KLM Cuts Fares From Amsterdam

AMSTELVEEN, July 8, 2002 - KLM Royal Dutch Airlines will introduce a new fare structure for all 66 of its European destinations as of July 15, 2002. The new structure, which only applies for flights out of the Netherlands, will substantially decrease the range of fares per destination and goes hand in hand with more simple and transparent fare conditions. In addition, KLM will structurally reduce Economy Class fares to 13 European destinations by up to 40 percent. The airline will do the same for five other destinations as of September 1, and two more as of November 1, 2002. KLM has also further enhanced service to passengers with a variety of product improvements. All of these adjustments are intended to increase KLMå‘s share in the fast growing European leisure market.

Effective July 15, 2002, KLM Royal Dutch Airlines will reduce the range of fares per destination from 25 to a maximum of 8. The conditions applying to all European leisure fares have also been simplified and now apply across the board. KLM will have a maximum of three different leisure fares per destination. The cheapest fare must be booked furthest in advance (at least 14 days before departure), the next cheapest fare must be booked at least seven days before departure, and the third fare will apply for flights booked within three days of departure. All of these leisure fares require a minimum stay of either three days or the night from Saturday to Sunday. Because various fare combinations are possible, KLM will increase the availability of existing discount fares to European destinations, offering attractive prices. A round-trip to Milan that currently costs EUR 300 will, for instance, cost only EUR 240 in the new structure, a 20 percent reduction.

Response to growing leisure market: KLM has decided to alter its fare structure in response to recent European market developments, which show a sharp increase in leisure traffic. At the same time, KLM has raised European capacity by around 13 percent compared to fiscal 2001/2002, by deploying larger aircraft and increasing flight frequency to leisure destinations such as Lisbon, Athens, Barcelona and Madrid. Earlier this year, KLM already made adjustments for the growing leisure market by replacing a number of Business Class seats with Economy Class seats aboard its Boeing 737 fleet.




Fares structurally lower from July 15, 2002: The new fares to 20 European destinations from the Netherlands will cut up to 40 percent off current prices. More than 50,000 of these attractively priced Economy Class tickets will be available every month as of July 15.

Product improvements: KLM also introduced various product improvements. Passengers will now have access to Dutch, English and financial papers on all European flights to and from Amsterdam. In addition, on flights from Amsterdam to German, French, Italian and Spanish-speaking destinations, newspapers in these languages will be available. KLM will also supply local newspapers on all flights to Amsterdam.

KLM has also introduced a new Service Recovery Package. The contents of the package, which will vary depending on the extent of the delay, include a letter of apology, a telephone card, a meal coupon, Flying Dutchman points or discount coupons for tax-free items, a discount coupon for a future KLM flight, and a questionnaire. With these product improvements, KLM takes another step forward in improving passenger service.