Published On: Mon, May 14th, 2018

The Netherlands refuse to buy AF-KLM shares

KLM_AirFranceTHE HAGUE - The Dutch Minister of Finance Wopke Hoekstra has said that the government of the Netherlands does not plan to buy equity in Air France-KLM despite the growing concerns about the group’s future and reported frustration at the financial imbalance between KLM Royal Dutch Airlines and Air France.

The statement results from the ongoing wave of strikes at the French unit of the holding and the resignation of the group’s CEO Jean-Marc Janaillac. On May 4, 2018, he announced that he will quit after the carrier’s staff rejected the newest salary increases proposal, demanding faster raises.

Hoekstra had consulted his statement with his French counterpart Bruno Le Maire.

In the first quarter of 2018, Air France posted a EUR178 million euro (USD211.6 million) operating loss while the Dutch unit posted a EUR60 million euro operating profit.

The continuing imbalance between the French unit, engulfed in labour disputes, and KLM whose pilots last staged a walkout in 1995 has reportedly created a serious frustration on the side of the Dutch employees. According to Bloomberg, KLM is pressing for a change in the group’s management structure in order to gain more leverage.

Ever since the merger of the carriers in 2004, the group’s CEO has always been French with the role of a vice-chairman reserved for a representative of KLM.

Currently, the Dutch government is not listed among the shareholders of Air France-KLM whose holdings exceed 5% of the stock. In contrast, the French state is the largest single shareholders and holds a 14.3% stake. Delta Air Lines and China Eastern Airlines each own a 8.8% stake.

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