Abstract

The case is about the turnaround program of French-Dutch airline, Air France KLM. The airline was formed through a merger of French and Dutch carriers in 2004. The case describes the cross border alliance and the airline’s good performance in the initial years post merger. However, from 2009, the company was struggling to remain competitive in the changing global aviation industry. According to some analysts, the differences in culture and management styles of both Air France and KLM became a hindrance to the realization of the synergies of this partnership. The case highlights the challenges faced by the airline due to increasing fuel costs, competition from low-cost airlines, and the after-effects of the financial crisis. The case discusses “Transform 2015”, the turnaround program adopted by the airline in 2012. It highlights the key measures adopted in the turnaround program. While some industry experts were convinced that the turnaround strategies would help revive the airline, others were sceptical about it. The case ends with a discussion on the challenges that lie ahead of the company.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze the problems faced by Air France-KLM
• Evaluate the turnaround strategies adopted by the airline
• Understand the issues and challenges in turning around a company

Keywords

Turnaround, Strategy implementation, Post-merger integration, Restructuring, Reorganizing, Organizational structures, Holding company structure, Change, Transformation, Transform 2015 Turnaround Program, Global aviation industry