Dutch carrier KLM was due to receive a much-needed bailout package of €3.4 billion from the government to counteract recent losses incurred as a consequence of the COVID-19 pandemic.
KLM posted a €234 million for the third quarter of 2020. On October 1, the restructuring of the carrier presented to the Dutch government covered pay cuts up until 2022 which all unions had agreed to. However, the terms of the €1 billion loan and €2.4 billion euros in guarantees for bank loans included a demand that KLM reduce costs by 15% and improve sustainability and it was also dependent on all unions agreeing to pay cuts over a five-year period. Five unions have agreed to sign a ‘commitment clause’ indicating that their members will agree to five years of pay cuts, and while the union representing ground staff and cabin crew are considering the situation, the pilots’ union has refused to sign.
Pilots had already agreed to a 20% pay cut, though their union indicated that they were committed to “continue taking responsibility to get KLM through the crisis and make it a healthy company again.” In a letter to Parliament, Finance Minister Wopke Hoekstra said: “It is up to KLM and the unions to ensure that the conditions set are still met.” (€1.00 = US$1.16 at time of publication.)Email Post to a Friend