will also be retired this
September, replaced by more Embraer planes.