KLM uk could be split from its London Stansted-based low-fare subsidiary Buzz and merged into KLM's wholly-owned regional subsidiary KLM Cityhopper as part of a major revamp the major is considering for European operations.

The move would also involve the Dutch carrier's Amsterdam-based charter airline Transavia being folded into the UK-based no-frills carrier and taking the Buzz brand.

The Dutch flag carrier says these changes are "on the table" as part of a wide-ranging review of its European network and businesses. Such a re-organisation would offer savings from fleet commonality because KLM uk and KLM Cityhopper operate Fokker aircraft, while Buzz and Transavia fly Boeing 737s. Transavia also operates a low-fare brand - Basiq Air - on some of its European network.

KLM had hoped to merge Transavia, in which it holds an 80% stake, with Martinair, in which it has a 50% shareholding, to maximise synergies in the leisure market and at their Amsterdam base. However, the European Commission has refused to allow KLM to buy Royal Nedlloyd's 50% stake in Martinair, citing competition concerns.

Martinair plunged into the red in the year to 31 December 2000, although an operating profit in the quarter ending 30 September last year suggests a tough cost-cutting plan is producing results. Transavia saw net profits almost halve to $11 million in the year ending 31 March 2001.

Buzz, by contrast, is heading for break-even by year-end - as planned, says KLM. And Amsterdam-based KLM Cityhopper has been "very successful" in plugging the gap left by German regional Eurowings, which last year ended feeder services from Germany and Austria to Amsterdam for KLM, after a tightening of ties with German flag carrier Lufthansa.

Source: Flight International