DID KLM SNOOKER AIR FRANCE?

     Call it what you will, as the spin doctors are out in full force to get the deal done by next April, that Air France/KLM “alliance” is really Air France acquires rival KLM, a move creating one of the world’s largest airlines.
     Air France and KLM, Europe’s second- and fourth-largest all by themselves, unite as part of the same corporation, replacing British Airways as Europe’s biggest airline, and in fact, when the dust settles and the deal is done, AF/KLM will be the world’s third largest carrier behind American and Delta.
     But if AF stock will make KLM stockholders rich, why stop short of a full merger?
     The thinking is that sooner or later when bi-lateral agreements between the Netherlands and international destinations are worked out, (which is the best reason to keep a “separate KLM”), the carriers might, “go all the way.”
     A French union boss named Yvon Touil, who sits on Air France’s board, told reporters he voted against the merger echoing a sentiment that goes: “Who needs KLM?”
     He said essentially that AF, now one of the financially stronger airlines around, gave up too much to a debt-ridden KLM that might have fallen down all by itself, much in the same manner as Swiss Air and Sabena did during the past few years.
     Certainly the revelation that KLM net worth is only a bit more than $900 million USD is a surprise.
     The price “is exorbitant. We are overpaying. It is too expensive,” said Touil, of the Communist-linked CGT union. “Everyone on the board underlined—even the people who voted in favor—that the financial risk is enormous.”
     The KLM/AF deal is a first between major European carriers.
     Just like everywhere else, in Europe the “new normal” environment for business is being impacted by among other things, the no-frills operators like Ryanair and easy Jet, who are making enormous inroads gaining traffic that once were bread and butter to the government carriers.
     KLM and Air France will combine where they can as they look to reduce costs.
     A board made up of people from both airlines will decide upon big purchases like new aircraft.
     For its part, KLM’s old flame and current alliance partner Northwest Airlines seemed pleased.
     “We welcome the announcement as it is consistent with KLM’s long-held view that it needed to partner with a larger European airline,” said NWA.
     “The announcement indicates that KLM will strengthen its market position in Europe and protect the interests of its stakeholders and its hub at Amsterdam’s Schiphol Airport.
     “Northwest’s and KLM’s trans-Atlantic joint venture, the airline industry’s most advanced alliance, will continue in place pursuant to the long term agreement between KLM and Northwest. “Northwest will continue to serve Schiphol Airport as its main European hub.”
     Industry watchers will recall KLM lending NWA about a half a billion USD and more in a decade-long attempt to gain control of the U.S. airline, a mis-adventure that reportedly eventually cost KLM’s Peter Bouw (now CEO of Swiss) his job atop KLM.
     For its part Air France, after a billion dollar bailout from the French government a few years back, righted itself after years of losses and labor strife, through aggressive cost-cutting, enlightened management, and a fruitful alliance with Delta Airlines.
     The AF/KLM merger will need further approval by European Union as well as labor at both airlines, although at this point that seems fairly certain.
     As to the charges by that AF board member, you can’t help but wonder.
     KLM has been trying like crazy, since Jacques Ancher ran the cargo business at the carrier for at least a dozen years, to enlarge itself through mergers and acquisitions, although until AF popped into the picture, British Airways was most often mentioned as KLM’s first choice for partner.
     “KLM/BA never could decide which head would wear the crown,” a source said.
     More than seventy five years ago as KLM went into business, the Dutch carrier’s first international service was live animal cargo to London, when the airline carried a cow aboard a Fokker F-7 flight.
     At one point KLM was also said to be close to a deal with Alitalia.
     Interestingly, AZ is mentioned as partner in this merger although in what capacity is not entirely clear as this is written.
     “KLM wanted to go full tilt a couple years ago with Alitalia.”
     “But what happened in part was that the Calvinist Northern Europeans and the Catholic Mediterranean Europeans have a different take on life.
     “They (KLM/AZ) had trouble deciding whether to have meetings in the morning or after lunch.”
     For air cargo the AF/KLM combination is solid on paper. KLM has always enjoyed a top-notch reputation in cargo and has recently taken delivery of a new B747-400 freighter. A second is due to arrive next year.
     Air France also with a strong culture for cargo, operates several B747 freighters on worldwide routes.
     Northwest, with its lucrative Pacific routes fields 12 B747F’s, but competes with AF SkyTeam Partner, opportunistic Korean Air Cargo, across some sectors.
     “Sky Team has still got to get itself straightened out to be considered anything more than a big combination that has performed below expectation,” a well-placed source told FlyingTypers.
     “The addition of KLM and possibly NWA Cargo to the Sky Team Cargo product can only make it better.

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Dora Kay is no half pint in a ten gallon hat as Calgary Airport’s Garth Atkinson and Sgt. Preston of The Yukon bookends get TIACA nod for 2006.      It’s no secret that we have not always been in love with the way some air cargo organizations operate. In the first place we have always been suspicious of a criteria for membership based on how much an individual or company is willing to pay. Also like Groucho Marx, we would not want to be a member of any organization that would have us as a member. If that admission is too much, we are very comfortable knowing who and what we are, thank you But we sure are crazy about Dora Kay, the current President of TIACA. Actually whoever is in charge, when the TIACA dog and pony show called “The Forum “rolls into town, automatically gets the job as president of the org. for the next few years. So, when Hong Kong hosted TIACA in 2002, Dora stepped up to the plate atop the group where she has been ever since. But make no mistake about it, Dora Kay is no slouch. Her title at TIACA isn’t just window dressing. September 25 when she ventures into JFK and speaks as both the top executive at TIACA and the cargo marketing director at Hong Kong International Airport, people at the big airport and all around the transportation business in New York should pay attention. Dora Kay brings to air cargo what this business needs right now. She is smart, beautiful, willing to learn and to share and, as the slightly delirious photo elsewhere on this page underscores, Dora Kay seems to be doing what most of the rest of air cargo has forgotten about. Dynamic Dora, the first female chieftain of any world cargo organization, above all, seems to be having a good time. A sense of purpose balanced with the joy of living could very well be the kind of leadership air cargo could use right now. “Dora Kay At JFK” includes a soft drink, or even better still, an adult beverage, plus a certainly not soon forgotten Holiday Inn JFK Blue Plate luncheon special. Tickets are going fast. Contact: Gerry Kash, (718) 995-9178. Gerry The Great, is an alumnus of TMA. If you get him on the phone he can tell you all about the legandary all-cargo carrier of Beirut back in the wild and wooley 1970’s.

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BALI KEEPS ITS EYE ON THE PRIZE

     Sept. 29-Oct. 3—FIATA WORLD CONGRESS, Bali Int’l Convention Center, Bali, Indonesia.
     Missed the July 2003 regional conference?
     Relax, and not to worry.
     FLYINGTYPERS offer no charge, second chances at a place where the words “air cargo spoken here,” will be delivered like velvet.
     Just a few moments aboard www.fwc2003@indosat. will straighten out any doubts or questions that you might have.
     Created by The International Federation of Freight Forwarders (FIATA), the 2003 Congress (www.fiata2003.org ) according to Chris Kanter, President of INFA (Indonesian Forwarders Association), will be highlighted in the Bali International Convention Centre, Nusa Dua, Bali.
     “We have put together an attractive program with well-known speakers to provide an opportunity for everyone to engage in open discussion around the theme:
     “The Role of the Forwarders in Logistics and Supply Chain.”
     In addition, there will be networking galore in an area featuring the latest advances in equipment and technologies.
      “Available on a first-come, first-serve basis, the series of 54 booths will be set up in the Exhibition Hall of Bali International Convention Center.
     “The Organizing Committee, has framed an expansive social and educational program, offering attendees the chance to get more acquainted with, and enjoy the proverbial Balinese hospitality, the splendid scenery and magnificent Balinese art and culture.”
     “SELAMAT DATANG”!
     (Welcome, says Chris Kantar)
     What’s that you say?
     You’d rather stick your hand in the toaster than travel to Indonesia?
     Believe it or else, there is much more opportunity than risk today in Bali, Indonesia.
     Indonesia is a country with the largest Muslim population on the planet. Soon Indonesia could also be the largest Muslim democracy on earth, a beacon of hope in a brave, new world.
     Although terrorist activities, such as occurred recently, speak otherwise, a closer look reveals that Indonesia is experiencing incredible change.
     If she succeeds, and the recent tragic bombing of the Marriott in Jakarta, as well as last October’s disaster in Bali are meant to derail that inevitability, Indonesia as a democracy would be a gold mine.
     Here, for the 21st Century, would emerge a peaceful, prosperous place; a fantasy of commerce and culture, able to achieve heretofore unknown levels of advancement not only for business, but also for an entire nation.
     Jakarta has been on alert since Islamic terrorists killed more than 200 people in Bali last October.
     More recently as threat levels have risen, all manner of security has been installed including metal detectors at airport and hotels.
     But even more to the point, the vast majority of the people in this enormous nation is sickened and outraged at these “massacres for headlines,” and is fairly clamoring for change.
     That reality by the way scares hell out of the terrorists.
     On the economic front the Rupiah has recovered from the 1997 Asian financial crises.The Jakarta Stock Exchange is once again attracting investment.
     Even the hard-boiled Chinese business community, vital to a robust economic engine, that had fled out of the country in droves is once again returning.
     Ahead of the elections a free press and independent political parties have found firm ground on which to grow and develop.
     The plea that Indonesia’s current ruler made on Friday August 7, entreating all countries in the region to band together against extremism and the terrorists, were not empty words.
     Jakarta and an entire nation by and large, are sick to death of the upheaval.
     Indonesian authorities are hounding Jemaah Islamiyah, the extremist group linked to Al Qaeda that is suspected in the Marriott and Bali attacks.
     Indonesia put on trial the Bali bombers and their spiritual leader, Abu Bakar Bashir.
     The guilty decision rendered on Thursday (8/6) against one man, accused of helping to plan and carry out the Bali bombings, sends a clear message that the Indonesian law will not be subverted.
     As this is written, the Bali FIATA World Congress continues, scheduled as planned.
     We hope that this important conference stays the course and goes forward.
     Air cargo and transportation as a vital force of the new millennium, can gain a first hand window to opportunities unfolding all around, September 29-October 4 in Bali.

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Gittens Gallogly      Speaking of a tough market, later this year as Air Cargo Americas is held in Miami October 29-31 www.aircargoamericas.com, some attendees are certain to be drawn from the biggest pool of unemployed cargo executives in history. Layoffs are continuing at an alarming rate as airlines in continued rounds of cut and slash desperately attempt to right their sagging fortunes.      Glam operators like Emirates that will bounce into the Radisson Center with its Dubai Inc. “village” of several booths arranged with hospitality and beautiful flight attendants, silver platters filled with dates, figs and piquant teas, can expect an industrial relations windfall. And why not? Miami World Trade Center’s Charlotte Gallogly has picked up this show that originally started as an every other year alternative to TIACA fests, and has firmly placed ACA as the biggest, most important air cargo trade show in the world.      Set to be a big part of ACA this year is Miami Dade Department of Aviation chief Angela Gittens. Angela, who is not only a powerful woman executive, she is also a powerful black female executive, was given little chance of succeeding at MIA after taking over from Gary Dellapa, a couple years ago. But guess what? Not only has Angela succeeded, but also amidst threats to her job by the local politicians, Angela turned those threats to ashes when a large group of professional transportation executives at Miami International Airport including the great Dick Haberly, Bill Spohrer and others backed her up.      Angela, who is our candidate for “Top Airport Executive So Far” in the 21st Century, may be worth the trip to Miami this autumn.