On his last flight, about eleven days ago, Willem Schmid was locked up in a hotel room in Mumbai. To prevent the spread of the corona virus, the 42-year-old KLM pilot and chairman of the Dutch Air Traffic Flyer Association (VNV) was not allowed to enter the city of millions. Just like other crew members of foreign aircraft that visit the country. “So I had plenty of time for this,” says Schmid.
‘This’ – those were the negotiations with KLM about a restructuring of the company, which is experiencing the worst crisis in its centenary due to the same virus. KLM loses tens of millions every day because travelers stay away. The government came to the rescue at the end of June to keep the company afloat and thus also to safeguard the role of Schiphol for the Dutch economy. In exchange for a direct loan of 1 billion euros and credit guarantees of up to 2.4 billion euros, Minister Wopke Hoekstra (Finance) demanded a restructuring plan.
Expiry date
That happened last Thursday, on the day that Hoekstra had set as the deadline. After nocturnal deliberation, it was announced in the morning that there was an ‘outline’ agreement with seven unions on a social plan, wage sacrifices and redundancy schemes. Seven, because the signature of Schmid’s pilot club was missing.
The pilots were criticized for this by the minister. ‘It is just going very badly in aviation and with KLM. We just have to change the course, left or right. The good news is that a number of unions see that it is necessary. ‘ The alternative, according to Hoekstra, is for KLM to go bankrupt.
That was the strong language of a minister who decides about the future of KLM, and therefore also about your livelihood. Did that shock you at the VNV?
‘As a pilot you are trained to focus on your task. In this case, that was the reaching of an agreement whereby KLM complies with the conditions set by the government for the aid package. Then you should not let yourself be distracted. Furthermore, we fully agree with the minister: cutbacks are inevitable to save KLM. ‘
But the VNV did object to the way in which. Hoekstra not only demanded a reduction of the controllable costs at KLM by 15 percent, but also who had to make which wage offer.
“I understand you want to see your money back if you loan it to someone. And then within the term and with interest. I can also very well imagine that politicians attach other conditions to this, such as making KLM more sustainable. So yes, KLM must quickly become profitable again and thus reduce costs. But it has not been explained why that must necessarily be 15 percent. There is no substantiation.
‘What we, as VNV, have more difficulty with is that the minister prescribes how to achieve that reduction, with tiers of up to 20 percent wages that employees who earn three times the average earnings have to hand in. This is contrary to fundamental, internationally recognized labor rights. The terms of employment are a matter between employer and employees. With dictations you limit the space for negotiation. We are not alone with this criticism: trade union De Unie used the slogan ‘stay five feet from our collective labor agreement’. Other unions have announced proceedings in Brussels. ‘
Why did the VNV finally reach an agreement with KLM half a day later, and not simultaneously with the others?
‘That of those seven unions at the same time is not correct. We were not all eight at the same time. From the end of August, consultations have been held with each domain separately – with the ground staff represented by five unions, with the cabin crew by FNV Cabine and VNC and with the pilots by us. You are dealing with three collective labor agreements that are being broken open, with numerous schemes. And it is customary in such complex negotiations that it takes until the deadline before you reach an agreement. ‘
In the image it seemed as if ‘those spoiled pilots’ were stiff to give up as little as possible.
“I believe most people really know that we are professionals who are worth their money. The problem is that some are taking the aviation crisis to question the discussion of pilots’ wages. KLM was heading for a record profit this year, and has repeatedly made billions in profit in recent years. Yes, nice collective labor agreements were concluded then. But the reward has nothing to do with the crisis. Even if we were to fly for free, KLM would still make a loss. The planes must be filled, then the company will earn money. Then we don’t need government support. Unfortunately, that is not possible for the time being.
‘In general terms, we have now agreed as a union to scrape a 2.5 wage increase this and next year, to surrender profit sharing and year-end bonuses, with different working and rest times and a retrenchment of other schemes. That comes down to a total reduction of the terms of employment of more than 20 percent. ‘
In August, the VNV issued a letter calling on the KLM top to intervene for the pilots if they were criticized in the media. Did you have an answer?
‘We discussed it with KLM. Pieter Elbers (the CEO of KLM, red.) has said that workers should not be played off against each other. An airplane needs pilots. But also someone who pushes the aircraft away from the gate, people who bring luggage on board and someone who sells tickets. We can’t live without each other. ‘
KLM fears further job losses
KLM expects another 1,500 jobs to be cut next year, on top of the 4,500 and 5,000 that will disappear in the near future. CEO Pieter Elbers writes this in a column to his employees. The airline has so far expected a 20 percent drop in flights by the summer of 2021. Given the slow recovery of aviation worldwide, Elbers foresees that ‘production’ will drop by 30 percent. That would mean that KLM would have to cut another 1,500 jobs.
KLM is not alone in its gloomy forecasts. Eurocontrol, the European air traffic control network, predicts by February next year that only half the number of flights flown in 2019 will be operated. For the last months of this year, the international aviation umbrella organization Iata expects the number of flights to drop by 66 percent. The crisis among its members also affects this lobby club: Iata is cutting 400 jobs, more than 20 percent of the total.
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KLM and trade unions are it Thursday agreed on a social plan with which the company hopes to secure government support.
Comment: Hoekstra was rightly furious about the lack of signature of KLM pilots
There is no going back for the state: KLM must continue to exist. The taxpayer will notice this.
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