One of the world’s first scheduled international airlines.
In 1919, the young Dutch military aviator Albert Plesman founded KLM with support from both industry and government to establish the national airline for the Netherlands. From its early beginnings, KLM had strong government assistance. The Kingdom of the Netherlands had granted the fledgling aviation enterprise the right to bear the “Royal” title as part of its designation. Actual government participation in the company has varied over the years from a majority shareholder position in the early days to about a 14 percent stake in 2001.
KLM began scheduled service on May 17, 1920, with flights between Amsterdam and London. Four years later, the airline initiated its first intercontinental flights to Indonesia, one of the Dutch colonies. From that point on, KLM’s route structure expanded steadily until World War II, when all regular flight operations were suspended. During the German occupation of the Netherlands, the KLM headquarters was moved to Indonesia, and only a few unscheduled flights took place.
After the war, scheduled service resumed, and in May of 1946, KLM opened transatlantic services to the United States. During the decades that followed, new services were added to North and South America, Asia, Africa, and some parts of the Caribbean. After airline deregulation in the United States (1978) and initial efforts toward liberalization in Europe, KLM management began to concentrate on establishing partnerships to expand the KLM network. By 2000, KLM and its national and international partners operated a route network connecting about 150 cities in more than seventy countries on six continents.
KLM entered service with a chartered De Havilland DH-16 in 1920. With government support, the KLM fleet grew steadily. Until World War II, the carrier operated aircraft predominantly manufactured by the Dutch company Fokker. After the war, the KLM fleet was rebuilt, mainly with American Douglas and Lockheed aircraft. In 2000, KLM expanded its fleet from 68 aircraft in 1946 to more than 120 airliners, including aircraft owned by its immediate partners. At the beginning of the twenty-first century, KLM’s fleet consists mostly of Boeing aircraft, such as the 737 and the 747.
During the decades following World War II, KLM lost several Douglas and Lockheed aircraft in air crashes. Especially notable was KLM’s involvement in the world’s most deadly aviation accident, the collision of a KLM B-747 and a Pan Am B-747 on March 27, 1977, on a foggy runway at Tenerife Airport, Canary Islands. In the ensuing carnage, 583 people were killed, and nearly all of the survivors were injured to a significant degree.
Following this collision, KLM’s safety record improved significantly. In the period from 1978 to 2000, the company lost only one aircraft, a Saab 340, belonging to KLM Cityhopper, the KLM regional carrier. One crewmember and two passengers were killed in that crash.
Beginning in the late 1970’s, KLM’s management decided to diversify the company to manage the cyclical nature of the airline industry. Hotel chains, technical services, and management consulting became part of the overall business activities at KLM. Other Dutch carriers, Martinair and Transavia Airlines, also became part of the overall KLM organization. By 2000, KLM’s subsidiaries included the regional carrier KLM Cityhopper, KLM UK, Transavia, and Martinair. Main divisions included KLM Cargo and KLM Systems Services.
When air transportation liberalization efforts got underway in Europe in the 1990’s, KLM decided to aggressively develop its hub in Amsterdam by establishing partnerships and alliances with numerous other airlines that would feed traffic into Schiphol Airport, KLM’s home base. However, faced with the limited growth capabilities at its hub, KLM began to pursue a multihub system in the late 1990’s to guarantee its growth potential into the new millenium.
One of the initial KLM alliances was with Northwest Airlines of the United States. KLM acquired a significant stake in this carrier in 1989 but later sold its equity position at a profit in 1997. KLM and Northwest remained global partners and signed a long-term joint venture agreement that same year. In 1998, KLM established another highly publicized alliance, with Alitalia, the national flag carrier of Italy. Unfortunately, the conditions of the agreement were not met, and KLM management decided to terminate the partnership. Challenges that continue to face KLM include competition on the transatlantic routes from American megacarriers, low-cost Far East carriers expanding their global reach, and integrators with one-stop-shopping freight services. To meet these challenges, KLM management decided to position the carrier as a potential partner in a worldwide airline alliance.
“Airline of the Year.” Air Transport World, February, 1998, 39-40. A description of the annual achievement award presented by Air Transport World in recognition of excellence in the airline industry. Dienel, Hans-Liudger, and Peter Lyth, eds. Flying the Flag: European Commercial Air Transport Since 1945. New York: St. Martin’s Press, 1998. An analysis of seven European flag carriers and their prosperity in the new age of globalization in the airline industry. Hengi, Bi. Airlines Worldwide. 3d ed. Leicester, England: Midland, 2001. An excellent review of essential data on more than 350 airlines worldwide, with an overview of the different aircraft fleets. Toy, Stewart, et al. “Flying High.” Business Week, February 27, 1995, 90-91. An excellent overview of KLM’s emerging global strategy and its partnership with Northwest Airlines during the early 1990’s.