Free «Royal Dutch Airlines» Essay Paper

Introduction

Royal Dutch Airline (KLM) is the flag carrier airline in Netherlands. In 2004, it merged with Air France and they formed France-KLM. Examples of its fleet include Airbus A330-300,  Boeing 737-900,  Boeing 777-300ER and Boeing 747-400. Its current president is Peter Hartman.

History of KLM

Albert Plesman founded KLM on 7^th October 1919. It started offering flights to destinations such as Rotterdam, London, Paris, Brussels and Amsterdam in 1926 (KLM, 2012). It opened its headquarters at Amstelveen located at the south of Amsterdam in 1971. It has been expanding its operations since its formation. In 1989, it acquired 20 % interest North West Airlines of United States. It also acquired 26% shareholding of Kenya Airways. It also renewed its fleet on in 2000 in an attempt of improving the quality of services that it offered its passengers

Management of KLM.

The Executive Committee of KLM is given the task of managing its operations. The President and Chief Executive Officer of this airline is Peter Harman. Managing Directors of this committee are Camiel Eurlings, Erik Varwijik and Peter Elbers. Erick Swelheim is the Chief Financial Officer of this committee (KLM, 2012).

 

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Financial Information of the Company

In the financial year 2011, it recorded an operating loss of 353 million Euros. The operating loss was caused by rising cost of fuel prices (Market Watch 2012). In addition, some of its new destinations performed poorly making the whole group to earn losses. In 2010, it had made a profit of 28 million Euros. The management of this airline decided to adopt Transform 2015 plan in order to boost its future revenues. This plan aimed at reducing its capacity growth plan from 4.7% to 1-2% annually. In addition, it proposed reducing its unit costs by 10% and its long-term debt by 2 billion Euros by the end of 2014. In 2011, the passenger traffic increased by 6.9% while its cargo decreased by 1.2%. It wholly owns subsidiaries such as Martinair Holland N.V., Transavia Airlines C.V. KLM Cityhopper B. V. and KLM Catering Services Schiphol B.V.

KLM Profile

The mission of KLM is to be at the forefront of the European airline industry. It also aims at offering innovative products to its customers that are efficient, safe and service oriented. The mission of this company is also to achieve growth in its profitability making it able to reach its corporate aims and to increase its social and economic development. The vision of KLM is to become smarter that all the airlines in the Industry. KLM has a culture of focusing on the needs of the customer. It has ensured the flexibility of its services to serve both business class and economic class passengers (KLM, 2012). It flies passengers to 152 destinations from Amsterdam. After it partnered with Air France, its destinations increased to 236 in 106 countries. Its head office is located at Amstelveen near Schipol Airport. It also has offices in countries such as Taiwan, China, France, Japan, Britain and Australia.

Employees’ relations.

The working condition of this organization is conducive. It offers fixed monthly salary with an excellent pension scheme. Each employee also receives 8 % percent holiday allowance and end of year bonus. It also offers group health insurance for all its employees, life course saving scheme and salary savings scheme (KLM, 2012). The number of working hours relates with job positions. Ground personnel work for 40 hours each week. The lowest starting salary for an average employee at this airline is $ 48,906 each year. The percentage of employees who are from Emirates is 8 %. They have adopted a trend of employing employees who are not from Europe in order to diversify its culture.

Conclusion

To conclude, this company suits me. It has good working conditions because it offers health insurance to all its employees. In addition, it offers many training programs that will help me to advance my career. Its future profitability is also promising because of Transform 2015 plan that it adopted in order to reduce its losses. Its growth is also strong because of the many destinations that it has and subsidiaries. The starting salary of this company is also good.

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Recommendations

I would recommend that this airline try new emerging routes. It will help it diversify its markets in case the current routes perform poorly. I would also recommend that this company try to cut down its operating costs because they contribute to its overall losses.