KLM is working on package travel, tour operators angry: ‘The government should never allow this’



KLM announced on Friday that it has taken a majority stake in Airtrade, a company in Cologne with Dutch owners that specializes in the purchase and processing of airline tickets for the travel industry.Image Guus Dubbelman / de Volkskrant

KLM announced on Friday that it has taken a majority stake in Airtrade, a company in Cologne with Dutch owners that specializes in the purchase and processing of airline tickets for the travel industry. Airtrade has been working with KLM for some time. The company supplies the technology with which the airline has been allowing customers to book hotels and rental cars since 2015.

In that year, KLM started with ‘Package Deals’, a form of package travel that is processed via Airtrade. The airline now wants to expand this into KLM Holidays, which, in the words of Harm Kreulen, director of KLM Netherlands, ‘should become a leading tour operator’.

This puts KLM under the pigeons of the tour operators, some of which are customers who suddenly get their supplier to the table as a competitor. They are therefore not happy. ‘KLM receives billions in state aid to survive the corona crisis. But we wonder whether they can use that money to compete with us, ‘says Corendon director Steven van der Heijden. His colleague at Sunweb, Mattijs ten Brink, also speaks of unfair competition. “The government should never allow that.”

Van der Heijden says the government has come to the aid of KLM to keep the network of connections for the Netherlands going. “That has nothing to do with holiday travel.” He has no problem with KLM selling package travel through his website, but ‘they have to arrange those hotels and rental cars through us’.

Course

Nevertheless, KLM’s course should not come as a surprise to the travel industry. In November 2019, Harm Kreulen said in an interview with the trade magazine Travmagazine about a role as a tour operator. ‘With KLM Package Deals we are somewhat involved in our own tour operation and that goes well. I definitely see opportunities to increase that. If this requires our own accommodations or our own purchasing of accommodations, we will not fail to do so. ‘

Those plans did not prevent Corendon from signing a new contract with KLM for flights to Curaçao last February. The companies had been doing business since 2014. It was agreed that Corendon will purchase nearly a quarter of a million seats from KLM for three years from the winter of 2020. With this, Corendon secured capacity at KLM on flights to and from Curaçao for the entire year. The tour operator operates two holiday complexes there, at Willemstad and Jan Thiel.

In the press release that was distributed last year when the deals were closed, Corendon acknowledges that KLM is becoming a direct competitor. “For KLM, the agreement will help to further strengthen its position in the market for package holidays to the popular holiday island.” But then together with us, with our hotels, Van der Heijden says now.

Tricky point

KLM’s relatively large market power could also become a tricky issue in the Airtrade deal. Together with Transavia and parent company Air France-KLM, the airline is Schiphol’s largest customer and accounted for more than 60 percent of flights to and from the airport before the corona crisis. ‘Almost 70 percent of customers are leisure travelers,’ says Van der Heijden: who flies for a holiday or a city trip.

Corendon does not intend to terminate the Curaçao contract with KLM. The company, like competitor TUI, has its own fleet of aircraft with which it serves destinations in Europe and just beyond, but does not have aircraft for long-haul flights. Van der Heijden. “Now is not the time to invest in that either.”

Against Travmagazine Airtrade CEO Jeroen Matron says that discussions about the importance were already underway before the corona crisis broke out last year. ‘There is currently a lot that is not possible on the market, but soon all kinds of things will be possible again and of course you can sort accordingly.’

KLM director Kreulen says that the company “must prepare for a market recovery again.” The investment is based on the expectation in the travel industry that consumers will take the plane again sooner and faster than the business traveler. Kreulen further says that Airtrade will remain an independent company.

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