Vishal Patil and Irma Fubiani, Delegates of the TBS Aerospace MBA FT18 program did attend this event on May 12th, 2017. Here is their report.
AF/KLM Fleet
As of December 2016, the AF/KLM Group had 520 Commercial Aircraft, composed as follows:
Which makes us better understand the market they serve and the number of aircraft destined for each segment.
KEY DRIVERS
- Improve customer experience
- Economic and operational efficiency
- Adjust to Group’s financial performance
- Maximize fleet flexibility
- Manage long-term value of aircraft
Strategy
Medium Haul Aircrafts are split pretty evenly between airbus A318/19/20/21 family with 117 aircraft and Boeing 737 family with 11 airplanes.
Low cost carriers tend to have one type of aircraft to minimize the expenditure on spare parts and training. When we asked Mr Bertrand what were the benefits of having multiple brand aircraft versus costs, he said “competition is good”- it seems that for flagship carriers such as Air France who has its MRO division, the price savings when purchasing aircraft outweigh the extra money that low cost airlines save on.
“Additionally, aircraft are different and suit different needs”.
FLEXIBILITY
Purchase/Lease decisions are key to fleet management and flexibility. An engagement to purchase an aircraft – an expensive and long-term investment- needs certain tools to adapt as quickly as possible to economic cycles and other market shocks.
TOOLS
- Operating Lease extension/phase out
- New aircraft delivery rescheduling
- Option Exercise
- Aircraft purchase or sale
FINANCIAL TARGETS
- Purchase aircraft with cash flow
- Reduce the number of Operating Leases in Fleet (currently 44% of LH fleet is leased)
Congratulations on another USAIRE South West successful and interesting event!
Additional key information (provided by Dr. Cordula Barzantny):
– Overall, Fleet Management is less a science than pragmatism & Experience
– The environmental impact is a first-order concern for fleets and legacy carriers like AF-KLM, therefore they need new aircraft at the leading edge in ‘clean and green’ technology.
– About 44% of the long-haul fleet is leased. The Target: Finance the aircraft with cashflows.
