The Air France-KLM merger1. Introduction 32. Cause of the problems faced by Air France-KLM after 2009 43. The organizational structure of Air France-KLM 54. Discussion of the "Transform 2015" program 65. Conclusion 71. IntroductionIn 2004 the airlines Air France and KLM became merged into a new entity called Air France-KLM. Both companies' CEOs saw the need to merge due to the European aviation industry's need for consolidation. It was a unique merger in the sense that it was a cross-border merger between companies of different nationalities and cultures. Both companies agreed to maintain their own brands and remained mostly autonomous. Both CEOs, Leo van Wijk (KLM) and Jean-Cyril Spinetta (Air France), treated each other as equals. They tried to appear like a team on the outside and in this they succeeded. In the first years the results of the merged companies were excellent. It really seemed like the two companies had the much-needed synergy to create the 1+1+3 effect. However, the 2008 global economic crisis hit the aviation sector hard. Operating profit was negative and companies' debt rose to 6.5 billion euros. Air France-KLM is also facing problems with strong competition from low-cost airlines such as EasyJet and Ryanair. It appeared that Air France-KLM was performing worse than other companies in the aviation industry. A change within the company was needed to resolve these financial problems. Therefore, the Transform 2015 program was announced in January 2012. This article will examine the causes of Air France-KLM's problems and discuss both the organizational structure and the Transform 2015 program.2. Cause of the problems faced by Air France-KLM after 2009As stated in the introduction Air France-KLM (AF-KLM) has been struggling with financial problems since 2009. The economic crisis of 2008 played a role in this, however it seems that AF -KLM is performing worse than other companies in the aviation industry. Therefore, it is necessary to examine other possible factors that contributed to this poor financial performance. Below in Figure 1 the financial performance related to operating profit and net profit is shown. Figure 1 shows that in the early years of the merger, financial performance was good. Operating profits continued to increase each year while net profit slowly decreased from 2006 to 2008. By 2007 AF-KLM had become the best performing company in the aviation industry in terms of profitability. They had over 900 planes and flew to 240 different destinations in 105 countries.