Airline boss admits 'tensions' as KLM marks 100 years

[SCHIPHOL, Netherlands] The chief executive of Air France-KLM admitted "tensions" over the future of the airline alliance as the Dutch carrier marked its 100th anniversary on Monday.

Frictions burst into the open earlier this year when the Dutch government unexpectedly raised its stake in the group to almost the same level as the French state.

The surprise move followed years of disagreements over the profitability of Air France and KLM, which merged in 2004 but continue to operate largely separately.

"Yes, there are some tensions," Air France-KLM's Canadian CEO Ben Smith told a press conference in a hangar at Amsterdam's Schiphol Airport.

"I think that when you have two airlines in a group that are so important for each country, and mean so much in each country and in the history of each country... it's only natural to see that each government wants to secure their interests for the future."

Mr Smith added that the French and Dutch governments "are looking to ensure both companies a strong future."

In February, the Dutch government caused a political storm when it unexpectedly lifted its stake in the airline to 14 per cent, just shy of the 14.3 per cent held by France.

The move was prompted by doubts over the alliance's growth strategy, and worries that Dutch interests were being neglected while Air France pilots and crews were resisting the hard choices needed to streamline operations.

A series of strikes at Air France earlier this year forced flight cancellations over several months.

KLM chief Pieter Elbers said it was a good step that Paris and The Hague were in talks about the issue.

"What is important is that there are discussions between the Dutch government as a new shareholder and the French government as an existing long-term shareholder," Mr Elbers said when asked about the tensions.

"What's relevant for us is that they take the time to come to a good understanding in order to move forward as a group and for the individual airlines," added Elbers, speaking against a backdrop of scenes from the Dutch airline's century-long history.

AFP