KLM is considering launching another attempt to buy the 50% of Martinair it doesn't already own.
KLM says its "main interest" in Martinair is its cargo operation and that if the deal goes through it may sell off Martinair's leisure passenger operation.
KLM will need a change of attitude in the European Commission if it is to take full control of Martinair. A previous attempt at buying the stake, which is owned by shipping group AP Moeller Maersk, was blocked by the EC in 1998 on the grounds that it would lead to a dominant position in the Dutch market.
KLM has launched a study to try to determine if the EC may now be more willing to sanction a deal, possibly with conditions attached that would be palatable from KLM's point of view. The EC gave the go-ahead to the merger between travel groups Thomas Cook and MyTravel in May, citing the changing competitive landscape brought about from low-cost competition.
"We will see if the situation has changed, and what conditions might be laid down," says KLM, pointing to the presence of easyJet and TUI-owned ArkeFly in the Dutch market, as well as the growth of low-cost options nearby across the German border in Dusseldorf and Cologne/Bonn.
The study, which is expected to be completed by early summer, is being carried out by a three-person committee consisting of one representative from KLM, one representative from AP Moeller Maersk and former Austrian Airlines chief executive Vagn Sorensen acting as independent chairman.
Martinair refuses to comment on decisions that involve its shareholders, but it is believed to be keen to maintain its mixed cargo/passenger business model. The carrier incurred a net loss of €7 million ($10 million) in 2006, compared with a net profit of €7 million in 2005, partly due to high fuel prices but also due to the phasing out of ageing Boeing 747-200 freighters and a poor performance from Colombian subsidiary Tampa Cargo.
Cargo activities saw a loss of €3 million on €798 million turnover, while passenger operations lost €15 million on €377 turnover. Martinair is in the early stages of simplifying its fleet structure and has indicated it wants to eventually replace its Boeing 767-300ERs with 787s or Airbus A350s.
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Source: Airline Business
