December 29, 2004
Air France KLM said on Wednesday it would reduce KLM ticket prices from Amsterdam to all 66 European destinations by around 40 percent from January 1 in an attempt to compete more effectively with low-cost carriers.
"It's the biggest price cut in the history of KLM... The new tariffs, which will be valid for the entire year, are similar to (big discount) action tariffs," KLM said.
KLM, which was taken over by Air France earlier this year, said quality and service will remain unchanged. Unlike budget carriers, KLM still provides some refreshments without charge.
It said it will also make pricing more transparent.
The lowest tariff, in the Take Off Fare class, to a popular destination such as Heathrow will drop to EUR69 (USD$94) from EUR109 (USD$148), before airport taxes and surcharges. The price for a return ticket to Nice will be cut to EUR99 (USD$135) from EUR167 (USD$227).
"By cutting prices, KLM expects to carry more passengers and generate substantially more revenues in European passenger transport," the airline said in a statement.
SEATS AVAILABLE
Hundreds of seats will be available at the lowest prices every day, KLM said, addressing concerns from the Dutch consumer union which said earlier this week that advertised low prices in the wider travel industry were rarely available to consumers.
The airline will introduce three other tariff classes, mainly aimed at business travellers, which provide more flexibility to change flights.
In a new departure, KLM will charge EUR10 (USD$13.60) for a reservation made online, EUR25 (USD$34) for a phone booking and EUR45 (USD$61) for a ticket booked in the KLM ticket offices.
In addition, for the lowest priced fares, travellers will have to pay another EUR5 reservation surcharge for a return ticket.
These costs will come on top of EUR25.11 (USD$34) of airport taxes at Amsterdam Schiphol plus taxes at the destination airport, as well as fuel and security surcharges of EUR26.
Passengers who still prefer a paper ticket instead of an electronic ticket will have to pay another EUR30 (USD$41).
(Reuters)
