Change at Af Klm Essay

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As a frequent flyer on Air France, I would like to take the opportunity to analyse the change program that occurred in 2004 with the creation of the Air France KLM group. This paper will focus on the justification of the change, how it was implemented and the associated strategy, and then, we will compare the program objectives with what really happened, and will finally try to highlight some lesson learnt from the analysis. Let’s start with a short introduction, to present Air France and its history since its creation. Air France was founded in 1933 (7th of October). In the 60’s, Air France came into the international market with a famous plane: the Caravelle, being engaged in the trans-Atlantic lines between Paris and New York. During the global oil crisis between 1973 and 1979, the company faced several problems. After having acquired UTA and Air Inter early in the 90’s, on the 19th February 1999, French government confirmed the Air France's partial privatisation, and thus, its shares were listed on the Paris stock exchange 3 days after. In 2000, the SkyTeam alliance was founded with several air companies’ partnerships (Air France, Aeromexico, Delta, Korean Air) and became one of the major global airline alliance. In 2003, the mergers announce between Air France and KLM was made. The merge became reality on the 5th of May 2004 resulting into the largest European airline group. Air France KLM is a company with 25,63 billion Euros revenue in 2012 (2012 annual report, p.12 and 13). The group acts on 4 majors activities: passengers, cargo, maintenance and other business (regrouping the leisure and catering business). Figure1: AF-KLM 2012 revenue split for 2012. Why the merge? Air France and KLM have evolved in the airline industry market that became extremely competitive because of several facts: US deregulation initiated in 1978 with the

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