KLM is considering delaying a decision on its planned purchase of up to 34 widebodies beyond the first half of 2002, as it undertakes capacity cuts and negotiates more short-term alliances in the wake of the downturn in traffic.

The airline issued a request for proposals (RFP) earlier this year to manufacturers and leasing companies for 250-300 seaters to replace its Boeing 747 Classics, MD-11s and possibly 767s for delivery from 2003-4. The RFP "has a lot of flexibility", says KLM, which will allow the purchase of between 13 and 34 aircraft to achieve long-term cost cutting. "It is a decision for a long-term strategy," says KLM.

KLM's managing director and chief financial officer Rob Ruijter said on 1 November, announcing the Dutch carrier's half-year financial results, that more short-term alliances and "tactical codeshares" are planned, similar to the six-month tie-up agreed with Continental Airlines. "The focus is how to deal with the current situation," said Ruijter, and relationships with a number of airlines are expected to be unveiled within the next month - among them British Airways. The European Commission has given a green light to the two carriers discussing scheduling of flights to enable them to better match capacity to demand and increase yields.

Meanwhile, three of KLM's Boeing 747-300s are being grounded as part of its fleet reduction - two of them permanently - and short-haul capacity is being cut by the equivalent of three Boeing 737s. Although Ruijter conceded "there is scope for further down-sizing", the Dutch carrier will still take a new 747-400 early next year.

KLM's operating income for the half year was €106 million ($95 million), with net income €46 million. Although the airline operated at a profit during the second quarter, the prognosis for the full year is bleak, with a "significant operating loss" anticipated.

Source: Flight International