Perform 2020 to see Air France-KLM cutting further costs

With the success of Transform 2015, Air France-KLM are looking to achieve further significant cost reductions through their Perform 2020 program. Over three years and as part of Transform 2015, the group achieved savings of €1bn and the next measures are hoping to see costs further reduced by €650m. For Air France and KLM Royal Dutch Airlines this equates to a 1.5% reduction in costs per annum for each of the carriers. “Air France must pursue its transformation to regain profitability while becoming its customers’ carrier of choice,” said Air France Chairman and CEO, Frederic Gagey.
For KLM Royal Dutch Airlines this annual saving will amount to approximately €390m. “The air transport environment is evolving very rapidly. KLM must learn to adapt more quickly if it is to maintain its position in this highly-competitive industry. Perform 2020 is 
a growth plan, designed to cut our costs but also to enable investment,” KLM president and CEO Pieter Elbers confirmed, while also indicating that KLM needed to invest in its operating processes to improve on efficiency and profitability. He continued “Cost reduction notably implies significant productivity efforts where we are targeting at least 4% per year…[ ]…A more horizontal organizational structure is also required.”
It has been stated that Perform 2020 will include a dimension of corporate social responsibility, with targets aimed at the reduction of waste, introducing responsible catering products, and appreciable energy savings. Both Air France and KLM Royal Dutch Airlines are trying to establish a range of initiatives to promote the development of the sustainable biofuels industry. It is understood that KLM’s goal is to achieve a 20% CO2 reduction by 2020 for both on the ground and in the air elements of the airline. This will see the introduction of the Boeing 787-9, and replacement of the Fokker 70 fleet with Embraer E-175s and E-190s as part of the fleet renewal program.
Air France are currently operating one flight a week between Toulouse and Paris-Orly with a biofuel-powered plane under the banner of the Lab’line For the Future operation. “This is our trial route to develop and promote this industry
of the future,” Cagey said. He also pointed out that progressive integration of next-generation aircraft across the group, including the Airbus A350, would “contribute to achieving our ambitious goals
in terms of reducing CO2 and noise emissions.”