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Air France-KLM back in the black

AMSTELVEEN, the Netherlands: Former KLM president and CEO Sergio Orlandini passed away on October 28. He was 94.

Orlandini joined KLM in 1951 and was appointed president & CEO in 1973 – a post he held until his retirement in 1987.

After Albert Plesman, KLM's founder, he was the airline's longest serving chief executive and according to a tribute by current CEO Pieter Elbers, led the company successfully through turbulent times of market over-capacity, fuel price rises, recession and fierce competition.

He also oversaw a typical Dutch solution to the excess capacity with the conversion of KLM B747s into main deck Combi aircraft – a move that led to a 200 percent increase in cargo volumes at yields rarely seen since.

sergio-orlandini klmElbers noted that Orlandini (right) "praised the positive and constructive spirit of the KLM workforce, which in turn respected him enormously", because he believed people formed the heart of the company and that everyone was important.

"We will always be indebted to this icon of our company for his involvement and many years of service he devoted to KLM," added Elbers.

A day after Orlandini's passing, Air France-KLM reported a net profit of €480 million for Q3 2015 ending September 30 on revenue of €7.4 billion, a 10.8 percent increase in revenue over the same period last year.

Revenue for the first nine months rose 5.4 percent to €19.7 billion to produce an operating result of €666 million – up from just €40 million in 2014. The group's net loss fell from minus €533 million to minus €158 million year-on-year.

Air France reported revenue of €12.4 billion for the year to September – up 6.9 percent – and an EBITDA of €1.14 billion compared to €618 million in the previous period. KLM revenue totaled €7.5 billion for the nine months, a rise of 3.0 percent year-on-year, to produce an EBITDA of €742 million - an increase of €96 million over 2014.

Group cargo revenue for the same period was €1.8 billion, down 7.8 percent compared to the first nine months of 2014, and the cargo operating loss expanded from minus €141 million to minus €222 million year-on-year. With the retirement of all MD-11 freighters by June next year, AF-KL-MP will operate five full-freighter aircraft at the end of 2016.

Commenting on the results, group chairman Alexandre de Juniac said: "A favorable environment, principally characterized by lower fuel prices and strong demand over the summer, resulted in an improvement of Air France-KLM's results during the third quarter and first nine months of 2015.

"This improvement is however not sufficient to bridge the competitiveness gap with our competitors or to generate the financial resources required to finance the group's growth." De Juniac said implementing the group's 'Perform 2020' plan would be "vital" to achieve both these goals and added: "The management invites union representatives to resume negotiations as soon as possible as they are crucial for the success of this plan."

Orlandini would probably have said something similar.

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