KLMUK plans low-cost operation

KLMUK plans low-cost operation

KLM UK is expected to launch a low-cost carrier out of Stansted after completing a review of its operational costs.

UK sales director Peter Cornwall said the airline was being forced to examine its cost structure because of industry-wide pressure on yields.

“Any route we fly must make a return on capital employed in excess of 8%,” he said. “You either cut costs to make money or look for other areas where yields are higher. It’s a very difficult environment out there.”

Cornwall claimed KLM UK would continue to sell through the trade if it launched a low-cost carrier. However, he refused to be drawn on what commission level might be set. “We have to look at every aspect of distribution. One channel would be commission,” he said.

Cornwall said the airline had not looked at what routes a low-cost carrier might operate.

“I am not ruling in or out a low-cost carrier. Before you can make a decision you have to evaluate all the components of a low-cost operation,” he said.

n The European Commission has approved the alliance between KLM and Alitalia. However, the airlines have agreed to give up slots to potential competitors on the Amsterdam-Milan and Amsterdam-Rome routes.


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