Airline wants EU to pay for ash-cloud damage
Air France-KLM airline company posted record losses on Tuesday. KLM's CEO, Peter Hartman, explains how he hopes to deal with the trouble ahead.
Air France-KLM is in trouble. The company is haemorrhaging money and seems unable to stop. It feels duped by the authorities, which have been banning many flights because of the volcanic ash cloud emanating from Iceland, and it has to watch in constant horror as its bargain-basement competitors, such as Ryanair, continue to grow.
You have done a poor job.
"This interview is over. That goes without saying, doesn't it? Of course we aren't doing as well as we would like to. Last year was a very bleak one for us, thanks to the economic crisis. But who is doing well in our industry?
Lufthansa? The German airline posted a loss of 'only' 112 million over 22 billion euros in revenue.
"That is true. Lufthansa is doing better. But British Airways on the other hand, is doing much worse than we are."
What are you doing to cushion the blows?
"The sector's answer is further consolidation and increased cooperation. We have initiated joint ventures with Delta Airlines and Chinese airliners. We have also cut costs on our own: we spent 10.5 percent last year, without any forced lay-offs.
Has the volcanic ash crisis been solved?
"No, it will return. If we continue down our current path, an entire industry will end up in the ditch. On Monday, air traffic was shut down for half the day for no reason whatsoever, and Tuesday was a close call. The [Dutch meteorological service] KNMI called to inform me that a suspicious ash cloud was hovering over Northern Ireland and that another closure of airspace was being considered. I became livid, and was finally able to convince them that nothing was wrong, because nothing was wrong. Planes that flew through ash-covered areas last Monday weren't bothered in the least. Ever since the [Eyjafjallajökull] volcano erupted, some 190,000 flights have crossed Europe and not one of them has shown even the slightest trace of ash.
On Tuesday, Air France-KLM published its annual report covering the 2009-2010 budget year. The company posted a record loss of 1.56 billion euros, almost twice as much as last year. Turnover dropped 15 percent to 21 billion euros. Because Air France-KLM's budget year ended on March 31, the figures do not show the effects of the volcanic eruption that wreaked havoc upon European air travel in April and May.
Annual report
Do you feel powerless?
"Sometimes. Europe is too tightly regulated. In other parts of the world, like the US and Asia, the response to volcanic eruptions is far more relaxed, and they don't see any accidents caused by volcanic ash either. But I have the feeling that we are making progress in Europe. The first time, Europe's entire airspace was closed down. The second time only parts of it were. Now it is time to enter the third phase, where airline companies can make air safety decisions for themselves. But authorities and meteorologists in a number of countries – I won't mention any names - are not yet ready to mend their ways."
What do you mean exactly?
"They maintain that, from the beginning, the ash clouds were dangerous. Because if it turns out they were wrong, they fear they will be liable for massive amounts in damages."
Will you be asking for help in Brussels?
"Yes, you cannot call this a normal business risk any more. A volcanic eruption is a natural disaster and there are EU schemes governing compensation that we would like to make use of."