KLM Royal Dutch Airlines is developing a suite of products, programs and distribution channels for corporate accounts to address varying needs in the marketplace. The carrier also recently formulated a long-term strategy for its low-cost Buzz subsidiary, tweaked its loyalty program and managed to post a net profit of e86 million in the latest fiscal quarter.
KLM divides its corporate clients into local and multinational accounts. Of the airline's 50 largest clients, 10 are joint contracts with partner Northwest Airlines, including DaimlerChrysler, Ericsson, the European Space Agency, General Electric, IBM, Philips Electronics and Shell. To service accounts of varying size and scope, KLM has created KLM One, an umbrella concept encompassing several initiatives. Within KLM One, the carrier developed Total Travel Manager, an online tool based on the GetThere booking engine that includes traveler preferences, corporate negotiated hotel and car rental rates, bookings on other airlines and customizable corporate policy functionality. It also provides detailed travel management reporting. KLM acknowledged the program "is not for the faint-hearted," because it requires commitment to cultural change within an organization and reduces dependence on and costs associated with travel agencies.
All other corporate booking tools will be integrated into the KLM Direct Interface, a project still in development that would cut out global distribution system and credit card fees. "The objective here is to route all KLM segments into our own res system," said Michiel Verhaagen, KLM vice president of global business. "A direct interface would be more cost efficient for us to distribute tickets and leaves room to negotiate."
In July, KLM began piloting with a few customers KLM Connect, a tool designed for corporate intranets that includes negotiated net rates, and in a few months will add all gross fares of KLM and Northwest. Two large corporations recently began using the system, which also includes travel policy parameters and detailed reporting while cutting out agency, GDS and credit card fees. Also on KLM's plate is BlueBiz, a new tool for small and medium-size entities developed in association with travel agents. "It is a segment where we can grow marketshare," Verhaagen said. The airline this summer also stuck its toe into the corporate charter niche, through its KLM Cityhopper regional operation, providing tailored charter services to three clients.
The carrier now is working with Prism Group to finalize terms of a European pilot. "The objective is to have a seamless corporate product with Northwest," Verhaagen said. KLM's use of the Prism data consolidation and analysis system has been expected since Northwest earlier this year launched the Prism-enabled CorpNet
(BTN, June 24).On the settlement side, KLM for more than two years has offered the Traxxer Corporate Card, a Universal Air Travel Plan clone developed with Dutch bank ABN Amro that centrally bills corporate accounts while providing travelers with a normal "walk-around" card, which entitles travelers to such airline services as lounge access and dedicated checkin.
Meanwhile, KLM last month relaunched the Flying Dutchman loyalty program with a new system based on actual miles flown, new membership levels and other adjustments.