towards smart leadership - klm royal dutch airlines · towards smart leadership smart alliances...

Towards Smart Leadership

Annual Review

KLM

Royal D

utch Airlines 0

7 | 0

8 Tow

ards S

mart Lead

ership

Content


Smart alliances

Network

Corporate Social Responsibility

CO2 reduction

Noise abatement

Relief programs

An interview with Jan Ernst de Groot

Product improvement

Before the flight

During the flight

Transfer and arrival

Passenger Business

Cockpit

Cabin

Operations

transavia.com

Security

e-Enabled

Cargo Business

Air France Cargo-KLM Cargo

New participating share

E-freight

World Cargo City

Engineering & Maintenance

The influence of fleet renewal

Eco-friendly methods

Human Resources Policy

Health and flexibility

Safety culture

Leadership and information technology

Improving our competitive edge

First mover

Ambitions

An interview with Frédéric Gagey

Facts and Figures

3

4

10

11

12

12

14

14

14

15

16

20

21

22

22

24

25

26

26

27

28

28

29

30

30

30

31

31

32

32

32

34

34

35

36

36

37

37

38

40

44

Part 1 – Reputation Policy

Part 2 – Operations

Part 3 – Finance

Introduction Annual Review 2007/2008

An interview with Peter Hartman

07 | 08 Smart Leadership Annual Review2

Annual Review Smart Leadership 07 | 08 3

Introduction

In fiscal 2007-08*, the KLM Group transported more than 23.4 million passengers and

657,022 tons of cargo.

KLM earned revenue to the sum of more than 8 billion euro, at constant exchange rates,

growth would have amounted to 7.2%. This growth may be largely attributed to increa-

sing passenger traffic. Expenses increased by 2.6% to more than 7 million euro (+6.4%

at constant exchange rates), mainly due to soaring fuel costs. Transport revenues from

transavia.com improved by almost 8% to 622 million euro and income from maintenance

for third parties amounted to 464 million euro, representing an increase of 4.8% (+10.7%

at constant exchange rates) and including the work performed for Air France.

In the year under review, KLM added seven new destinations to its network, bringing the

total number to more than 250.

This report reviews the factors underlying these results – how they were achieved and

what strategy will be pursued in the years ahead. One key area of attention in 2007-08

was the further substantiation of KLM’s Reputation Policy, which was introduced in the

previous fiscal year.

The first part of this report focuses on the three cornerstones of KLM’s Reputation Policy,

namely Smart Leadership, Corporate Social Responsibility, and Product Improvement.

The second part of the report offers an in-depth review of operational developments in

the past fiscal year, while the third part looks at financial developments.

(* like most other airlines, KLM’s fiscal year runs from April 1 through March 31 of the next

year)


Peter Hartman took over as President & CEO of KLM on April 1,

2007. In this interview, he looks back on his first year at the helm.




“In many respects, it has been a fantastic year for KLM, with results exceeding expectations on virtually every front – so it has been great for me, too. It has been an incredibly exciting year, full of major organizational changes: a new, flatter management structure within KLM, a new management structure for AIR FRANCE KLM, further large investment in fleet renewal, a whole new range of ICT projects, as well as new products and f urther product enhancements.

We conducted intense, constructive dialogue on all these changes with our employee participation bodies. I am very proud to report that, despite the many external and internal changes, we succeeded in maintaining a high level of operational performance. It’s been business as usual throughout the process, and for this I extend my compliments to the entire organization.

“A wonderful and exciting year”How would you describe your first year as KLM President & CEO?


Once again, we teamed up with Air France and worked

hard to further strengthen the position of KLM and

Air France. This produced concrete results such as Air

Frances takeover of VLM, the Belgian carrier for business

travelers. Our cargo division also began the planning of a

Chinese cargo carrier together with our partner China

Southern. And preparations got underway for the

proposed merger of our partner Northwest Airlines with

Air France partner Delta Air Lines, which will significantly

enhance our position on the North Atlantic route. In

addition a Letter of Intent was signed with Maersk early

April 2008 to acquire their outstanding interest in

Martinair. This project has been submitted to and is now

under examination by the European Commission.

Together with Air France, we are working hard to become

the leading airline combination in the world: the smart

leader in our industry.

But the year also brought bad news. Negative were the

ongoing investigations by competition authorities of

various jurisdictions into alleged price fixing in cargo

traffic.

In response, we stepped up our actions in the area of

competition compliance awareness. In connection with

the investigations, we recorded a provision of 197 million

euro, which had a negative effect on our net profit.

Also we were shocked and surprised by the develop-

ments in Kenya, where political unrest had a major

personal and commercial impact on our colleagues at

partner airline Kenya Airways. The tourist industry, one of

the mainstays of the Kenyan economy, suffered seriously

as a result of the unrest.”

In which market segments does KLM excel?

“Thanks to a concerted commercial push, we have seen

a huge increase in profitability for our services to China

and India. In fact, the entire Asian market is becoming

more important to us. But we have also achieved

excellent results in Brazil and other rapidly expanding

markets. One of our greatest strengths lies in the many

More than 70% of our passengers transfer to connecting flights.


intercontinental routes we serve in cooperation with a

wide array of strong partners: they make all the

difference. More than 70% of our passengers transfer to

connecting flights. Last year, we added seven new

destinations to our route network. These are all located in

interesting areas, offering plenty of potential for

economic growth. We now offer direct services to a total

of 74 intercontinental destinations from our Schiphol

home base; an expansive network with direct services is

of great value especially to our business clients. Also, our

North Atlantic routes – operated in cooperation with

Northwest Airlines – are becoming increasingly

important, accounting for around 4 billion euro in

revenues.

Forging solid alliances has always been one of our

greatest strengths. That is why we have decided to team

up with China Southern for transporting cargo. China is a

tremendously important market, but the Chinese also

have their own workforce and aircraft. It’s not easy to gain

a foothold. By entering into a cooperative relationship of

this kind, where we mainly contribute knowledge and

experience, we can benefit from the expanding market.

We have also seized opportunities to strengthen our

position in the European market. By adopting a smart

commercial strategy at transavia.com, we have gained

market share for flights out of Amsterdam. What’s more,

our partnership with Air France has added 60 million

French citizens to our domestic market. This is an

extremely attractive market for us, with many customers

in the upper segment.”

Do you expect this favorable trend to continue?

“In our three-year plan titled New Horizon, we stated that

economic prospects remain positive for the airline

industry. However, a substantial slowdown in industry

growth is foreseen in 2008 and the current rate of

inflation, the extremely high oil prices and the tightness

on the labor market that will likely increase staff costs put

more uncertainty on future development of the industry.


We also foresee greater competition in many areas.

Airfreight transport is facing competition from ocean

shipping, and short-haul passenger traffic from

high-speed trains. Furthermore, the aviation industry as a

whole is consolidating and new airlines and airports are

constantly emerging in markets such as China, India and

the Gulf. Among other things, we have to focus on

increasing our flexibility in order to react to these

developments.

The aviation industry is still expanding, but the

competition is growing just as quickly. Air France and

KLM have the ambition of remaining a strong combina-

tion in the world and a leader in Europe. One strong

group, comprising two airlines – each with its own home

base and unique character – and three businesses. We

are confident that we will succeed in this endeavor,

despite measures being adopted in our own country that

threaten to erode our competitive edge.”

Are you referring to the proposed intro-duction of flight tax effective July 1?

“Exactly. We are known to be a fervent opponent, for

example, of the proposed introduction of flight taxes, like

the one in The Netherlands. We believe such taxes distort

the market, increase the cost for the consumers and fail

to serve environmental goals. Similarly, a European

emissions trading scheme, which in principle could serve

as an effective instrument to combat emissions, will

become counterproductive and unacceptable if its

design is flawed by political side-motives. We certainly

don’t need a tax measure to encourage us to work harder

on creating a cleaner airline industry. We’re already hard

We certainly don’t need a tax measure to encourage us to work harder on creating a cleaner airline industry.


(Netherlands), in which we pledged to achieve

CO2-neutral growth up to September 2011. No other

airline has made such a strong and innovative commit-

ment to improving the environment. In so doing, KLM is

certainly the industry’s smart leader when it comes to

sustainability.”

Will fiscal 2008-09 be just as enervating for KLM?

“In our game, change is the only certainty. All airlines are

currently choosing sides, deciding which alliance they

wish to join and which airlines they wish to work with. Not

everyone is fully aware of just how rapidly economic

developments are taking place in countries like Russia,

India, China and Brazil. This will change the face of the

global economy. The soaring fuelprices will further

increase the pressure on our industry. If KLM, but also the

Netherlands as a whole, wish to play a meaningful role

within this context, it is vital that we are able to respond to

such developments.

That is also why we have chosen for a flatter and

therefore more responsive operational management

structure. In the past, you could sometime take three

years’ to develop a product before bringing it to market.

Nowadays, you’d be too late in most cases.

But it is not just up to management to respond alertly to

our rapidly changing environment. I believe this applies to

each and every KLM employee. I expect all our people to

seize every opportunity to further develop their

occupational skills, and to take the initiative in this regard.

Switching jobs once in a while helps to inspire you and

keeps you on your toes. And that is exactly what we need

if we are to maintain the high standard of performance we

have set in our industry. Each of us has to prove that we

are also smart leaders as individuals. Fortunately, I know

what makes our workforce tick, and I have every

confidence that we will succesfully overcome the

challenges ahead of us.”

at work, assuming our corporate social responsibility, but

also driven by purely commercial motives such as the

sky-high fuelprices. The members of the International Air

Transport Association (IATA) – which includes almost all

of the world’s airlines – have set a zero-CO2 target for the

year 2050. How will we achieve this? That is hard to

predict at this point in time. New fuels perhaps, or

solar-powered aircraft? What I do know is that the entire

airline industry is hard at work addressing this issue, and I

am confident that such solutions will be found. And this is

not an empty promise. We simply don’t have any choice.

If we sit back and wait, the fossil fuel resources needed

for the industry will be depleted by 2050. We need to take

action.”

But 2050 seems a long way off …

“It may seem that way, but these processes are not

simple. That’s why we are already working on all fronts to

cut back CO2 emissions. Firstly, through fleet renewal, of

course. Few airlines are capable of pursuing such an

intensive program to purchase so many cleaner aircraft,

such as the Boeing 777s and Airbus A330-200s. We

welcomed several new additions to our fleet in the past

year (see page 47 for the full delivery schedule). Thanks

to our new fleet, we can structurally reduce costs and

CO2 emissions and serve our network in a more flexible

manner, thus enhancing passenger satisfaction. In

addition, these new aircraft are less noisy and burn less

fuel, which means less impact on the environment.

Also, as chairman of the Association of European Airlines

(AEA), I am striving to speed up the realization of a Single

European Sky, which will allow us to better utilize

European airspace. This could result in fuel savings of

6-12% on our European routes. We have also introduced

more efficient approach paths at Schiphol, and some of

our aircraft taxi on only one engine whenever possible.

An emissions trading scheme will be introduced in

Europe in 2012, which can greatly contribute towards

better managing CO2 emissions. KLM has already

preempted the introduction of the scheme. In September

2007, we signed an agreement with the World Wide Fund


Towards Smart Leadership 11Corporate Social Responsibility 14An interview with Jan Ernst de Groot: “You don’t build a high-speed track for a slow train” 16Product improvement 20

Reputation Policy


KLM has always had an excellent reputation. But this offers no guarantee for the future. To maintain our reputation in a rapidly changing world it is important to take control of our own image. KLM has chosen to focus on the following themes from 2007 through 2009: Smart Leadership, Corporate Social Responsibility, and Product improvement.



With more than 33,000 employees, KLM is one of the

Netherlands’ largest employers and consequently makes

a very important contribution to the Dutch economy, both

directly and indirectly.

Network Together with its partners, KLM now offers customers

access from Schiphol to over 250 destinations world-

wide, both nonstop and via other airports, 74 of which are

intercontinental. In the past year, we again strove to opti-

mize services and add new destinations. We launched

new services to Hartford, Dallas, and Portland (all in the

USA), Panama City (Panama), Linköping (Sweden),

Smart Leadership is a particularly important value for

KLM. We are a global airline, based at Amsterdam Airport

Schiphol. KLM forms the heart of the KLM Group, which

also includes KLM cityhopper and transavia.com, and we

are the oldest airline in the world still operating under its

original name. In 2004, KLM merged with Air France,

creating a business model that is unique in the airline

industry. Air France and KLM cooperate very closely

wherever possible, to strengthen their market position

and improve their business processes. However, both

airlines retain their own strong brand, identity, and hub,

and both remain active in three core businesses:

Passenger, Cargo, and Engineering & Maintenance.

Together with Air France, KLM has the ambition to

occupy a leading position in all of these core businesses,

in both Europe and North America, as well as fast-grow-

ing economies such as India and China.

As a partner in SkyTeam – a global alliance of 11 airlines

– KLM is a player with an important role in North America,

Europe, and Asia. Air France and KLM – together with its

partner Kenya Airways – are also strongly positioned in

Africa.

Smart alliancesDespite our relatively small domestic market, we have

succeeded in becoming a leading industry player over

the past nine decades. This may be largely attributed to

the smart and often daring alliances KLM has forged over

the years with a range of partners. Examples include our

joint venture with Northwest Airlines in 1989, our share

and joint venture in Kenya Airways since 1995, our

merger with Air France in 2004, and our membership of

SkyTeam in 2004. These alliances have helped KLM

become an international airline with a global network.

Almost three quarters of all passengers carried by KLM

catch connecting flights at Schiphol or another transfer

hub. KLM and its partners’ transfer operations account

for almost 70% of all aircraft movements at Schiphol.

Together with the seaports in Amsterdam and Rotterdam,

this makes the Netherlands an important crossroads in

the global market. The international network served by

KLM and its partners has made Amsterdam Airport

Schiphol the fourth most important mainport in Europe.


Muscat (Oman), and Nantes (France). The development

of our network illustrates how KLM makes clever use of

its partnerships. They allow us to offer destinations that

would normally be out of reach for a country of our size.

The three US destinations are being developed in col-

laboration with Northwest Airlines. KLM will serve Dallas

from Amsterdam, and Northwest will take care of the

other two routes. Panama had been absent from the KLM

schedule for many years, but thanks to our cooperation

with South American airline COPA Airlines – a SkyTeam

member that serves many countries beyond Panama – it

now makes economic sense to resume services to this

city.

When expanding its network, KLM looks carefully at the

economic and leisure development of regions and coun-

tries that may present opportunities for profitable growth.

These destinations do not necessarily have to be in the

Asia or the other side of the Atlantic. This is borne out by

the launch of scheduled service to the Swedish university

town of Linköping on March 30, 2008. KLM is the first

major international airline to develop its activities outside

Sweden’s main urban areas. KLM has great expectations

of the business climate and strong growth in the strate-

gically positioned Östergötland region, where auto

manufacturer Saab and other companies have their

head office.

London is one of the most important markets for inter-

continental traffic on North Atlantic routes. KLM already

attracts customers from London via its establishment at

London Heathrow. KLM will further improve its position-

ing in London in the coming year, when Heathrow’s

Terminal 4 evolves into a standard bearer for the SkyTeam

alliance. In the summer of 2009, KLM will begin sharing a

check-in area and other facilities with such airlines as

Northwest, Delta, and Continental. The following year,

our other partners who fly to Heathrow will also move into

Terminal 4 , thus substantially increasing opportunities to

benefit from the Open Skies Treaty between Europe and

the United States, signed in the first half of 2008. The

Open Skies treaty means that, from April 1, 2008, airlines

may operate from Europe to all airports in the United

States, and vice versa.


KLM is fully aware that sustainable enterprise is a must to

gain the support we need to achieve our business objec-

tives. Together with Air France, KLM has pledged to pur-

sue a leading role in the airline industry in improving the

sustainability of its activities.

KLM’s strategy to achieve profitable growth therefore

goes hand-in-hand with care for the environment and

society – people, profit and planet are the cornerstones

of the corporate policy we pursue. According to the

World Economic Forum, KLM is already one of the top

100 most eco-friendly companies, and AIR FRANCE

KLM was the highest ranking airlinegroup in the 2007

Dow Jones Sustainability Index. The basis for our ongo-

ing efforts to improve our sustainability performance is

KLM’s ISO 14001 certification, which sets the standard

for KLM’s ambitions and activities in the areas of water

consumption, energy, emissions and waste.

CO2-reductionIn the important area of CO2 reduction, KLM pursues a

policy based on three components: reduction at the

source, control, and compensation. Reduction at the

source is, for example, tackled by means of fleet renewal

with more fuel-efficient aircraft, alternative flight

approach procedures, and reduced weight on board.

The international emissions trading scheme may

contribute to controlling CO2 emissions, on condition that

agreements on such issues extend beyond Europe,

otherwise CO2 emissions will simply be moved to other

parts of the world, in KLM’s opinion. KLM has preempted

the introduction of the emissions trading scheme in 2012,

by already committing itself to CO2-neutral growth in a

number of its activities. With this in mind, KLM has

entered into a strategic partnership with the World Wide

Fund (Netherlands). Within this partnership – which

reflects the third cornerstone: compensation – KLM has

pledged to compensate for the remaining increases in

CO2 emissions resulting from growth in the airline’s air

traffic in the next four years. Also KLM offers her

passengers the possibility to compensate through its

service CO2ZERO.

Noise abatementNoise abatement is also a permanent focal point of our

policy. Our extensive fleet renewal program ensures that

older aircraft are replaced by modern successors that pro-

duce much less noise. Since 2006, KLM has consulted

with all relevant stakeholders – from government officials to

local residents – as part of the Alders Table platform and

the Schiphol Regional Review Board (CROS), discussing

new measures for reducing noise impact to acceptable

levels. The dilemma in this regard is that measures that

help to reduce noise, such as the use of different approach

routes, are sometimes in contradiction with targets to

reduce CO2 emissions.

Corporate Social Responsibility (CSR)


Relief programsIn addition to our efforts to improve our environmental

performance, KLM and its employees also contribute to

numerous medical and social relief projects worldwide. In

the Netherlands, the Foundation for Reading and Writing

(Stichting Lezen en Schrijven) offers support to KLM

employees who wish to improve their literacy skills, while

the Valk Foundation (Stichting Valk) helps people beat

their fear of flying – a perfect example of “people” and

“profit” going hand-in-hand at KLM.

The KLM AirCares Program offers financial and opera-

tional support to projects that improve the position of

children in developing countries. The program can count

on the loyal and enthusiastic support of members of our

Flying Blue frequent flyer program.

Many KLM employees are directly and personally

involved in relief projects, both in the Netherlands and

elsewhere. One example is Wings of Support, which was

established by KLM flight personnel and is also sup-

ported by Martinair personnel. This foundation, which

helps provide housing and education for children, has

already completed 234 projects in 31 different countries.

Pilots without Borders (Piloten zonder Grenzen) is

another initiative that is warmly supported by KLM per-

sonnel. This organization helps relief organizations in

developing countries to recruit pilots and maintain air

services to remote regions.

This foundation, has already completed 234 projects in 31 different countries.


Jan Ernst de Groot joined the KLM Board of Managing Directors on

July 5, 2007. He is the company’s third statutory director.




“That ambition has everything to do with our position in the Netherlands, which is strong, but also vulnerable. The Netherlands has a unique status in the world of aviation. In the past decennia we have created a formula for success that has promoted Amsterdam to Europe’s major league in terms of global accessibility, alongside Paris, London, and Frankfurt. These are really our most important competitors, along with Dubai. It really is incredible that other major European cities like Rome, Madrid and Barcelona don’t even have half as many network connections as Amsterdam! They are in a different league, as it were.

We don’t owe our leading European position to the number of people who come to visit our country, or locals who depart from here – our domestic market is too small for that.

KLM has the ambition to become the world’s most sustainable carrier. That’s quite a challenge for an airline based in a relatively small country.

“You don’t build a high-speed track for a slow train”


is that political decisions are often aimed at the short-

term.

Emission trade has become a source of income for

finance ministers instead of an instrument to reduce CO2

emissions for which it was intended. Like this we will

never succeed in convincing our American and Asian

partners to join the European system. Europe can only be

credible as a pionier in sustainability in the world if the

system is economically a succes.

One of the things that keeps me awake at night is that our

biggest investment – aircraft – will be around for five cabi-

net terms. We are not asking the government to give us a

free hand, but to adopt a consistent and realistic

approach that takes account of our business model as a

network organisation. Together, we have spent almost 90

years investing in this crucial product for the Dutch econ-

omy. We need to stick together to safeguard our future. A

future which starts nów, we cannot wait until 2012.

The difference lies in the intercontinental connections that

Schiphol offers, most of which are operated by KLM and its

partners. This intercontinental hub is the heart of Mainport

Amsterdam, providing direct employment for 30,000 peo-

ple, and indirectly creating jobs for 100,000 more. We con-

nect The Netherlands to the world and the world to The

Netherlands. And that connection is precisely what is at

stake for The Netherlands if a sensible answer is not found

to, among other things, the environmental impact caused

by flying. The global aviation industry is responsible for 2%

of all man-made CO2 emissions. This share may seem

rather limited, but global demand for air transport is grow-

ing and KLM is fully aware that it must recognize the envi-

ronmental impact of its activities. We know that we will

have to keep pursuing improvements in this area if we hope

to maintain our economic activities here. In our globalizing

economy, the Netherlands and KLM can only sustain their

success by swiftly gaining expertise in new restrictions,

such as the environment, noise, security, and congestion.

We don’t believe in choosing the easy way out.”

What exactly is the main threat to the status of Schiphol and KLM?

“We mainly owe our strong international competitive

position to our competitive cost levels. We have very little

influence on the revenue side, owing to our relatively

small domestic market. That makes us vulnerable to uni-

lateral, cost-raising measures such as the flight tax the

government will introduce on July 1, 2008. Transfer traffic

is highly price-sensitive; if a passenger wants to fly from

Japan to Madrid, they can do so just as easily directly or

via Munich. It is not self-evident that people choose

Amsterdam as the European gateway. The Dutch flight

tax will mean a net increase of 200 euro for a family with

two children flying to America. It is understandable that

people than consider taking a free shuttle bus offered by

a competitor to, for example, Düsseldorf and fly from

there. There is obviously no benefit to the environment of

this tax which was formally based on environmental

motives. A similar effect may be caused by the European

trade in CO2 emissions as from 2012. If the agreements

remain limited to Europe, it will distort the market and it

will be more attractive to fly via Dubai from Japan to

Madrid rather than via Amsterdam or Paris. The problem


The government’s measures in this area aren’t fast or

effective enough. We have therefore decided to draft our

own climate agenda and to engage in an alliance with a

prominent environmental organization, the World Wide

Fund for Nature (WWF), which will not only support us,

but will also keep us our toes.”

To which extent does KLM’s compensa-tion service CO2ZERO differ from existing compensation programs in the airline industry?

“Our CO2ZERO service presents our customers with a

very simple means to calculate and compensate for the

CO2 emissions of their flight via our online booking and

check-in process. In this way, they can donate money to

one of the Gold Standard projects developing renewable

energy sources worldwide. These projects all have the

highest CO2 certification and are fully supported by the

WWF (Netherlands). This compensation service is the

keystone of a much broader program. KLM’s agreement

with WWF (Netherlands) is founded on a pledge to

achieve CO2-neutral growth from 2007 through 2011.

That agreement is set in stone, and it is going to cost us

money. In short, we have hung a price tag on our own

CO2 emissions.

But how will we achieve CO2-neutral growth? First and

foremost, by reducing emissions at the source. That

means introducing new, cleaner aircraft, winglets on

existing fleet, shorter approach paths, weight reduction

on board, washed engines and new taxiing procedures

(because an aircraft is much like a car, in that the way you

drive or fly also affects environmental performance). But

we’ll also be campaigning for more efficient utilization of

European airspace. That alone could reduce the

European airline industry’s CO2 emissions by tens of

millions of kilograms a year! Which is equal to the volume

of emissions KLM produces annually. However, the real

breakthrough will, of course, ultimately be generated by

innovations in fuel and aircraft design, which KLM is

currently working on in collaboration with the Delft

University of Technology and other organizations. But for

the moment we have committed ourselves to reducing

emissions per passenger by 3% in 2012, and by 17% in

2020. And the WWF will hold us accountable if we don’t.

How we achieve this reduction is up to us. That’s quite a

commitment, but it also exemplifies KLM’s vitality. We

intend to put our pioneering spirit to work in the

environmental arena.”

And then there’s the fierce debate about the noise impact that KLM and other airlines have on the residential areas around Schiphol.

“The underlying tension is a fact of life. We will always

keep taking our neighbours seriously. It’s logical that they

want a pleasant environment to live and work in. The

‘Alders Table’ was set up at the end of 2006 as a con-

sultative platform chaired by the former Queen’s

Commissioner for Groningen, Hans Alders, to advise the

government on the balance between the growth of traffic

at Schiphol, measures to reduce nuisance and the envi-

ronment in the short and medium term. The Alders Table,

in which all stakeholders in the development of Schiphol

are represented, issued its first advice in June 2007 on

the development of Schiphol and the region to the end of

2010. It stated that flight movements could increase to a

maximum of 480,000 in 2010. Agreements were also

made to improve the quality of life around Schiphol and

on new measures to reduce nuisance, including the mod-

ification of certain flight routes and flight procedures. For

the longer term, KLM would like to achieve clear capacity

prospects for the further development of its network, but

no agreement has yet been reached on this. One solution

could be to utilize Schiphol’s capacity more selectively by

focusing on a network of high-value, intercontinental

flights, instead of trying to meet everyone’s requirements.

Schiphol has a very high-grade infrastructure, at consid-

erable social costs, which should be carefully utilized and

cherished. After all, you don’t build a high-speed track to

run a slow train service. If capacity become increasingly

scarce, the government should take a closer look at the

differences between airlines, in terms of their contribution

to the Dutch economy as well as their environmental per-

formance. Quality is more important than quantity.”


Along with Smart Leadership and CSR, Product

Improvement is the third cornerstone of KLM’s reputation

strategy. Product improvement is largely the domain of

KLM’s Commercial organization. Customer satisfaction

is crucial for KLM’s market position. Throughout last year,

we strove to improve our products across the board.

Thanks to our healthy financial position, we were able to

invest substantially in product improvements, all of which

were shaped in accordance with our customers’ wishes

and the degree to which they contribute to profit.

During the past year, KLM and Air France have further

combined the commercial management of all activities

relating to passenger transport. The two airlines now

have a common commercial organization worldwide, but

have retained their own brands and marketing activities.

Wherever KLM is represented in the world, the establish-

ment is now headed by a joint management team. The

same goes for e-commerce.

KLM is a service provider looking to meet each travelers’

individual requirements to the greatest possible extent.

All our passengers are equally important, but there are

differences in the specific needs of certain groups.

Business travelers, many of whom are frequent flyers, are

particularly interested in punctual departures and arrivals,

and fast handling before and after a flight, as well as the

opportunity to be able to rest or work during a flight. For

leisure travelers, KLM concentrates on providing easily

booked, attractively priced services that are operated to

perfection.

It is essential that customers are not only served well dur-

ing the flight itself, but also during every other phase of

the journey – from booking to baggage pickup at their

final destination.

All our passengers are equally important, but there are differences in the specific needs of certain groups.

Improving our product

“The wishes of our customers are the main engine driving our plans to further improve service, with enhancements ranging from aircraft cabin interiors and facilities at Schiphol and out-stations, to the many new e-services we offer our customers, such as web-based availability of excess-baggage vouchers and seats with extra legroom. Product innovation and im-provement are absolutely essential to continue distinguishing ourselves within the fiercely competitive airline industry.

In this regard, it is important to focus on those investments that contribute most effectively to the profitability of our airline. Our analysis of the wishes of our customer groups is becoming increasingly precise, enabling us to better identify the product improvements they appreciate most. Within this common vision, Air France and KLM remain two clearly distinct brands, which each have their own face to the market. Behind the scenes, however, we are cooperating more and more closely. For instance, by integrating our global sales and station organi-zations, but also in the area of IT systems. By pursuing more intensive cooperation, we not only ensure that our processes become simpler and cheaper, but also that we can better serve our customers.”

Erik VarwijkExecutive Vice President – Commercial


Before the flightIn recent years, KLM has put a great deal of effort into

optimizing its e-business, which ranges from the website

for booking tickets, to the blue kiosks at Schiphol and

other airports, where passengers can check in electroni-

cally. Our website www.klm.com currently attracts

around 115 million visits a year, 28 million of them from

the Netherlands. These visitors annually account for

around 1.1 million reservations worldwide, 360,000 of

them in the Netherlands.

Last year, we gave our customers more options to alter

their reservation via the website. For an extra charge,

visitors can now book seats with extra legroom or make

arrangements to bring along extra baggage. More and

more passengers are checking in electronically, printing

their boarding pass at home or at airport self-service

kiosks.

KLM also further improved the provision of information

on changes in flight schedules. We ran a pilot project that

saw passengers checking in via their mobile phone, and

preparations began for the renovation of the check-in

area at Schiphol’s Departure Hall 2, which will improve

the flow of passengers through this area.

Aircraft boarding procedures have become far much

more complex in recent years owning to the many strict

security measures that are a fact these days. KLM is striv-

ing to limit inconvenience and delays at airports as much

as possible, and is currently working to improve boarding

procedures by introducing dynamic information displays

and other measures. An experiment has been launched

for a completely electronic process using the passen-

gers’ mobile telephones as boarding cards.

Our website www.klm.comcurrently attracts around 115 million visits a year, 28 million of them from the Netherlands.


During the flightFlying itself has also become more comfortable at KLM,

thanks to the extensive fleet renewal we have been pur-

suing since 2002. Owing to these new acquisitions, KLM

has succeeded in reducing the average age of its fleet

(including that of transavia.com) by 1.2 years. The new

aircraft, such as the Boeing 777-200ER and -300ER, the

B737-800 and -700, the Embraer 190 and the Airbus

330-200 offer passengers more comfort and personal

choices. The cutting-edge cabin design and inflight prod-

ucts feature the very latest technology, such as the video-

on-demand system, which will also be installed in our

existing Boeing 747-400 and MD-11 fleet. The fleet

renewal program is an excellent example of how the

interests of people, planet, and profit can be combined.

During flights, KLM seeks to offer customers the best

possible personal service. To achieve this, we introduced

a key instrument in 2007: the Customer Directory, which

provides all relevant information about passengers on

board. In early 2008, we ran trials in which pursers could

access this information via their mobile workstations

(PDAs). In addition, KLM is working on expanding per-

sonal choices for passengers. For instance, when order

(or, indeed, refusing) certain meals, or purchasing certain

products.

KLM intends to develop more differentiated products in

due course, targeting various distinct customer catego-

ries. There is, for instance, a growing market demand for

a slightly more luxurious and peaceful environment than

Economy Class, but no necessarily as exclusive as the

current Business Class. KLM is assessing whether a new

class can be created to meet this demand.

Transfer and arrivalBecause transfer passengers are so important to KLM,

we are seeking to achieve a leading position in the

execution of transfer procedures. Major improvement in

this area include self-service transfer kiosks at airports,

and – at a later stage – the option of arranging or altering

transfers while still on board.

KLM also wants to assure its customers of a pleasant

reception and support on arrival. The renovation of our

Intercontinental Lounge at Schiphol is one example of

our efforts to achieve this.

Throughout our passenger support process, we are

working to improve the manner in which inevitable

schedule changes – such as delays, cancellations, gate

changes etc. – are processed and communicated to

passengers. This aspect of service is set to become an

increasingly important area in which airlines achieve

distinction.


Passenger Business 25Cargo Business 30Engineering & Maintenance 32Human Resources Policy 34Leadership and information technology 36

Operations


Passenger Business

Passenger Business generates the most revenue of all KLM’s core activities (Passenger, Cargo, and Engineering & Maintenance). In the fiscal year, KLM achieved robust growth in passenger traffic, in terms of revenues as well as profitability. Not only did passenger figures rise by 3.2% to 23.4 million, but the average yield per passenger kilometer increased by 4%. Load factor declined by 0.8 percentage point to 82.9%, also because of a strong capacity increase of almost 5%.

KLM performed well in Asia where, thanks to a concerted effort from our Commercial division, passenger traffic rose by 6.2%. Many flights to and from China, Japan, and Korea are now staffed by Asian cabin crew, and we are preparing to introduce catering oriented to the Asian market. We are further strengthening our longstanding ties with SkyTeam partner China Southern to improve our services in the Asian market.


“In the past year, we improved our products in many areas and achieved promising growth. However, this has gone hand in hand with capacity growth, which demands a concerted effort from our entire organization to continue ensuring operational reliability. Growth is fantastic, but it must also be feasible in practice. After all, every extra ticket we sell imposes extra demands on ever-restricted operational capacity, both in the air and on the ground. The entire chain of operations must therefore function smoothly in order to keep our promises to our customers. There is little point in buying a nice, new aircraft that can cross the ocean quickly to ensure that passengers can catch their connecting flights, if that same aircraft has to wait for a spot at a gate on arrival.

Once again we have succeeded in maintaining a high standard of operational reliability – despite an extensive reorganization of upper and middle management. Our planning performance is strong, but we will have take an even more process-driven approach in the coming years to ensure that product innovations and improvements – exemplified by our fleet renewal program – are effectively incorporated into our operations.

The other most important growth market was our

Northern American network, where traffic was up 8.8%,

followed by the Middle-Eastern and the African networks,

with modest respective growth off 1.9% and 0.6%.

European and North-African traffic was up 3.1%. And

passenger traffic in the Caribbean & Indian Ocean market

decreased by 11.9%, reflecting the reduction in capacity.

CockpitEither alone or in cooperation with its partners, KLM now

offers passengers access to 250 destinations worldwide.

In the past year, we again strove to optimize services and

add new destinations. To facilitate network expansion,

Flight Operations has been training as many pilots as

possible in recent years. However, KLM sets exception-

ally high standards for its pilots, and not everyone has the

required qualifications. This is logical because our pilots

are ultimately responsible for our passengers and crew,

as well as our aircraft. In addition, the captain is also

serves as a “calling card” for KLM. Research has shown

that passengers not only great appreciate attention from

the crew, but also from the captain.

Around 400 highly qualified staff work on the ground at

Flight Operations to support safe and smooth flight oper-

ations. It is, however, also essential to look to the future.

The Air Traffic Management department makes an impor-

tant contribution at a strategic level to the position of

KLM in discussions about airspace capacity – for

instance, regarding the introduction of a Single European

Sky – and the present and future runway capacity at

Schiphol.

CabinKLM carries many transfer passengers, most of whom do

not speak Dutch. That is why our 8,500 cabin attendants,

pursers, and senior pursers are all multilingual and

specially trained to interact with passengers of various

cultures. KLM cabin crew have a no-nonsense attitude

that aims to serve passengers efficiently and address

problems pragmatically. Cabin crew workload has

received extra attention over the past year. Stricter

security measures at airports present one of the most


demanding factors for cabin and cockpit crews, as well

as other personnel. Not only passengers, but also airline

employees are confronted with these measures on

almost every working day. They too have to pass through

the security scanners, sometimes several times in one

day.

OperationsBesides price and comfort, punctual arrival and

departure times and reliable baggage handling are some

of the main reason why passengers choose to fly KLM.

This is especially important to transfer passengers who

have to catch connecting flights. The KLM organization

has faced the challenge of coping with a growing volume

of passengers and freight, the rapid rate of fleet renewal,

the introduction of new IT systems, improvements to the

internal organization, and the training and retraining of

personnel. Possibly our greatest achievement over the

past year is that these many challenges have had almost

no detrimental effect on the quality of our operations.

Because no matter how successful commercial efforts

may be, an airline’s success ultimately depends on the

safety and quality of its flight operations and the complex

procedures before and after passengers have embarked

– i.e. smooth check-in and boarding procedures, and

quick and handling of baggage, towing, refueling,

cleaning, and restocking of the aircraft.

Many of these activities take place behind the scenes.

Every day, around 5,000 KLM employees are involved in

Ground Services. This department is responsible for

ensuring the smooth handling of 50,000 departing

passengers a day, and roughly the same number of

baggage items. Everything at Ground Services revolves

around accuracy and regulations, particularly those

relating to security. These KLM employees must

therefore be even more capable of coping with stress and

adopting a flexible attitude when schedules change due

to weather conditions or technical defects, which often

means the entire operational chain has to be reshuffled.

In the past year, a concerted effort has been made to

improve these processes, and significant progress has

Security is another issue that demands more and more attention – and capacity and costs, of course. In September last year, we passed the EU inspection by the National Counter-Terrorism Coordinator with flying colors. Across the board, at KLM, KLM Cityhopper and transavia.com, no serious shortcomings were detected. That’s a good result. Security is an important criterion for our Air Operator Certificate. This is a never-ending process. This was borne out in early 2008, when a spate of negative publicity led to further intensification of security measures at Schiphol. That is inconvenient for all involved. But our motto is: ‘Never compromise on safety and security,’ which is why we take measures of this kind very seriously.”

Ype de HaanExecutive Vice President – Operations


been made in baggage handling. Also, KLM baggage at

Schiphol is now tagged with a radio chip (RFID), allowing

individual tracking of all baggage items – the first step

towards worldwide implementation of this innovative

technology.

transavia.comtransavia.com is a subsidiary of KLM. Within the KLM

Group, transavia.com offers added value by operating

charter services and (low-cost) scheduled services. In

fiscal 2007-08, transavia.com once again succeeded in

raising its revenue by 622 million euro. This growth may

be attributed to the growth of its charter services as well

as its scheduled services. Operating costs increased

owing to factors including organizational growth and the

sharp increase in fuel costs.

In the past year, transavia.com began operating

scheduled services to two new destinations (Agadir and

the winter destination Grenoble), and suspended

scheduled services to Prestwick. That means transavia.

com now operates scheduled services to 27

destinations. In the summer of 2008, the airline will

operate scheduled services to 32 destinations and

charter services to 73 destinations, 34 of which are also

open to passengers booking individually.

At the beginning of 2007, KLM and Air France jointly

established Transavia France. This airline began

operating in May 2007. Under the brand name transavia.

com, four Boeing 737-800s have been serving 9 charter

destinations from Paris Orly (South) during summer 2007.

As from the winter scheduled services to 9 destinations

have been added.

SecuritySecurity is one of KLM’s chief priorities. When it comes to

security, we leave nothing to chance. This was confirmed

by the European Commission’s inspection of Schiphol in

September 2007. KLM passed this inspection with flying

colors. Nevertheless, this does not diminish the

inconvenience that staff experience as a result of having

to comply with these measures, which include security

checks four times a day, cabin checks, crew baggage

checks, and 100% surveillance at Schiphol. However, all

of these measures are vital to ensure the safety of staff

and passengers. Fortunately, advanced technology such

as the Security Scan and iris scan make the enforcement

of these regulations more user-friendly. We are working

hard to introduce more of this kind of technology, which

demands substantial investment.

“The logistics of handling 50,000 passengers plus 50,000 pieces of baggage a day means that Ground Services staff must not only be highly punctual, but also flexible and immune to stress. Poor weather or congestion on the A4 motorway can disrupt the entire schedule. That means the entire chain has to be realigned as quickly as possible, because the aim is always to ensure that passengers arrive and depart on time and that their baggage is loaded into the aircraft or onto the belt on time.

Comparative surveys have revealed that our basic processes are in good shape. We are best in class for departure and arrival punctuality, and we have solved the baggage handling problems we had in the past. We now want to distinguish ourselves by reducing the inconvenience of airport security measures wherever possible; for instance, by offering better check-in facilities and more comfortable lounges.”

Paul ElichExecutive Vice President – Ground Services


e-EnabledKLM’s first e-Enabled Boeing 777-300ER arrived at

Schiphol in February 2008. This is the first aircraft in the

KLM fleet to be equipped with the innovative e-Enabled

aircraft technology. KLM is a trendsetter in this field.

Using broadband technology, an e-Enabled aircraft is con-

tinuously connected – on the ground and in the air – with

ground systems that offer access to KLM’s digital network.

The e-Enabled aircraft program, is just one example of

the innovative projects realized through close

cooperation between Engineering & Maintenance, Flight

Operations, Information Services, Inflight Services,

Passenger Operations, and Commercial.

The technology of e-Enabled aircraft opens the door to a

wide array of opportunities and innovations, both opera-

tional and commercial. For instance, the aircraft mainte-

nance process is substantially accelerated and improved

if electronic data on technical issues are relayed to the

ground organization while the aircraft is in flight. This

means the replacement component can be brought to

the ramp or hangar in advance, ready for use when the

aircraft lands.

Passengers also stand to benefit from this new technol-

ogy, with possible services including onboard internet

and the online ordering of tax-free products. This also

brings us as step closer to the inflight submission of per-

sonal transfer data, as well as the real-time provision of

updates on connecting flights and other information for

passengers and crew. Our cabin crew are already

equipped with mobile workstations that offer, among

other things, a wide range of fully updated information on

passengers. This enables our staff to offer an even better

and more proactive response to individual passenger

needs.

“Our cabin crew are the key to our inflight product. Passenger appreciation largely derives from the standard of service they experience on board. We distinguish ourselves by offering a typically Dutch no-nonsense attitude, which takes the form of efficient passenger care and a pragmatic approach to any problems that may arise. We do this well, efficiently, in multiple languages and with a smile. During the flight, we strive to offer an optimum response to the wishes of each and every passen-ger. Every customer is equally important to KLM, but each cus-tomers category clearly has its own wishes.

New technology, such as the mobile workstations which we are testing now, support crew in their efforts, and we expect that new technology will enable us to offer an even more flex-ible and effective response to the wishes of individual travelers. To do so, we will continue to pursue substantial product im-provements – from our fleet itself, to the quality of food and beverages on board.”

Bart VosExecutive Vice President – Inflight Services


KLM Cargo and Air France Cargo have achieved sub-

stantial integration since October 2005, joining hands to

become one of the world’s largest airfreight carriers.

Cargo traffic through Schiphol developed well during

fiscal 2007-08, despite structural overcapacity in the

market.

Our activities focus on cargo carriage between Europe

and the major industrial manufacturing centers in coun-

tries like the United States, China, and Japan. Around

30% of our airfreight is carried by KLM’s three full-

freighter aircraft, and the remainder is carried aboard the

Boeing 747-400 Combi aircraft and in the holds of KLM

full-passenger aircraft.

Competition in this market is fierce. Airfreight capacity

has seen strong growth in recent years, especially at fast-

growing and new airlines based in Asia and the Middle

East. The past two years have seen structural overcapac-

ity. Besides that, airlines have increasingly had to reckon

with competition from maritime shipping. Low interest

rates mean that manufacturers can afford longer trans-

port times for their products. And with cargo capacity

leveling off in the 2007-08 period, transport companies

had to offer sharp prices to achieve a positive result.

Spiraling fuel prices present a second problem, in addi-

tion to overcapacity. Nevertheless, KLM succeeded in

boosting profits from cargo operations by 54%. We

achieved this result by further detailing and implementing

the joint market, product and customer strategies of Air

France Cargo-KLM Cargo.

Reliability and quality are crucial in achieving good results

in the fiercely competitive airfreight market. Customers

have a wide choice of carriers, and punctuality is a major

factor in deciding their choice. KLM aims to operate at

least 92% of its flights as planned, and to deliver 90% of

cargo at its final destination at the promised time.

Air France Cargo-KLM CargoTo strengthen its position, the Air France Cargo-KLM

Cargo combine presents a single face to the market.

Having fully aligned their activities in Paris and

Amsterdam and identified further synergies, Air France

Cargo-KLM Cargo is now largely an integrated

organization in terms of strategy, commercial market

approach, network development, and IT systems. That

means Air France Cargo-KLM Cargo can offer its

customers a great degree of flexibility and diversity.

Around 2,500 of the approximately 6,000 Air France

Cargo-KLM Cargo employees work for one of the

integrated units. Naturally, operational and physical

handling of cargo at both airports is dealt with locally. In

Amsterdam, this offers employment for around 1,100

people.

An excellent example of the intensive partnership

between the two cargo carriers was the introduction of

KLM’s fourth Boeing 747 full freighter, replacing two older

types. Following the development in fuel prices, it was

more advisable to operate this aircraft from Paris to

replace the non fuel efficient Boeing 747-200 freighter. In

2008 it will return to Schiphol, where it will be flown under

the KLM flag.

New participating shareAnother major development in the past fiscal year were

the preparations to take a participating share in our Asian

partner China Southern Airlines. Air France Cargo-KLM

Cargo has been invited to help envisage the establish-

ment of a new cargo company. Thanks to the extensive

expertise and experience of Air France Cargo-KLM

Cargo, China Southern will be able to strengthen its

position in the fast-growing Chinese market.

Cargo Business


E-freightIn November 2007, KLM again demonstrated its spirit of

innovation with the introduction of e-freight, which means

all freight documentation is digitized. The entire airfreight

industry has high expectations of this innovation, not only

because it saves a substantial amount of paper – and

consequently trees and fuel – but also because it

substantially improves the transparency and reliability of

the entire transport chain. Following an intensive

preparation period, KLM’s cargo division was the first in

the world to put e-freight into practice. This was possible

thanks to full cooperation from the Dutch customs

service and other authorities, as well as IATA and various

freight forwarders. E-freight is now an option on services

between Amsterdam, the United Kingdom, Hong Kong,

Singapore, and Canada. Based on experience gained at

Schiphol, Paris will also switch to electronic freight

documents at a later stage. We aim to operate half of all

flights “paper-free” in the coming five years.

World Cargo CityKLM’s cargo activities out of Schiphol account for 60% of

all airfreight carried in and out of the Netherlands, making

it a cornerstone of Amsterdam’s Mainport status.

Together, KLM and Schiphol are seeking ways to

strengthen the airport’s logistic capacity. This could well

imply that, in several years’ time, all of our cargo ware-

houses will be relocated to the other side of the Kaag

Runway, also known as the “South East Jump,” where

KLM will become one of the pioneers of the World Cargo

City, which is currently envisaged for this site.

“The cargo division operates in a fiercely competitive interna-tional market, where we not only face the challenge of other airfreight carriers, but also maritime shipping companies. Commercially, we have succeeded in improving our profitability by responding even more sharply to the wishes of our customers. The key to success in this regard is the quality you offer throughout the logistics chain. In short, not only the aircraft must arrive on time, but goods must also arrive in the warehouses on time.We are therefore working on all of the relevant processes, with automation playing a major role. During the past year, we team up with the customs authorities and, for the first time, trans-ported airfreight without piles of paperwork. E-freight could improve our competitive edge significantly.Schiphol remains an immensely important logistical cross-roads for international airfreight, especially for intercontinental consignments. Our activities make Schiphol a mainport for airfreight. Together with the harbors of Rotterdam and Amsterdam, there is still a great deal to be gained.”

Michael WisbrunExecutive Vice President – Cargo

KLM’s cargo division was the first in the world to put e-freight into practice.


Together, KLM Engineering & Maintenance (E&M) and Air

France Industries rank among the world’s largest provid-

ers of maintenance, repair and overhaul services. With a

workforce of 5,000 at Schiphol, KLM E&M is the largest

technical organization in the Netherlands. E&M is in

charge of maintaining the KLM fleet, but also does a lot of

work for other airlines. The division has three core activi-

ties: aircraft inspection and maintenance (Airframe),

engine inspection and maintenance (Engine Shop), and

the inspection, maintenance and distribution of compo-

nents (Components). E&M works to the highest stand-

ards. E&M has a reputation to uphold in this regard. The

division has close ties with engine manufacturers like

General Electric, which has outsourced a portion of its

engine maintenance to the KLM division.

Safety on the work floor is another key concern. Last year

saw the launch of the Safety@Work campaign, which

aims to make staff even more aware of the importance of

safe working procedures, for instance when handling

dangerous substances or working at great heights.

The low dollar exchange rate during the past fiscal year

had a greater impact on KLM E&M than on any other divi-

sion. In the airline industry, it is customary that mainte-

nance assignments for third parties are paid for in dollars,

whereas a significant portion of the costs are priced in

euros. This had a negative impact on the turnover and

profitability of our Engineering & Maintenance division.

Despite these recent developments, E&M still holds a

strong market position. This is partly because the serv-

ices provided by Air France Industries are complemen-

tary to those offered by KLM E&M. Together, the two

partners have the expertise to maintain almost all types

of Boeing and Airbus aircraft. That is why the further inte-

gration of activities is being pursued. In 2007, a process

was started to achieve the full integration of the commer-

cial activities of Air France Industries and KLM E&M.

Operationally, cooperation is well underway. Specific

engine types can undergo maintenance in Amsterdam or

Paris. This limited overlap proved beneficial in the past

year, with KLM E&M providing backup capacity when Air

France Industries was unexpectedly confronted with a

peak in workload. Engines were subsequently trucked to

Amsterdam, where they received the required mainte-

nance. Today, Air France Industries and KLM E&M

present one face to the market.

The influence of fleet renewalKLM’s extensive and dynamic fleet renewal program

presents E&M with opportunities to develop new, high-

grade services. The new Boeing 777s, which will form the

heart of the new KLM fleet, require only a third of the

maintenance man-hours required for the maintenance of

the Boeing 747. The decision of Air France to phase out

the 747s more quickly, raised the question in the past

year as to whether major maintenance on this type of

aircraft was warranted. It was subsequently proposed

that the so-called D checks on 747s would in the future

no longer be conducted in Amsterdam, but that this

labor-intensive activity would be moved to a yet-to-be-

determined location, where labor costs are considerably

lower. This will open the door to more specialized work.

This operation must be rounded off before 2012.

Eco-friendly methodsE&M is constantly working to improve maintenance tech-

nology and methods. This not only ensures that aircraft

return to service more quickly, but also that they have

less impact on the environment. In 2007, the division

developed and introduced a water-wash installation for

aircraft engines. Although the washing of engine interiors

with water to ensure better performance and lower fuel

burn is not new, E&M has found a solution to efficiently

combine this with the regular inspections of aircraft in

hangars. The water-wash installation ensures that pollut-

ants in the engine do not end up in the environment.

Engineering & Maintenance


“Our maintenance division is adept at coming up with new technology and methods that are beneficial in terms of the environment and efficiency. Every improvement we introduce to reduce environmental impact also means a reduction in costs. We have introduced a new, sustainable method of painting our aircraft, which reduces the number of heavy coats by 15% and therefore reduces fuel consumption and CO2 emissions. Moreover, this new method also reduces aircraft ground time by almost two days. Similarly, the engine water wash method is beneficial in terms of the environment as well as the profitability of our operation. This innovation not only reduces fuel con-sumption, but also the length of time that the aircraft is ground-ed for maintenance. E&M has proved that it is a highly innova-tive organization. This lies at the heart of our mission – to ensure a safe fleet that is out of the hangar and in the air as often as possible.”

Peter SomersExecutive Vice President – Engineering & Maintenance


KLM Group employed a workforce of about 33,000 and

has long been one of the most popular employers in the

Netherlands. Many of our employees aspire to lifelong

careers at a company that is broadly acknowledged as

one the premium brands in the airline industry. KLM

offers opportunities for talent at all levels, pursuing values

such as reliability, conscientiousness and dynamism. But

we cannot afford to rest on our laurels. KLM is also faced

with growing scarcity on the labor market, especially in

the fields of maintenance, IT and other technical depart-

ments. To attract youngsters to technical careers, KLM is

investing in its ties with educational institutions. Although

this has been fruitful, the past year has shown that we

must redouble our efforts in the labor market, to ensure

that we continue to attract the kind of people who can

guarantee the high performance standards we pursue.

Health and flexibilityKLM strives to offer its employees a healthy working

environment. We are constantly seeking ways to reduce

the physical strain of various jobs as much as possible.

Last year, for instance, we introduced so-called “ramp

snakes” for loading aircraft. These conveyor belts are

designed to offer maximum flexibility so that our aircraft

can be loaded almost entirely mechanically, keeping

heavy manual labor to a minimum.

KLM also offers its workforce a health scan, which

consists of a number of questionnaires that promote

health awareness among our employees. The question-

naires serve as a basis for offering employees specific

pointers on healthy living.

To keep employees mentally and physically fit, it is also

important to keep them motivated to switch jobs from

time to time. This is especially important at a company

where around 70 percent of the jobs involve manual labor

of some kind, which means there is always a long-term

risk of injury; for instance, due to extended strain of spe-

cific muscles. Moreover, when staff remain in the same

job too long, there is always a threat that they will become

less creative and sharp over time. This is a key concern

for a company that has to maintain its edge in a

Human Resources Policy


competitive and constantly changing environment,

where high standards of punctuality and safety apply.

KLM therefore urges its employees to develop their

expertise so that they can take on new jobs, either within

the company or elsewhere. Facilities include a career

supervision program and a career scan. Employees can

also apply for coaching, and we have a management

development program that offers career supervision to

high-potential staff. We also offer master classes where

senior managers share their expertise and experience in

specific fields. Operational managers are offered a

course in basic management, which covers all aspects of

personal leadership. In addition, KLM’s collective labor

agreement includes a clause pledging financial support

for further training. KLM has also joined a special founda-

tion that promotes literacy (Stichting Lezen en Schrijven)

and covers the costs of staff who attend courses that

teach and/or improve reading and writing skills, offered

by regional training centers.

Safety cultureFlying is the safest mode of transport. KLM does its

utmost to ensure that this remains the case. It is therefore

of immense importance that KLM staff always keep a

critical eye on their own work as well as that of their

colleagues. KLM has adopted working methods that

pursue open communication on errors and near misses,

with a view to improving working procedures, rather than

assigning blame. This approach to quality enhancement

has been introduced at all operational departments. In

2008, several departments, including E&M, have also

begun using a company-wide reporting system called

Sentinel, which collects all information on incidents. This

ensures that incidents can be investigated in a uniform

manner throughout the company. This safety culture

stimulates staff to report errors freely, without feeling that

this may have negative consequences for themselves or

their colleagues. This drive to develop a “learning

organization” has proved fruitful in practice.

“KLM remains a popular employer, to which employees are prepared to commit themselves for a great length time. Nevertheless, we too will have to actively scour the labor market to ensure sufficient recruits, particularly in the technical sector. During the coming years, we will be confronted with a major exodus of staff who have reached the age of retirement and will have to be replaced at their respective levels.

In addition, we feel it is important that existing staff develop a flexible attitude and are open to new jobs within the company. People who spend too much time doing the same job run a higher risk of physical and mental ailments. We therefore encourage our people to keep investing in themselves and offer staff at all departments a wide range of training opportuni-ties and instruments to do so.

And of course our efforts to prevent absenteeism remain high on the agenda. Last year, we once again introduced equip-ment designed to ease strenuous activities, such as the loading of baggage.

Wim KooijmanExecutive Vice President – Human Resources & Industrial Relations


Information and communication technology (ICT) is

essential for an airline that aims to offer safety and

reliability on a 24/7 basis. Information technology is the

cement that holds our company together and is an

integral component of the working lives of almost all our

staff. An airline is a highly complex organization that

revolves around teamwork, which in turn depends on the

swift and reliable exchange of information on topics

ranging from aircraft components to customer data.

KLM has more than 800 employees maintaining and

developing ICT systems, and a further 400 handling infor-

mation management. They regularly team up with highly

qualified and specialized external partners, who help

KLM devise advanced solutions for both the operational

and commercial sides of our organization.

Improving our competitive edgeApart from safeguarding and optimizing our operational

processes, information technology also serves to

improve KLM’s competitive edge with the aid of better

systems to serve the market and reduce costs. The

development of new ICT applications, such as the KLM

website, often demand a great deal of investment, but

ultimately also save a great deal of money. This is born

out by the successful introduction of electronic check-in

services, which have reduced the costs of this process

by 75%. KLM’s profitability has also benefited immensely

from yield management using systems that maximize

yield per passenger seat. And our customer relationship

management systems are vital in ensuring the best

possible response to our customers’ wishes.

“Information and communication technology is one of the cornerstones of our company. Without advanced ICT systems, our company would be unable to operate. If ICT fails, every-thing grinds to a halt. That is why operational reliability and security are our chief priorities. On top of that, our ICT innova-tions are intended to consistently reduce costs.KLM was among the first in the world to introduce electronic check-in facilities. This demanded a sizable investment, but has also proved immensely beneficial in terms of costs. The electronic transfer kiosks at Schiphol are another example of an innovation that confirms KLM’s status as a first mover.

Upcoming ICT developments for our ground-based activities will mainly focus on further extension of the self-service concept for passengers, at home and at the airport. In the air, the introduction of our first e-Enabled aircraft is an exciting development – a new step towards further digitalization of our operations.”

Boet KreikenExecutive Vice President – Information Services & Chief Information Officer

Leadership in information technology


First moverKLM has frequently been a “first mover” in the implemen-

tation of new technology, and has thereby consolidated

its status as a smart leader. KLM was the world’s first

airline to introduce internet check-in services and check-

in kiosks at Schiphol. These self-service facilities are con-

stantly improved and extended. The KLM transfer kiosks

at Schiphol have proved to be a top-notch product,

which is why we have decided to raise the number of

these units from 15 to 105. The fact is, every innovation

we introduce has an ICT component.

AmbitionsOne of our most ambitious projects undertaken in the

past year involved the development of e-Enabled aircraft.

ICT played a key role in the realization of this project.

February 2008 saw the arrival of the first Boeing

777-300ER equipped with this ground-breaking

technology, following long and intensive preparation in

collaboration with manufacturer Boeing (technology) and

Ultramain Systems Inc. (software). Using a new broad-

band infrastructure, e-Enabled aircraft remain in constant

contact with ground systems throughout a flight. That

may sound relatively simple, but a direct link of this kind

implies that technology must meet unprecedented safety

requirements. The safety of the airborne aircraft may on

no account be jeopardized by this direct computer link.

The e-Enabled aircraft is the first step towards further

optimization of KLM operations, which will see the intro-

duction of a host of innovations in the coming years. It is

testimony to KLM’s vitality that we have dared to be

among the very first in the world pursue such complex

and far-reaching innovations.


An interview with Frédéric Gagey “Four years of continuous growth” 40Facts and Figures 44

Finance


Finance

Despite relentlessly high fuel prices and rising costs across the board, KLM succeeded in achieving excellent financial results in fiscal 2007-08. KLM CFO Frédéric Gagey sheds light on the figures.



“Our financial results have improved continuously since the merger with Air France in 2004, and our results for fiscal 2007-08 were excellent, there’s no doubt about that. Turnover rose again from 7.7 billion euro to more than 8 billion euro, and the yield per passenger and cargo kilometer developed well, rising to 4%. Growing turnover is a good thing, of course, but it’s essential that profitability grows along with it. And that was definitely the case last year. Our operating margin increased from 7.8% to 9.4% compared to the previous year. This proves that we have succeeded in keeping costs under control while raising the yield per passenger kilometer.

“Four years of continuous growth”Are you satisfied with the results for the past fiscal year?


At the same time we have focused on reducing the

company’s financial leverage by reducing the gearing ratio

(net debt to equity) whereas liquidity has improved as well.

This is altogether a strong financial performance. We have

substantial cash reserves. But saving is not a goal in itself. In

the years ahead, we will need to continue investing heavily in

fleet renewal – we’ll be ordering new aircraft to the sum of

300 million euro again next year – and we’ll also be investing

substanially on new ICT developments. And ever fiercer

competition in the airline industry means we must set aside

money for investments in the quality of our product. This is

the only way to guarantee sustainable growth in profitability.

Also, it should be noted that our savings are safely secured.

We have for many years pursued a very strict risk manage-

ment policy.

The good results may be largely attributed to our

excellent performance in passenger operations, to

synergies between Air France and KLM, to our commer-

cial strategy, and to our good investment policy and stra-

tegic fuel hedging. An important reason for the positive

development in passenger business is that the demand

for long-haul flights to and from Europe remained in bal-

ance with available capacity. In terms of the merger

between Air France and KLM, we see that the combine is

starting to work even better in practice. We’re a strong,

efficient group, with two well-aligned international hubs

in Amsterdam and Paris, offering an outstanding

European network in Europe that easily matches those of

our competitors. This has resulted in a strong market

position. Last year, our services to Asian destinations

achieved enormous growth in profitability, and our

European network has also become more profitable.

This may be partly attributed to implementation of a fully-

fledged seven-bank system, ensuring that flights are

better spread across the day, avoiding excessively high

peaks. This allows us to deploy staff and equipment more

efficiently. And we also create room for more flights.

It also bears mentioning that, next to passenger opera-

tions, cargo operations are now also increasingly profit-

able. However, the results for Engineering & Maintenance

(E&M) are still under some pressure.”

The balance sheet boasts an enormous operating cash flow of close to 1 billion euro, almost 600 million euro (after investments) of which is free cash flow. In short, our bank balance is looking very healthy, but still there is a drive to further reduce costs. Why?

“We have been able to make considerable investments

in new fleet, fleet related items (such as engines) and

strategic investments in the field of IT. At the same time,

KLM has produced a positive free cash flow for four

consecutive years: 124 million euro in 2004/05, 166

million euro in 2005/06, 138 million euro in 2006/07, and

539 million euro in 2007/2008.


But further cost reductions remain a necessity. We

succeeded in reducing unit costs by 0.1% (exclusive fuel

costs) this year. That’s a reasonably good result, but we

need to be even more ambitious. We are faced with rising

inflation, relentlessly high fuel prices, and rising supplier

costs. That means we must achieve further efficiency gains

in our business processes and continue to improve our

purchasing policy.

Cooperation with Air France offers us enormous benefits.

We now have a basis for comparing practically all business

processes and, in so doing, we can learn from one another

how to tackle business even more efficiently. We will be

engaging in more joint purchasing. But that doesn’t mean

KLM will soon be using exactly the same crockery, cargo

trucks and desks as Air France. On the contrary, there may

be sound arguments to choose for another product. But this

will need to be properly substantiated.”

How do you explain these good results when fuel prices are soaring to unprec-edented heights?

“The entire industry is, of course, faced with extremely

high fuel prices. These costs were in 2007-08 offset

significantly by the low dollar rate – because oil is tradi-

tionally paid for in dollars. Only E&M benefited less,

because some of its revenues are paid out in dollars.

Also, our long-term fuel hedging policy was highly suc-

cessful once again, compensating for the effects of the

extremely high oil price. Here too we are best in class.

And we fly more economically, of course, thanks to our

fleet renewal program that has brought us the Boeing

777-300, which reduced fuel burn by up to 25%. That is

good for our results and for the environment.”

Do you expect the year ahead to be as successful as fiscal 2007-08?

“I think we need to prepare ourselves for a dip in the mar-

ket and further fuel price increases. We are also uncertain

as to the impact of flight tax. If this causes passengers to

head for airports in neighboring countries, this could

indeed be detrimental to KLM’s results. We achieved

fantastic commercial and sales results over the past year.

The coming year will demand greater attention for cost

cutting throughout our organization.”


Key figuresConsolidated figures in millions euro, unless stated otherwise

Revenues

Expenses

Income from current operations

As a % of operating revenues

Profit for the year

Capital employed

Return on capital employed (%)

Net-debt-to-equity ratio

Interest coverage ratio

Traffic figures

Passenger

Traffic (in millions of revenue passenger-kilometers, RPK)

Capacity (in millions of available seat-kilometers, ASK)

Passenger load factor (%)

Cargo

Traffic (in millions of revenue ton freight-kilometers, RTFK)

Capacity (in millions of available ton freight-kilometers, ATFK)

Cargo load factor (%)

Financial position

Cash flow from operating activities

Cash flow from investing activities

KLM Group staff (average number of full-time equivalents)

Permanent

Temporary

Employed by KLM

Agency staff

* restated to IFRS

7,201

6,661

540

7.5

276

4,467

9.0

106

4.4

69,115

82,736

83.5

4,893

6,542

74.8

790

(766)

28,998

1,120

30,118

1,660

31,778

6,442

5,975

467

7.2

255

4,587

8.5

126

3.7

64,125

78,274

81.9

4,744

6,256

75.8

499

(406)

29,156

900

30,056

1,364

31,420

7,698

7,095

603

7.8

516

4,612

10.4

87

7.2

72,367

86,478

83.7

4,823

6,511

74.1

754

(137)

28,740

1,781

30,521

2,034

32,555

8,028

7,277

751

9.4

291

4,675

8.3

57

7.5

75,073

90,563

82.9

4,947

6,675

74.1

999

(438)

28,946

2,059

31,005

1,997

33,002

2007/08 2006/07 2005/06 2004/05*


Air France - KLM

Air France S.A. KLM N.V.

Shareholder structureKLM’s shareholder structure is outlined below:

Holding company

Airline

AIR FRANCE KLM holds:

1 all KLM priority shares and a proportion of the common

shares, together representing 49% of the voting rights in

KLM;

2 the depositary receipts issued on the common KLM

shares in excess of the 49% of the nominal share capital

and the voting rights in KLM. The depositary receipts

carry the beneficial ownership but not the voting rights of

the underlying common KLM stock;

3 the depositary receipts issued on the A-cumulative

preference shares, which carry the beneficial ownership

but not the voting rights of the underlying A-cumulative

preference shares;

4 the depositary receipts issued on the C-cumulative

preference shares, which carry the beneficial ownership

but not the voting rights of the underlying C-cumulative

preference shares.

Stichting Administratiekantoor KLM (SAK I) has 32.9% of

the voting rights in KLM on the basis of common shares

and A-cumulative preference shares.

Stichting Administratiekantoor cumulative preference

shares C KLM (SAKII) has 11.3% of the voting rights in

KLM.

The State of The Netherlands has the A-cumulative

preference shares, which represent 5.9% of the voting

rights. The State of The Netherlands has an option to take

an interest of up to 50.1% in the issued capital of KLM in

certain circumstances.

Airline

SAK I

Stichting Administratiekantoor KLM I

SAK II

Stichting Administratiekantoor

cumulative preference shares C KLM II

State of The Netherlands


4.6%

3.1%

(0.5%)

(1.4%)

2.5% 2.6%

change in freight ton kilometers capacity in %

change in freight ton kilometers traffic in %

07/08

06/07

05/06

5.7%

7.8%

4.5%4.7% 4.7%

3.7%

change in seat kilometers in %

change in passenger kilometer in %

07/0806/0705/06

10

20

30

40

50

60

70

80

90

100

07/0806/0705/06

83.7%83.5% 82.9%

passenger load factor in % (2007/2008: 82.9%)

Passenger Traffic

Freight Traffic

10

20

30

40

50

60

70

80

90

100

07/0806/0705/06

cargo load factor in % (2007/2008: 74.1%)

74.1%74.8% 74.1%


181

63

178

106

166

106

total shopvisitstime & material shopvisits

07/0806/0705/06

Number of engines offered for maintenance (shopvisits)

Fleet composition KLM Group as at March 31, 2008

* Excluding operating leases and training aircraft** Freight capacity at 100% loadfactor

Boeing 747-400 PAX

Boeing 747-400 Combi

Boeing 747-400 ER freighter

Boeing 777-300 ER

Boeing 777-200 ER

Boeing MD-11

Airbus A330-200

Boeing 737-900

Boeing 737-800

Boeing 737-700

Boeing 737-400

Boeing 737-300

Fokker 100

Fokker 70

Fokker 50

Training aircraft

Total consolidated fleet

wide body

wide body

wide body

wide body

wide body

wide body

wide body

narrow body

narrow body

narrow body

narrow body

narrow body

regional

regional

regional

17.3

14.3

4.7

0.1

3.4

13.1

2.0

5.2

7.8

4.6

16.4

15.5

17.6

12.1

17.0

11.7

428

280

-

425

327

294

251

189

171 - 186

149

147

127

103

80

50

13

36

103

16

16

17

14

-

-

-

-

-

-

-

-

5

17

3

2

15

10

10

5

36

10

13

14

20

21

14

8

203

Average age

in years*

Seats Cargo

(tons)**

Total Number

of Aircraft


cockpitcabin crew ground staff women

108

men

2,509

men

24

1,426

women

259

6,797

men

1,293

11,813

women

1,401

4,056

employees abroademployees in the Netherlands

200720062005200420032002

7.1%

6.1%

5.6% 5.5% 5.6%6.0%

employees abroademployees in the Netherlandstotal

07/0805/06 06/0704/0502/03

32,282

31,42027,077

4,343

31,77827,563

4,215

32,55528,320

4,235

33,00228,612

4,390

07/0805/06 06/0704/0503/04

27,07523,544

3,879

3,103

25,543 22,440

2,813

24,815 22,002

2,790

25,231 22,441

2,986

25,829 22,861

employees abroademployees in the Netherlandstotal

KLM Group employees(average number of full-time equivalents inluding agency staff in the Netherlands and abroad)

KLM Company employees(average number of full-time equivalents inluding agency staff in the Netherlands and abroad)

Absenteeisme at KLM Women/men participation 07/08



> 5525-55< 25

8%4%

87%

90%

5%

6%

age structure in %

Staff diversity 07/08


women | men in %

menwomen

56%

41%

44%

59%


part-time | full-time in %

8%

36%

64%

92%

full-timepart-time

87%

76%

8%

13%


women | men part-time in %

menwomen


2003/04

87.7%

2004/05

83.9%

2005/06

85.8%

2006/07

89.5%

2007/08

91.5%

reduction in noise in % with respect to 2000 | 2001

(2007 | 2008: 91.5%)

2003/04 2004/05 2005/06 2006/07 2007/08

fuel consumption in kg (2007 | 2008: 2.55kg)

2.74 kg2.64 kg 2.59 kg 2.59 kg 2.55 kg

2003/04 2004/05 2005/06 2006/07 2007/08

CO2 in kg (2007 | 2008: 8.06 kg)

8.66 kg8.33 kg 8.19 kg 8.18 kg 8.06 kg

2003/04 2004/05 2005/06 2006/07 2007/08

absolute fuel consumption in thousand of tons

(2007/2008: 3,085)

2,7392,865

2,9813,058 3,085

Fuel consumption to transport 100 kg a distance of 100 kilometer

CO2 emissions to transport 100 kg a distance of 100 kilometer

Development of KLM noise energy at Schiphol Absolute fuel consumption


2003/04 2004/05 2005/06 2006/07 2007/08

NOX in g (2007 | 2008: 35.9 g)

36.4 g37.4 g 37.4 g

36.0 g 35.9 g

NoX emissions to transport 100 kg a distance of 100 kilometer


Consolidated balance sheetIn millions of euro after appropriation of the profit for the year

Assets Non-current assets Property, plant and equipment Intangible assets Investments accounted for using the equity method Other financial assets Derivative financial instruments Deferred income tax assets Pension assets

Current assets Other financial assets Derivative financial instruments Inventories Current income tax assets Trade and other receivables Cash and cash equivalents

Total Assets

Equity Capital and reserves Share capital Share premium Other reserves* Retained earnings* Total attributable to Company’s equity holders Minority interest Total Equity

Liabilities Non-current liabilities Other financial liabilities Finance lease obligations Derivative financial instruments Deferred income Deferred income tax liabilities Provisions for employee benefits Other provisions Current liabilities Trade and other payables * Other financial liabilities Finance lease obligations Derivative financial instruments Deferred income * Current income tax liabilities Provisions for employee benefits Other provisions

Total liabilities

Total equity and liabilities* For comparison purposes the fiscal 2006/07 figures have been reclassified

March 31, 2007

4,590 45

159 576 208

24 2,074 7,676

151 114 196

6 1,121 1,2642,852

10,528

94 474 228

2,229 3,025

1 3,026

1,066 2,548

137 117 497 222

97 4,684

1,430 70

565 85

615 -

34 19

2,818 7,502

10,528

March 31, 2008

4,622 58

146 456 713

16 2,226 8,237

202 430 234

- 1,070 1,3323,268

11,505

94 474 797

2,512 3,877

1 3,878

1,185 2,088

215 104 731 179 231

4,733

1,455 23

404 182 636

13 37

144 2,894 7,627

11,505


2006/07

7,698

(4,900)(1,716)

(477)(2)

(7,095)

603 13

616 (233)129

(104)57

569

(63)

506

10

516

516 -

516

2007/08

8,028

(4,944)(1,798)

(474)(61)

(7,277)

751 (198)

553 (208)139

(69)(6)

478

(154)

324

(33)

291

291 -

291

Consolidated income statementin millions of euro

Revenues Expenses External expenses Employee compensation and benefit expense Depreciation and amortization Other income and expenses Total expenses Income from current operationsOther non-current income and expenses

Income from operating activitiesGross cost of financial debtIncome from cash and cash equivalents

Net cost of financial debt Other financial income and expense

Pre-tax income

Income tax expense

Net result after taxation of consolidated companies

Share of results of equity shareholdings

Profit for the year Attributable to: Equity holders of the company Minority interest


Consolidated cash flow statementin millions of euro

Profit for the year Depreciation and amortization Changes in provisions Results of equity shareholdings Changes in pension assets Changes in deferred income tax Other changes Net cash flow from operating activities before changes in working capital

(Increase) / decrease in inventories (Increase) / decrease in trade receivables Increase / (decrease) in trade payables (Increase) / decrease in other receivables and payables

Net cash flow from operating activities Capital expenditure on intangible fixed assets Capital expenditure on aircraft Disposal of aircraft Capital expenditure on other tangible fixed assets Disposal of other tangible fixed assets Investment in equity shareholdings

(Increase) / decrease in short-term deposits and commercial paper

Net cash used in investing activities

Increase in long-term debt Decrease in long-term debt Increase in long-term receivables Decrease in long-term receivablesDividend paid Other changes Net cash flow from financing activities

Effect of exchange rates on cash and cash equivalents

Change in cash and cash equivalents

Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year *

Changes in cash and cash equivalents* Including unrestricted Triple A bonds, deposits and commercial paper the overall cash position and other highly liquid

investments amounts to EUR 1,736 million as at March 31, 2008 (as at March 31, 2007: EUR 1,724 million)

2006/07

516 477 (13)(10)

(201)63

(89)

743

(10)(17)68

(30)

754

(12)(594)

40 (64)14

-

479

(137)

687 (558)

(50)37

(14)-

102

(1)

718

546 1,264

718

2007/08

291 474 225

33 (150)

50 13

936

(47)91 (4)23

999

(25)(554)183 (69)

7 (2)

22

(438)

488 (947)

(15)5

(23)1

(491)

(2)

68

1,264 1,332

68


Colophon

KLM Royal Dutch Airline

Head Office

Amsterdamseweg 55

1182 GP Amstelveen

The Netherlands

Postal Adress

P.O. Box 7700

1117 ZL Schiphol Airport

The Netherlands

T: +31(0)20 - 649 21 16

F: +31(0)20 - 648 80 91

Registered under the number 33014286 in the Trade register of the Chamber of

Commerce and Industry, Amsterdam, The Netherlands

This is an English translation of the original Dutch Language annual review

2007 I 2008, ‘Towards Smart Leadership’

The annual review 2007 I 2008, ‘Towards Smart Leadership’ is also available

online on the KLM website www.klm.com

Design

Ontwerpwerk, Den Haag

Text

Paul Baeten, Arnhem

KLM Corporate Communications, Amstelveen

Lithography and printing

Thieme, Amsterdam


Annual Review

KLM

Royal D

utch Airlines 0

7 | 0

8 Tow

ards S

mart Lead

ership

towards smart leadership - klm royal dutch airlines · towards smart leadership smart alliances...

Documents