Air France-KLM works with BCG on the “New Horizon” strategy


Air France KLM is about to launch a new strategic transformation program. The initiative will adjust the airline’s governance and realign its internal organization, while making it more agile and data-driven to meet changing demands.

Under the leadership of CEO Ben Smith, Air France-KLM has worked tirelessly to improve the airline group’s efficiency. The latest development in this area is a new strategic roadmap, called “New Horizon”. By focusing on financial growth and helping the carrier adapt to changes in the passenger and cargo market, the plan aims to help the group bounce back after two difficult years.

In its latest quarterly results, Air France KLM recorded a net profit of 552 million euros, adding to the inevitable quarters of losses suffered during the Covid-19 pandemic, as flights became almost impossible.

Now, however, green shoots of recovery are appearing, as passenger numbers take off and efficiency programs launched during Covid-19 bear fruit.

As a result, the group – which has a fleet of more than 500 aircraft and serves more than 300 global destinations – already hopes to reach operational breakeven in the second or third quarter of 2022. New Horizon takes a longer-term view, however. on the future of the group.

Developed in collaboration with Boston Consulting Group (BCG), the new strategy aims to further centralize activities with the group, reduce unnecessary management levels and create new synergies between the two autonomous business units of Air France and KLM. . BCG has been one of the company’s most used strategic advisors over the past decade.

While New Horizon’s plan has yet to be officially unveiled, insiders familiar with the matter have informed French and Dutch media that the roadmap also offers recommendations on how the airline carries out maintenance on its planes. . This includes overhauling its fleet operations – primarily Boing, Airbus and Embrear – and the carrier’s cargo business.

KLM and BCG

In the early days of Covid-19, KLM also engaged the consultants of Boston Consulting Group to draft a rapid recovery reorganization plan, aiming to bring costs down as quickly as possible to match the dive in demand. This was similar to work done by BCG for Lufthansa, TAP Air Portugal and last year with Croatia Airlines.

BCG had already been on board KLM’s operations division for years, working as an advisor on maintenance processes. In 2019, this collaboration even led to a mergerin which both parties help other airlines with their transformation towards operational excellence. Years earlier, BCG had also played a role in the development of KLM’s High Performance Organization plans.

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