Corendon Dutch Airlines (CD, Amsterdam Schiphol) parent Corendon Tourism Group has hit out at KLM Royal Dutch Airlines (KL, Amsterdam Schiphol), accusing the Dutch flag carrier of abusing state aid as it acquires a majority stake in Haarlem-based holiday package vendor Airtrade.

KLM, which owns leisure carrier Transavia Airlines (HV, Amsterdam Schiphol), announced in a statement that it was taking “a strategic interest” in Airtrade - which it described as being “the market leader in the field of issuing and processing airline tickets for the travel industry” - intending to offer greater quantities of package holidays.

KLM has worked with Airtrade since 2015, the distribution firm providing technology that allows KLM clients to book hotels and car rentals via its website. The financial details of the deal have not been disclosed.

“We want to become a pace-setting tour operator, not just in the Dutch market but potentially elsewhere as well,” KLM Nederland director Harm Kreulen told the Netherlands’ Travmagazine.

The national airline is planning to set up its own travel organisation under the name KLM Holidays, local media reported, capitalising not only on ancillary revenue from airfares but also building revenue by combining ground services - cash that currently goes into the pockets of tour operators that use KLM to take customers on vacation with its flights.

Kreulen said in the KLM statement that “the collaboration focuses mainly on the further development of consolidation regarding KLM Package Deals and the rollout of NDC (New Distribution Capability) as a distribution platform.”

Firms belonging to the Dutch association of travel agencies and tour operators (ANVR), such as Corendon Tourism Group, are preparing a formal complaint to the European Commission, according to the Algemeen Nederlands Persbureau (ANP) news agency, as KLM has taken advantage of a EUR3.4 billion euro (USD4.1 million) state-guaranteed loan package.

KLM Holidays has ambitions to be a top-three Dutch tour operator, local media reported, and tour operators like Corendon and Sunweb have argued that this is unfair competition.

“State aid is not intended for that,” exclaimed Corendon Holding CEO Steven van der Heijden, telling the newspaper de Volkskrant that he understands why KLM wants to focus more on holidaymakers - the market most likely to recover quickly from the coronavirus crisis - but “there must be a level playing field.”

“KLM has had billions in state support to survive the coronavirus. But we want to know if it will use that money to compete with us,” van der Heijden said. The state support was designed to keep the international network at Amsterdam Schiphol airport intact, he added, but “this has nothing to do with package tours.” Corendon, by contrast, which can only make use of regular Dutch support measures for companies, is unable to pay millions it owes due to the crisis.

“They ask for government support, but at the same time, they are using that to compete more with the travel industry, which has been hit very hard. The government should never allow that,” argued Sunweb Group CEO Mattijs ten Brink.

Corendon Airlines was not immediately available for comment. However, KLM told ch-aviation: “KLM has been offering package holidays on (i.e., for the Dutch leisure market) since 2014 under the name KLM Package Deals. The technology for this and for other distribution activities of KLM is supplied by the company Airtrade and developed together with KLM. In order to safeguard the intellectual property and to develop it further, KLM has taken a majority stake in Airtrade.

“KLM has received a government loan of EUR1 billion [USD1.2 billion] and bank credits backed by government guarantees for EUR2.4 billion [USD2.9 billion]. It has been agreed with The Hague and the banks that KLM will handle acquisitions like this (with a maximum amount of EUR15 million [USD18.24 billion]) itself. It is up to KLM to make the commercial decision.

“KLM is shifting its focus from more to better, such as an even better passenger experience, sustainability, and further digitisation. Investments are necessary for this and they are justified by the savings made in other areas.”