On Thursday evening, KLM signed an agreement with the VNV pilots’ union on employment conditions for pilots. This was necessary for the reorganization plan that the airline had to submit to the Ministry of Finance on Thursday in order to receive state aid.
The plan that has been sent to the ministry sets out how KLM wants to face the corona crisis and how the company is implementing the conditions set by the cabinet to obtain the loans and guarantees worth 3.4 billion euros. The plan is now under assessment at the ministry.
The agreement with the pilots was the only agreement KLM had yet to conclude. The company previously reached agreements with the seven unions of ground crew and cabin crew.
It is not surprising that the agreements with pilots took the longest to come. They must make the largest wage sacrifices from the cabinet, together with managers.
Handing in salary and cutting costs
KLM has opted to let the strongest shoulders bear the heaviest burdens: the big earners have to give up a maximum of 20 percent salary. Lower salaries are less wages and those who earn less than one and a half times the average are spared as much as possible.
The government also demands a 15 percent reduction in the controllable costs. To this end, the organization will be reduced: “By the end of the year, KLM will employ about 4,500 fewer colleagues than before COVID-19”, thus the company in a statement.
This is partly done through fifteen hundred temporary contracts that have not been renewed and thanks to some two thousand participants in the voluntary severance scheme. This scheme will be reopened in a number of departments, in the hope that the number of forced redundancies will remain limited.
KLM is also making other plans for cost savings
Incidentally, it cannot be ruled out that more people will have to leave than is currently calculated. “Unfortunately, further reductions cannot be ruled out given the scale and depth of the crisis.”
There are also more than seventy other plans that primarily have to keep external costs under control, KLM says. to contribute, “said the airline.
“The measures are drastic and painful for all KLM employees, but necessary”, CEO Pieter Elbers said in a statement.
Hoekstra: ‘First step on the way to recovery’
Minister of Finance Wopke Hoekstra is pleased that all unions are now on board: “It is good and in the interest of KLM and its employees that there is an agreement. The financial problems at the company are great. It is good that this is widely recognized. . “
“This is the first step towards recovery,” he continues. “A lot has to be done, not only to survive this crisis but also for a financially healthy future.”
Incidentally, the unions’ agreement does not yet give a definitive green light for KLM state aid. Hoekstra: “We will assess the restructuring plan in the coming period and will inform the House of Representatives about the outcome.”
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