Air France 2007 Annual Report Download - page 13

11
2006-07
This year the merger between Air France and KLM
celebrates its three-year anniversary. What is your
view of the results of this first phase?
Jean-Cyril Spinetta : This first phase demonstrates the
success of our merger and the benefits of our profitable
growth strategy. Since 2003-04, our revenues have been
multiplied by a factor of 1.3 and our operating income by
3.4 despite a significantly higher fuel bill. We have thus
created value both for the Group and for our
shareholders, the share price having increased by a factor
of 2.5 and the dividend having more than trebled.
These excellent results place us at the head of the airline
sector. They are helped by the strong economic situation
but are also due to the fact that we have won market
share from our main competitors thanks to the strength of
our combined networks and their ability to attract new
customers.
Finally, both Air France and KLM launched extremely
effective cost cutting programs, producing a significant
improvement in our productivity. We have thus built very
sound foundations for continued progress.
Leo van Wijk : We have also improved our customer
service, particularly in terms of punctuality and
competitiveness and have succeeded in maintaining a
high degree of employee confidence, which constitutes an
excellent starting point for the next phase.
At the end of this three-year period you decided to
replace the Strategic Management Committee with
an Executive Committee. What are the reasons for
this?
Jean-Cyril Spinetta : At the time the Group was
created, we opted to establish a pragmatic organizational
structure regrouping four directors of Air France and four
from KLM within a Strategic Management Committee.
These three years of work in common gradually created a
team which felt responsible for the interests of the Group
as a whole and not only those of each of the companies
individually.
With the establishment of an Executive Committee,
we would like to extend this sense of belonging to one
group to a wider circle. The eleven Executive Committee
members will exercize responsibilities at the level of
Air France-KLM while retaining their functions within
either Air France or KLM.
This new management structure, which will speed up the
decision-making process, will allow us to realize our
synergy potential of more than one billion euros by the
end of 2011 and, through sustained cost control efforts,
to continue to improve our financial performance and our
return on capital employed. We are determined to achieve
this, and our target is to increase this ratio to 8.5% by
2009-10.
This year the European Union and the United States
signed an “open skies” agreement. Does this
represent an opportunity for the Group?
Jean-Cyril Spinetta : The “open skies” agreement
between Europe and the United States is an important
step for our industry since, for the first time, the concept
of a European airline is recognized and nationality is no
longer the exclusive criterion for the allocation of traffic
rights. This development further strengthens our strategic
aim of creating, with Air France and KLM, the leading
European air transport group.
Interview with
Jean-Cyril Spinetta
and Leo van Wijk