Pieter Elbers will step down as CEO and chairman of KLM next year after the airline’s board decided not to renew his term for a third term. “Given the expiration of his second term, which provides the Supervisory Board with a natural moment of reflection, we have, after consultation with Pieter, concluded not to begin a third term,” said Cees ‘t Hart, chairman. of the KLM Supervisory Board. board of directors, noted in a statement released Thursday evening. The search for a successor comes at a time when “the restructuring plan has been largely implemented, which positions KLM well for turnaround and further development,” he explained. “With 30 years at KLM, 11 years on the board including two terms as CEO, Pieter has a huge track record and significance to KLM. Partly for this reason it is important that we let’s be able to achieve a smooth leadership transition.
Analysts see the departure of Elbers from the head of KLM as a decision by Air France-KLM to continue the integration of the Franco-Dutch company. Although the creation of Air France-KLM in May 2004 marked the first merger between two European national carriers, the integration between the French and Dutch divisions lagged behind that of other European airline groups created later, such as as Lufthansa and IAG. The fact that KLM has outperformed its French airline operationally and financially and that KLM has managed to push through restructuring rounds without massive strikes, unlike Air France, has deepened long-standing tensions.
The surprise purchase in February 2019 of an additional 12.68% stake in the Air France-KLM group by the Dutch state has highlighted tensions at the highest political level. The Dutch government felt that it needed to increase its stake to bring it to the same level as French state ownership and “to be able to directly influence the future development of Air France-KLM in order to optimally ensure the Dutch public interest”. France argued that Air France-KLM should remain free from “state interference”.
Elbers was a strong advocate of KLM’s autonomy within the group, an approach not well liked in Paris and especially by Air France-KLM CEO Ben Smith. Air France-KLM appointed Smith, a former Air Canada executive, as CEO in 2018 in a bid to improve the group’s profitability.
The order in December 2021 by Air France-KLM of 100 aircraft of the Airbus A320neo family with purchase rights for 60 additional aircraft, to renew the fleets of KLM, Transavia Netherlands and Transavia France sent the last signal of the reduction of the influence of KLM and Elbers. KLM and Transavia are long-time narrow-body Boeing operators. Dutch unions were quick to express concern that the move from Boeing to Airbus would result in a transfer of MRO work from the Netherlands to France.
An earlier effort by Smith to oust Elbers in 2019 failed after KLM employees organized a petition in support of their CEO.
Employees started a similar online petition to keep Elbers at the helm of KLM. The organizers called on the Dutch government, which currently holds a 9.3% stake in the group, “to investigate the reasons why Pieter Elbers is leaving KLM and hope that everything will be done to review the decision of the board of directors”. . France is currently the largest shareholder, with a 28.6% stake.
In a short statement, Smith said he was “grateful for the spirit in which this process [to not renew Elbers’s mandate as CEO] took place.
“I thank Pieter for his commitment and know that I can count on him and the entire KLM team to ensure a smooth transition to his successor,” Smith concluded.
For his part, Elbers maintained a diplomatic posture.
“I’m passing the baton with confidence,” commented Elbers. “It goes without saying that I am committed to supporting KLM in this transition to a new leadership. I am extremely proud of this company and its fantastic employees. Especially in these turbulent and difficult times, they remain KLM’s strength.
Elbers will leave KLM in May 2023 at the latest. Coincidentally, Smith’s four-year tenure as CEO of Air France-KLM also ends that month.