On Wednesday, the House of Representatives will debate the emergency package for KLM. The airline can count on billions of 2 to 4 billion euros from the government to get through the corona crisis. The French partner Air France also received billions from the state. What is currently going on at the French-Dutch group Air France-KLM?
How important is KLM for the Dutch economy?
KLM and Schiphol are an “essential link” for the Dutch infrastructure, Minister Cora van Nieuwenhuizen (Aviation) said on April 24 when she announced the emergency package of 2 to 4 billion euros.
The airline is like a domino, Minister Wopke Hoekstra (Finance) added. “If KLM falls over, it will not only have consequences for the company and the staff, but for all the stones that will come afterwards,” the minister warned.
The cabinet has never put its love for aviation under the seats or the benches. Van Nieuwenhuizen even spoke about “our blue pride”.
The figures initially support the economic importance for the Netherlands. Schiphol and KLM account for some 114,000 (indirect) jobs and together have an added value of more than 10 billion euros, Van Nieuwenhuizen stated. From the airport you can fly directly to more than three hundred destinations around the world.
But in The Hague, not everyone is fond of an ever-expanding aviation sector anymore. Critical voices are heard in coalition and opposition circles. Schiphol may grow, but it must be offset by environmental and noise gains.
Comments are also made on the economic interest. There is no evidence that the Dutch economy will be damaged if Schiphol does not continue to grow, concluded CE Delft after research commissioned by the Nature and Environment Foundation. According to the same study, aviation generates just under 6 billion euros for the Netherlands, a lot less than the 10 billion euros used by the government.
Do the Dutch and French still travel together?
Air France-KLM was born out of necessity. Both airlines needed a partner to survive. There have been many bumps in recent years.
A small selection from the series of inconveniences: cost control on the French side, transferring surplus cash from KLM to the parent group, trying in vain to discharge KLM CEO Pieter Elbers. In general, there are regular concerns about KLM’s independence within the airline group.
The announcement of government support did not exactly contribute to a picture of joint action. Hoekstra and Van Nieuwenhuizen talked about “possible support measures”. Earlier that day, their French counterparts presented on their own a detailed emergency package of 7 billion euros for Air France and Air France-KLM.
Was the Dutch cabinet raided and had a press conference to be called headlong? That was not the case, Hoekstra swore. According to him, a physical joint meeting was not possible at all because of the lockdowns in both countries. The cabinet is “working together with the French state as much as possible”, according to the official reading to the House of Representatives.
The French package was also not more specific, according to Hoekstra. “We are less specific about the loans, but more concrete about the conditions.”
What conditions does the cabinet want for the billions?
Speaking of those conditions. In The Hague, this was already pre-sorted, even before the message of emergency support was officially known. Many parties found no support without conditions. There were already rumors that an emergency package was in the making.
The cabinet sets requirements for profit appropriation, working conditions, nuisance reduction, sustainability and the quality of the destinations. In concrete terms, this means: no bonuses and no dividend payments as long as the state aid has not been repaid.
The cabinet will also demand “sacrifices” from KLM staff, with the broadest shoulders – read: pilots and management – having to bear the heaviest burdens.
However, the question remains how hard these conditions are. Because if the KLM management does not agree with this, will there not be billions in support? That is only a “theoretical situation”, Hoekstra said. Certainly also in view of “the good conversations” he had in private with KLM boss Elbers.
In this way, the cabinet has outlined the contours of the state aid. It is up to MPs on Wednesday to determine how satisfied they are with the lack of detail.
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