Dutch airline KLM announced that it will resume almost all of its international routes this year as the introduction of vaccines offers hope of revitalizing the travel industry.
Pieter Elbers, President and CEO of KLM, told CNBC that the airline will also add a new route to the Saudi Arabian capital, Riyadh, although the capacity and frequency of all flights remain limited.
“We assume that we will be back in around 90-95% of all destinations that we flew to before Covid,” Elbers told “Capital Connection” on Wednesday.
“However, we have to say that there will be less capacity, so that the frequencies will be significantly lower compared to the situation in 2019.”
The speed and extent of this resumption will vary from region to region based on vaccination rates, he said.
We clearly expect the Europe-Asia portion to be slower than some of the other recoveries.
President and CEO, KLM
The US domestic air travel market has already shown strong signs of recovery amid rising vaccination rates, he said. Europe should follow suit as vaccination rates rise, which will also improve prospects for transatlantic travel.
However, Asia will recover more slowly.
“We naturally expect that the Europe-Asia part will be slower than some of the other recoveries in view of the very strict regulations in some countries with regard to quarantines or other measures for entry,” said Elbers.
Expansion in the Middle East
In the Middle East, following largely successful vaccine rollouts, the company will begin its new route to Riyadh this summer after those plans were postponed last year.
“The Middle East and many of the countries in the Middle East have made a big step forward in terms of vaccination rates,” said Elbers. “So we’re actually expanding and adding a destination like Riyadh in the Middle East, and we’re seeing the travel numbers become more sensible again than ever.”
Boeing 737 KLM airline. Airplane landing at Leonardo da Vinci International Airport in Fiumicino, Italy, on April 24, 2021.
Mondadori portfolio | Mondadori portfolio | Getty Images
The comments come a day after the UAE airline reported an annual loss of $ 5.5 billion to Emirates – the first in three decades – in an additional $ 1.1 billion bailout by the Dubai government US dollar led.
Last month Air France-KLM reported a net loss of $ 1.8 billion for the first quarter, which Elbers described as “worse than expected”.
He said he would not rule out the possibility of further government assistance should the industry experience further Covid-19 outbreaks. However, Elbers said KLM’s existing $ 4.1 billion in loans and facilities should provide the airline with a “solid foundation for the future.”
“We are seeing optimistic signs for the future and are actually trying to keep this balance by doing a lot of work on cost cutting and restructuring, but still looking a little more positively into the future,” he said.