Business English Project
Report on;

and

Contents Terms of Reference; 3 Executive Summary; 5 Introduction; 6 Methodology; 7 Findings; 8 KLM-Air France 8 Aer Lingus 9 Conclusion 10 Bibliography 11

Terms of Reference;

This report has the objective of informing the reader on the approach of two companies to the ongoing financial crisis from 2009 and on. By the means of a comparative analysis, the reader will get a summarized overview of the measures of the two companies and will be able to reflect on them.
There are two persons involved in this project;
It will be written and submitted by Julian Koster. The final assessment will be done by the lecturer, Ms. Gina Noonan. Who is also responsible for correcting the drafts as well as grading the report in the end.
The timeframe of this project is as follows; Date: | Event: | October 25, 2011 | First Draft of Executive Summary submission. | November 8, 2011 | First Draft of Methodology submission. | November 15, 2011 | First Draft of Comparative Analysis and Conclusion. | December 2, 2011 | Final Submission of Entire Project. |

The structure of the report is made up of the following points; * Cover Page * Table of Contents * Terms of Reference * Methodology * Executive Summary * Comparative Analysis
1. KLM-Air France
2. Aer Lingus * Conclusion * Bibliography

Executive Summary;

This report was written to examine the way in which two companies handled the economic crisis of the late 2000s. The companies are; KLM – Air France and Aer Lingus.
The research conducted focuses on the policies of both companies in the fields of finance, personnel, public relations and environmental concern during harsh economic times. During the research, a great range of sources were used to write a well-informed report that is accurate and consistent. The main findings can be found in the report with accompanying information included in the bibliography and appendices. At the end of the report, the information will be summarized and conclusions drawn on whether or not the airlines implemented a successful policy during the rough years of the crisis.

Introduction;

This report was written to examine the way in which two companies handled the economic crisis of the late 2000s. The companies involve KLM – Air France and Aer Lingus. By comparing the two companies in a summarized way, the reader gets a quick overview of the methods used by the two airlines without getting into too much confusing details. No obstacles were encountered during the writing and handing in the drafts in class provided me with a good opportunity to learn from the mistakes in my English and ultimately, come to a better final result.

Methodology;

With the objective of the research and the subject outlined and explained, next is to outline how the data will be collected and used in this report. In the case of this report a lot of studies as well as newsprint articles are available. The primary sources of information, therefore, are newsprint articles from newspapers and magazines focused on the economy. The data used in this report comes solely from secondary research. No primary research is done or used during the writing of it. A combination of qualitative and quantitative research is presented in the form of text, tables or graphs.

Findings;
The late-2000s financial crisis quickly spread from the United States to Europe, directly affecting Europe’s airline industry. Despite a surge in oil prices, the industry made a € 12.3 billion profit between 2004 and 2008. This dropped to € - 1.2 billion in 2009, at the height of the economic meltdown (Airneth, 2009).
KLM-Air France is the second largest airline in Europe while Aer Lingus, it’s counterpart in this report, comes in at number fifteen (Aer Lingus Website). Both airlines survived, or rather, are still trying to survive the ongoing crisis, and this report examines how. As of July 2011, KLM-Air France added the European debt crisis to its risk list, which contains factors affecting business travel and the movement of goods (Plumb et al., 2011). This is a strong indicator that the company remains affected by the crisis. According to Peter Hartman, KLM’s Chief Executive, the glass will remain half-full in the coming years, but only just (ANP, 2011). Since the start of the crisis in 2008, not a single employee has been fired. Though, KLM-Air France hopes that 7,500 employees will voluntarily leave the company in the coming years by making use of KLM-Air France’s benefit plans made available to those who choose to leave (NRC, 2009) (NRC Web Editorial, 2009). KLM continue to invest in airplanes, service and destinations, continuing to use its Equity as a source of finance (BNR Web, 2011). The days in which pilots were offloading luggage because there was no other job for them are over, for now at least, according to Hartman (ANP, 2011). Besides investing in airplanes and routes, KLM-Air France also increased its investment in customer service, offering better meals on long destination flights, flexible tickets and better flight entertainment (ANP, 2011).
Aer Lingus is Ireland’s main carrier. Booking heavy losses in the consecutive years of 2008 and 2009, 2010 proved an opportunity to gain a profit again. By abandoning the low-cost-carrier image, it’s trying to become a network carrier. Operating on more routes and hoping to attract more business customers (Flottau, 2010). Unlike KLM-Air France, Aer Lingus did not want to let-go employees within the company on such a large scale. Instead, Aer Lingus terminated some positions for a short term in order to re-hire those employees in economically-better times on lesser terms than before (Mulligan, 2011). In comparison to KLM’s Asia-focused expansion, Aer Lingus is trying to gain ground on the North Atlantic routes. This is mostly because of the recession which is still going strong in Ireland with slow recovery of the country’s economy which means the airline will have to get its revenue from connecting flights rather than opening up entirely new intercontinental routes like KLM is trying to do. Despite all the cost-cutting during the past couple of years, Aer Lingus made an effort to be ready for a future with increased traffic by opening a new terminal at Dublin Airport in 2010, costs for this new terminal were over 600 million euro with Aer Lingus being its only user (Irish Times, 2010).

Conclusion

It is clear both KLM-Air France and Aer Lingus used a nearly similar approach to deal with the financial crisis, there are differences but these are mainly concerned with company size. Both companies continued and are continuing to invest in overseas routes, aircraft, and concerning Aer Lingus, even an entire new terminal at Dublin Airport. Both airlines will probably survive the crisis and possibly come out even stronger. They must, however, continue to cut costs and expand on customer service as well as increase their number of routes overseas.

Bibliography
Airneth, 2009. Fall-out for Europe's Airlines. Research. London: Aviation Economics Aviation Economics Airneth.
ANP, 2011. KLM Prepares For Crisis. [Online] Available at: http://www.nu.nl/economie/2657136/klm-maakt-zich-crisis.html [Accessed 29 November 2011].
BNR Web, 2011. KLM Afraid of the Crisis. [Online] Available at: http://www.bnr.nl/topic/beurs/661457-1111/klm-bang-voor-crisis [Accessed 29 November 2011].
Flottau, J., 2010. Aer Lingus Back in the Game. [Online] Available at: http://www.aviationweek.com/aw/generic/story_generic.jsp?channel=comm&id=news/awst/2010/09/13/AW_09_13_2010_p42-251785.xml&headline=Aer%20Lingus%20Back%20in%20the%20Game [Accessed 29 November 2011].
Irish Times, 2010. Aer Lingus to test transition as terminal opens today. [Online] Available at: http://www.irishtimes.com/newspaper/ireland/2010/1119/1224283711318.html [Accessed 1 December 2011].
Mulligan, J., 2011. Aer Lingus stays silent on reports of tax demands over layoff scheme. [Online] Available at: http://www.independent.ie/business/irish/aer-lingus-stays-silent-on-reports-of-tax-demands-over-layoff-scheme-2492675.html [Accessed 30 November 2011].
NRC Web Editorial, 2009. Air France-KLM Terminates another 3000 positions due to the crisis. [Online] Available at: http://vorige.nrc.nl/article2247581.ece [Accessed 30 November 2011].
NRC, 2009. Air France-KLM terminates 4,500 positions. [Online] Available at: http://vorige.nrc.nl/economie/article2417588.ece/Air_France-KLM_schrapt_4.500_banen [Accessed 30 November 2011].
Plumb, C., Hepher, T., Jacobs, K. & Regan, J., 2011. Air France-KLM adds euro zone crisis to risk list. [Online] Available at: http://www.reuters.com/article/2011/07/28/uk-airfrance-klm-idUSLNE76R02C20110728 [Accessed 29 November 2011].