(Yicai Global) July 7 -- KLM Royal Dutch Airlines’ global destinations have almost returned to pre-pandemic levels this year and the carrier is determined to emerge stronger from the crisis, the chief executive officer of Europe’s biggest airline told Yicai Global in an exclusive interview.

KLM has resumed 90 percent of its worldwide network, numbering some 200 destinations, at 60 percent seat capacity and 40 percent of passengers, said Pieter Elbers, who is also president of the carrier. At present, KLM is focused on expanding its network to markets that are recovering faster, such as the intra-European travel and leisure sectors.

“In order to achieve our goal of emerging stronger from this crisis, we have to keep investing in sustainability and an even better product. For example, 14 Boeing 737-800s have had a cabin makeover with lighter seats installed, some new 777-300s were put into service and wi-fi has been introduced on European flights,” he said.

Last year the travel restrictions imposed due to the Covid-19 pandemic brought the world’s airline industry to its knees. KLM’s passenger numbers shriveled by more than two thirds in 2020 from the year before to 11 million.

“KLM's turnover fell by 54 percent year on year to EUR5 billion (USD5.9 billion) in 2020 and as a result the airline racked up losses of EUR1.2 billion, despite much better returns from its freight business due to a big jump in the demand for cargo capacity,” Elbers said.

To survive the crisis, last July the Dutch government and banks lent KLM EUR3.4 billion to keep it afloat. “KLM's ambition is not only to repay these loans, but also to remain an important and responsible player in the airline industry. KLM is therefore becoming smaller, with a lower cost base, more economical, more agile and more sustainable," Elbers said.

China Market

Amstelveen-based KLM currently operates five round-trips a week between China and Europe on three different routes, the most by any carrier.

“China is a very important market for KLM. I am happy to say the performance of our China routes is good. It is encouraging to see that the domestic aviation market in China is back to pre-Covid-19 levels,” Elbers said.

“There will be a gradual reopening of borders, starting with countries that have the virus under control or have a good vaccination roll-out. Of course, we are looking forward to a more flexible policy that enables us to increase the number of flights to/from China in a safe and responsible way,” he added.

M&As

Flybe, once Europe’s largest regional airline, went under due to the fallout from the pandemic. Many other airlines are shedding staff. Some analysts believe the outbreak could be an opportunity for the consolidation of Europe's aviation industry.

Some airlines may fold, Elbers said. Europe will follow the US example and end up having three large airline groups with some low-cost players. But this won’t happen overnight.

“Acquisitions are not top of my mind right now – all airlines are busy getting solid ground under their feet and are working on recovery, not expansion by mergers. Also, when you receive state support, as is the case with many airlines in Europe including KLM, you are not allowed to enter into big mergers,“ Elbers added.

Editors: Liao Shumin, Kim Taylor