Pieter Elbers To Step Down as CEO of KLM Next Year

 - January 14, 2022, 10:20 AM
KLM chief executive Pieter Elbers (Photo: Air France-KLM)

Pieter Elbers will leave his post as CEO and president of KLM next year after the airline’s board decided not to renew his mandate for a third term. “In view of the expiration of his second term, which provides the supervisory board a natural moment for consideration, we have, after consultation with Pieter, concluded not to enter into a third term,” Cees 't Hart, chairman of the KLM supervisory board, noted in a statement released Thursday evening. The search for a successor comes at a time when “the restructuring plan has largely been implemented, which positions KLM well for recovery and further development,” he explained. “With 30 years at KLM, 11 years on the board of management including two terms as CEO, Pieter has an enormous track record and significance for KLM. Partly for this reason, it is important that we are able to achieve a smooth leadership transition.”

Analysts see the departure of Elbers from the helm of KLM as a move by Air France-KLM to further the integration of the Franco-Dutch company. Even though the establishment of Air France-KLM in May 2004 marked the first merger between two European flag carriers, the integration between the French and Dutch divisions lagged that of other and later-created European airline groups such as Lufthansa and IAG. The fact that KLM operationally and financially outperformed its French sister airline and that KLM managed to push through restructuring rounds without massive strikes, in contrast to Air France, deepened long-standing tensions.  

The surprise purchase, in February 2019, of an additional 12.68 percent share in Air France-KLM group by the Dutch state highlighted the tensions at the highest political level. The Dutch government reasoned it needed to increase its shareholding to bring it on par with the French state’s ownership and “to be able to directly influence the future development of Air France-KLM in order to optimally ensure the Dutch public interest.” France maintained that Air France-KLM must remain free of “state interference.”

Elbers stood as a staunch defender of KLM’s autonomy within the group, an approach not appreciated in Paris and not least by Air France-KLM CEO Ben Smith. Air France-KLM appointed Smith, a former Air Canada executive, as CEO in 2018 in a move meant to improve the profitability of the group.

The December 2021 order by Air France-KLM for 100 Airbus A320neo family aircraft with purchase rights for 60 additional aircraft, to renew the fleets of KLM, Transavia Netherlands, and Transavia France sent the latest signal of KLM’s and Elbers’s diminished influence. KLM and Transavia are long-time Boeing narrowbody operators. Dutch unions promptly expressed concern that the shift from Boeing to Airbus would result in a shift of MRO work from the Netherlands to France.

An earlier effort by Smith to oust Elbers, in 2019, failed after KLM employees organized a petition in support of their CEO.

Employees have launched a similar online petition to retain Elbers at the top of KLM. The organizers have called on the Dutch government, which currently holds a 9.3 percent stake in the group, “to investigate why Pieter Elbers is leaving KLM and hope that the utmost will be done to review the board's decision.” France currently stands as the largest shareholder, with a 28.6 percent stake.

In a short statement, Smith said he was “grateful for the spirit in which this process [to not renew Elbers’s mandate as CEO] has been held.

“I thank Pieter for his commitment and I know I can count on him and the entire KLM team to ensure a smooth leadership transition with his successor,” Smith concluded.

For his part, Elbers maintained a diplomatic posture.

“I am handing over the baton with full confidence,” Elbers commented. “It goes without saying that I am committed to supporting KLM in this transition to new leadership. I am extremely proud of this company and its fantastic employees. Especially in these hectic and difficult times, they remain the strength of KLM.

Elbers will leave KLM in May 2023 at the latest. Coincidentally, Smith’s four-year mandate as CEO of Air France-KLM also ends that month.