Why are we seeing so many dramatic initiatives from European airlines — such as the Bollywood gig by Finn Air and now this KLM Predictions app — aimed especially at India?
Well, the potential of India, with its 1.3 billion people, is enormous. Whatever percentage you put against 1.3 billion, even if it is a small percentage, you are talking about a huge potential number of fliers. The opportunity is huge.
So what are you doing to grab the market share here?
We have consolidated our operations to three major networks — we fly to Mumbai, Bangalore and Delhi — for now it is sufficient we think (Air-France KLM has the rights to land in six cities but is exercising only three now). We operated to Chennai and Hyderabad and that was unsuccessful. The results were too negative for us to continue the adventure.
We are looking at opportunities every month. I would say we are at the starting block to activate new programmes. We are a public traded company, and obviously we need to show some return to our shareholders and in the current European aviation scenario, things are quite difficult. So we are looking at different ways. And talks with an Indian carrier are definitely in our books.
But, if it is about full integration with an Indian carrier or foreign direct investment in India, then the answer is no . What we are looking at more here is the possibility of commercial agreements with other carriers.
Are there any talks to get Air India on board as partner in your Sky Team alliance?
No, we are not talking to Air India. We do know they are without a global partner. In fact, in India's international aviation scene, nobody has a global partner. We are definitely open and interested in making an Indian carrier a member of the global Sky Team, but it's not that we are in a super rush to do it.
So have you been approached by any Indian carrier?
Everybody is talking to everybody. But to be very honest, the aviation landscape in India is very tough. People are finding it difficult to make even a modest profit. Certainly not like Delhi International Airport Ltd (DIAL) that is saying that its new plan is based on return on capital of 16 per cent. The IATA airlines in the last 15 years have made profit of just 0.3 per cent. We cannot make a profit in India at the moment. At least those airlines, where you can see the annual reports, you will see very few of them are making money in India, especially the international ones.
The Gulf carriers must be posing a big threat to you?
Gulf carriers are a concern, but whether they are a threat I don't know. The market is growing and everybody is interested in grabbing the additional seats that are coming in. The Gulf carriers certainly have a respectable product and are doing a great job, but for Indian passengers I am not sure the stop-over in Dubai or Sharjah is such a great idea. If you fly with us, we get you to Europe in seven hours. The uninterrupted stretch is important for your well-being and I think passengers would opt for that.
How is the Air-France, KLM tie-up working — especially as Air France is seen as a stodgy Government carrier and KLM a bit naughty and aggressive?
That's a new perception I am hearing (laughs). Both are flag carriers of their countries. The Government held a majority stake in Air France for a much longer period than in KLM. What I mean by that is KLM was privatised many years before Air France was. I don't think there is a vast difference — the only one being one company is Dutch and the other French.
But there are always integration issues?
And that is why we have kept the two products separate and kept different names. When Delta merged with Northwest, they called it Delta post-merger. When United and Continental merged, they rebranded it as United.
We have still kept our products separate, and followed a dual-brand strategy. KLM is maybe a little bit more young at heart, although we are the oldest airline in the business. KLM is also a little bit more focused on the Web and social media. Air France may not be as progressive. Maybe for a smaller partner, it is easier to try these things out.