Logistics

‘Air France-KLM not studying Air India disinvestment programme currently’

Ashwini Phadnis New Delhi | Updated on October 11, 2019 Published on October 11, 2019

Welmer H.T. Blom, Senior Vice-President, Commercial, Sales and Marketing, Middle East, Gulf and India, Air France-KLM

The Air France-KLM combine “is not studying the Air India” disinvestment programme, Welmer H.T. Blom, Senior Vice-President, Commercial, Sales and Marketing, Middle East, Gulf and India, has said.

“At the current moment we are not studying this disinvestment,” he told BusinessLine on the sidelines of an event to mark 100 years of KLM on Thursday night.

Edited excerpts:

The Air India disinvestment is coming up. Is that something the Air France-KLM Group will be interested in?

At the current moment, we are not studying this disinvestment.

Given that India is a growing market, you will get access to many new stations, so isn’t bidding for Air India an exciting prospect?

If you say it like that (then) yes. India is a strategic market for Air France-KLM. We have shown our commitment to India based on the fact that we have increased our capacity by 30 per cent this winter. We have introduced Bengaluru as a new destination this winter. India is key for us. That is why we joined Jet Airways. That turned out a bit different than we expected.

Air India is something different. For Air India you need deep pockets and you need to change a lot. The privatisation of Air India has been on the table a long time. We at Air France-KLM do not see that as the right way forward for India.

Given the current conditions, we are not on the table. I will not exclude anything for the future. But it is not logical for the Air France-KLM strategy now to move forward to sit on the table for a discussion on investing in Air India.

What impact has Jet Airways’ ceasing operations had on the transfer of traffic between Europe and the US, which was being ferried on Jet Airways?

It has had a huge impact. You cannot imagine how much impact it had for us. India is a strategic market and we chose Jet Airways as our strategic partner. We were cooperating with Jet Airways for over 25 years. So Jet Airways for us was the logical choice. It moved its operations from Brussels to Amsterdam, which accelerated the cooperation. It was very profitable for Jet Airways to fly into Amsterdam.

I feel very sorry for Jet’s 17,000 employees. I do not think they saw it coming. We did not see it coming.

Please realise the way we built together, 50 per cent of our capacity to Charles De Gaulle in Paris and Amsterdam, which was served by Jet Airways, and the remaining by Air France-KLM. Three widebody aircraft arriving every day in Schiphol (Amsterdam), bringing Air France-KLM and Jet Airways’ passengers to our hub.

On April 16 it was gone. 80,000 passengers with Air France-KLM tickets suddenly did not have flights anymore. We had to re-accommodate them on our flights. We increased capacity by adding flights, bigger aircraft. But as a scheduled airline, you only have a limited number of aircraft available.

This winter we have increased our capacity by 30 per cent and we are flying to Bengaluru.

Given that only Air India has wide-body aircraft, does that logically mean you will have to tie up with a low-cost Indian airline to increase your feed into and out of India?

We all know the aviation landscape in India. There are not that many potential partners. Theoretically, Air India could be a potential partner as it has wide-body aircraft. At the same time, there are some other aspects of Air India’s business which make this difficult.

Being forced to (opt for) low-cost is not necessary. All Indian airlines have international ambitions. They want to expand to Europe, so they could be partners. We are exploring our potential partner. Air France-KLM will like to have an Indian partner just to make sure we have feeds to our gateways in India such as Delhi, Mumbai and Bengaluru, and we also have beyond traffic and leading traffic into these gateways.

The Indian market is huge. It is 1.3 billion and just a small percentage of them flying.

So, you do not rule out tying up with a low-cost Indian airline?

We do not rule out anything. We look at opportunities.

Published on October 11, 2019
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