KLM and Climate Change
Aviation Management Conference
December 12th 2007
Diederik Scheepstra, Manager Environmental Strategy
KLM Airport & Environmental Strategy
2
Introduction to KLM
Climate Change
Corporate Social Responsibility
Impression of Activities (Film)
Agenda
3
KLM in shortPioneer in the airline industry - Founded in 1919, Joint Venture with Northwest
Airlines in 1989, merger with Air France in 2004
Core business – Transportation of 22 million passengers and 620.000 tonnes of
freight and KLM Engineering & Maintenance is the largest technical maintenance
company in the Netherlands
Sustainable and committed – Profitable growth, considerate to people (more
than 30.000 employees: diversity, mobility, health & safety) and caring for the environment
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Growing market Real prices in deregulated markets
60
65
70
75
80
85
90
95
100
105
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Inde
xed
to 1
00
US domestic airline market
Intra-European airline market
UK telecoms market
Decreasing prices
AEA Total Scheduled Passenger Traffic (in million RPK)2006
Average growth in 1988-2005 : 7.0 % in RPK’s
2011
2007
Source:1988-2005 AEA, incl.domestic, excl. charters and LCLF;
Average growth6.5% per year in
Passenger numbersin the period of
2007 - 2011
Sensitive to worldwide economic trends, issues and competition
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June 1989
May 2004
1993
?
?
?1992
1999
2000
Coöperation: alliances, joint-vertures and mergers
KLM
Source : OAG (jun’07)
The KLM Product: a worldwide network
128 destinations
Summer 2007
236 destinations
KLM + Air France
Source : OAG (jun’07)
Summer 2007
731 destinations
SkyTeam
Source : OAG (jun’07)
Summer 2007
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The Importance of the Transfer Passenger
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The Air France - KLM Strategy
1. Profitable growth through ‘dual hub’ system
2. Improve competitive position: developing SkyTeam
3. Ensure sufficient infrastructure
4. Remove national boundaries
With respect for the environment
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Introduction to KLM
Climate Change
Corporate Social Responsibility
Impression of Activities (Film)
Agenda
12
A Licence to Grow
License to growValue creation
KLMPolicy makers
Local community
NGO’sCustomers
Employees
Investors
Alternative CSR motives:• Sustainability• Reputation• Moral obligation
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People, Planet and Profit
CSR as separate staff function, disconnected from business
CSR integrated in all businesses, centrally supported and led by
management
CSR business integration
AND…..
KLM ambition
Focus initiatives are developed with only a single focus (either Planet, Profit or People)
Integrated approach, combining Planet, People and profit as much as possible
focus focus
focus
Profit
Planet People
Profit
Planet People
Textfocus
CSR focus integration
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• 2006 CSR Statement: Leading European Airline• 2005/6 No.1 in Sustainability Indices• 2007-11Strategic priority: pro-active CSR policy • Initiatives are joint, aligned or coordinated
• Local action plan
• 1996: first environmental report• 1999: ISO 14001 for entire operations• 1995-present: noise program• 2002: Environmental best practices outstations• 2004: fuel program
• 1986: purchase 200 LPG vehicles• 1996: first environmental report• 2001: ISO14001 for AF industries Orly• 2003: ISO 14001 Le Bourget AFI• 2004: sustainability charter suppliers
• Local action planaligned
A joint AF-KL CSR Statement, Local Action Plans
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July 06 AF-KL: new CSR statement
“AFKL wants to set the CSR standards in
the airline industry.”
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Introduction to KLM
Climate Change
Corporate Social Responsibility
Impression of Activities (Film)
Agenda
17
Worldwide CO2 Emissions (IPCC)
Human Related Emissions
3%
Natural Emissions
97%Airline Industry
Emissions2%
Other Sources 98%
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Breakdown of Airline CO2 Emissions (AF-KL)
1%
2%14%
79%
4%
99%
Ground Process Flight Process Taxiing
Climb Cruise Approach
5%
14%
81%
Domestic Medium Haul Long Haul
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Air France-KLM Action Plan 1. Actions to REDUCE CO2 -emissions
a. Innovative operational measures, ground improving CO2 footprint
b. Fleet renewal program enhancing CO2 -efficiency
c. Involvement in breakthrough technology and innovation
d. Promoting Single European Sky (-6% to -10% emission)
e. KLM leading the way in Schiphol community (working group)
f. Mobilizing our staff to contribute their part
2. Measures to CONTROL CO2 -emissions
g. Promote an effective Emission Trading Scheme
h. Explore “New Energy Sources” link-ups
3. OFF-SETTING CO2 -emissions
i. CO2 offset program for customers
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Fleet Renewal Program
2003-2007(4500 nmi, fuel / ATK)
2007-2008(1000 nmi, fuel / seat)
2003(3500 nmi, fuel / ATK)
B747-400 ERFB747-300 Cargo -20% fuel
B737-300 (7x) B737-800 winglet (7x)-25% fuel
B737-8/900 (22x) B737-8/900 winglet (22x)-2½ % fuel
B747-300
B767-300ER A330-200
B777-200ER
-15% fuel
- 25% fuel
Long Haul:
Medium Haul:
Cargo:
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Fleet Development
Blended Winglets
• Boeing 737 Next Generation
• Improves CO2 emissions with 3%
• Reduction of noise impact
• March 2008
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Technological Breakthroughs
Engine Water Wash
• Better and more environmentally friendly technology to clean engines
• Significantly reduces engine’s CO2 emissions
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“KLM commits to CO2 neutral growth from 2007 – 2012”
Largest CO2 commitment in airline
industry
Compensation of all CO2 emission
growth
Reducing emission per pax with 3%
in 2012 and 17% in 2020
This is a voluntary commitment…
…in preparation of the introduction of ETS for aviation in 2012
CO2 emission
2008 2009 20102007
3% absolute increase/year
WWF Partnership
CO2 REDUCTION
CO2 OFFSET
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Where are we now?
Reduced CO2 emissions• Fuel efficiency : 12% improvement in 6 years• 25% more efficient than AEA average
WWF Partnership• Support nature conservation projects• Commitment to environmental goals
Offset Program• Gold Standard Projects
Dow Jones Sustainability Index: AF-KL is airline industry leading company (3rd year in a row)
3.9 litres/100km per passenger
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Introduction to KLM
Climate Change
Corporate Social Responsibility
Impression of Activities (Film)
Agenda
Please visit www.klm.com/mvo for more information on this subject