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Only coalition positive about support for KLM

3.4 billion euros. KLM receives so much support from the Dutch cabinet to survive the corona crisis. This concerns 1 billion euros as a direct loan and 2.4 billion euros in guarantees on loans from three Dutch and eight foreign banks. The state guarantees a maximum of 90 percent of these bank loans. KLM pays an average of 6.75 percent interest for the government.

The cabinet does set conditions: KLM must reduce costs by 15 percent, operate more sustainably and reduce the burden on local residents. For example, the number of night flights should drop from 32,000 to 25,000 per year. Five questions about the aid and the conditions.

Also read: Are the ministers now in the cockpit at KLM?

1 What does the House of Representatives think of the package?

KLM’s rescue will not take place without permission from the House of Representatives. A debate is expected to take place next week. The House can reject the package or enforce adjustments.

Until now, MPs of the coalition have reacted mostly positive, but with critical comments. VVD member Roald van der Linde tweets that the rescue “offers thousands of aviation workers a perspective”. Eppo Bruins (ChristenUnie) calls the package on the phone a ‘fair deal’, partly because KLM is not allowed to pay dividends and bonuses. He does, however, criticize the ‘tying’ around the drop in night flights, which is linked to the opening of Lelystad airport.

Opposition member Suzanne Kröger of GroenLinks speaks of “dirty politics” around the night flights. Residents around Schiphol and Lelystad are “played off against each other”. The PvdA has “many questions”, tweets Henk Nijboer. “How much employment is structurally maintained with these agreements?”

2 Can the European Commission still be a nuisance?

The aid package is still subject to approval by the European Commission, which monitors illegal state aid within the European Union that can distort competition. The Dutch government has already had contact with Brussels to determine whether the support for KLM can pass. For example, in order to comply with state aid rules, the package states that KLM is required to repay credit guaranteed by the state as soon as its cash position permits. But formal Commission approval is yet to come – and it is not guaranteed.

The European Commission previously made demands on Lufthansa. The German competitor of KLM would have to give up landing rights at the airports of Frankfurt and Munich, as a condition for German state aid of 9 billion euros. Lufthansa’s supervisory board disagreed, after which the government in Berlin had to renegotiate with Brussels. After Brussels eased the requirements slightly, this week both the Supervisory Board and the Commission agreed to support Lufthansa.

3 Will the conditions lead to a lower CO2emissions?

That is very much the question. KLM will have climate conditions imposed by the cabinet, but they will not go further than last year’s Sustainable Aviation Agreement. It states that the CO2emissions per passenger by 2030 should be reduced by 50 percent from 2005 levels. By 2030, 14 percent of the kerosene used by KLM should also be sustainable. Minister Van Nieuwenhuizen. There comes a state agent, a confidential advisor who supervises the implementation of the agreements by KLM on behalf of the state. But whether he or she will emphasize the climate remains to be seen.

What is not included in the conditions for KLM: the cancellation of short flights – a requirement that Air France was imposed by the French state. In the French case, this concerns a ban on domestic flights for which there is an alternative by train with a travel time of less than 2.5 hours. In the letter from the cabinet, KLM’s removal of flights to nearby destinations such as Brussels and Düsseldorf is mentioned as an option, but not as a requirement.

The cabinet also does not require a minimum ticket price from KLM. Austrian Airlines is no longer allowed by the Austrian government, which contributes to the rescue of that airline, to offer tickets at a price lower than ticket taxes (on average 40 euros).

4 How do these interventions arrive at KLM staff?

Much of that 15 percent cost reduction must be delivered by staff, through tighter working conditions and lower wages. It is still unclear whether layoffs will also be made. The plan must have been worked out by KLM and the unions on 1 October.

Pilot union VNV understands the restructuring. What is less understood is that the cabinet and KLM have already made specific agreements about the level and distribution of the cutbacks. For example, it has been agreed that employees must hand in from modal, rising to minus 20 percent for three times modal. “With this strict framework, the outcome of a collective bargaining agreement actually becomes [..] dictated. ”

The Dutch Cabin Crew Association therefore expects a “hot summer”. Board member Chris van Elswijk: “Of course we will discuss temporary agreements, but we will not just say yes. KLM cannot simply unilaterally change the collective labor agreements. ” He thinks it is a pity that KLM, which had an excellent return before the crisis, is presented with such harsh conditions. “And if it goes well after that, will we get something back? I don’t think so. ”

Union FNV, which mainly represents ground staff, believes that the limit for the wage sacrifice should be raised, to one and a half modal. The union is also disappointed that the cabinet has not said anything about the number of flex workers at KLM who work short shifts and should always be available. “The government should have set conditions for that.”

5 Are ticket prices going up now?

KLM and the Cabinet have not made agreements about ticket prices, as has been done with the state support for Austrian Airlines. The Austrian government stipulated that tickets should cost at least 40 euros.

Apart from the support package, it is likely that flying will become more expensive in the long term due to the impact of the corona virus. Despite the support measures, there is a good chance that airlines will collapse, so that customers have less choice in flights. The enormous competition has led to cheap tickets in recent years.

Analysis support KLM page E6-7

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