Friday, September 24

Aeronautics: Dutch government puts KLM under pressure

The tension is maximum at KLM, where the pilots’ union rejected, Saturday, October 31, a request from the Dutch government to barter an aid plan of 3.4 billion euros in the form of loans and guarantees against a freeze wages for five years. Faced with this refusal, the Minister of Finance, Wopke Hoekstra, decided to suspend the payment of the balance of the planned public aid, ie around 2.5 billion.

The specter of bankruptcy is now clearly raised, even if the CEO of the company, Pieter Elbers, has denied this possibility, at least for the short term. KLM’s financial reserves “Cannot last more than a few months”, however, he warned.

Read also Coronavirus: KLM airline to cut up to 2,000 jobs

It is very disappointing, but, under these conditions, we cannot continue ”Mr Hoekstra said on Saturday night. He demanded that all employees accept, before 1er November, the freeze of their remuneration. Five trade unions have agreed, two are still in concert, but that of pilots (VNV) considers it unacceptable that after having admitted a freeze until March 2022, the staff is now forced to accept an additional appointment for three years.

Towards additional layoffs?

Wopke Hoekstra explains that the second pandemic wave pushes to revise the forecasts. The group formed with Air France suffered a loss of 1.6 billion euros in the third quarter of 2020. Its turnover fell by 67% in one year, and the number of passengers carried, by 71%.

The pilots’ union suggests a 2.5-year commitment, with a possible extension clause

By the end of the year, KLM should have lost 5,000 of its nearly 32,000 employees. The unions fear that the deteriorating health situation will lead to further layoffs. Moreover, management has already suggested that others “Organizational adaptations” might be necessary, with the fourth quarter promising to lead to a further decline in sales. Hence the importance “Crucial” state aid, say company executives.

After the shock generated by the words of the Minister of Finance, the pilots’ union sent a letter to Mr. Hoekstra on Sunday. According to the daily From Telegraaf, it suggests a 2.5-year commitment, with a possible extension clause. A spokesperson for the finance minister referred the problem to the management of the company, indicating that it was with them that the government had negotiated an agreement.

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