Up to 5.000 redundancies planned at Dutch airline KLM
The Dutch airline KLM is planning to make between 4.500 and 5.000 people redundant in the coming years, as a result of the coronavirus pandemic.
Redundancies at KLM
The airline made the announcement on the morning of Friday, July 31. Up to 5.000 people working in the Netherlands will lose their jobs. In a statement, KLM revealed that the redundancies will be issued as follows:
- Up to 1.500 employee contracts will not be renewed
- Up to 2.000 jobs will be removed via a voluntary departure scheme
- Up to 500 employees will be lost through natural turnover (i.e. retirement)
- Up to 1.500 employees risk being dismissed
Of the 1.500 employees under the threat of dismissal, 500 work in the KLM ground team, 300 in plane cabins, 300 in cockpits, and 400 at KLM subsidiaries and Air France-KLM positions. The airline expects between 500 and 1.000 new employees will replace the employees who take advantage of the voluntary departure scheme.
Conditions of Dutch government aid package
KLM CEO Pieter Elbers said in a statement: "A lot has been done in recent months to adapt the size of the company to the new reality. Unfortunately, that is not enough and more needs to be done as soon as possible to secure the future of KLM," stating that the redundancies were required to keep the company afloat. KLM has stated these steps are being taken due to the conditions imposed on the airline through the government’s support package of 3,4 billion euros.
On June 26, the Dutch government announced an aid package of 3,4 billion euros for the Dutch airline that required KLM to meet certain conditions, including reducing costs by 15 percent, cutting the number of night flights out of Schiphol airport, and making an active contribution to sustainability. The Ministry of Finance is yet to issue a statement regarding the planned redundancies, but a spokesperson said the airline had until October 1 to submit a plan for cutting company costs. If the ministry finds the plan as a whole acceptable, and feels all conditions have been met, then the airline can submit a request to a bank for a loan.
Financial losses at KLM
The airline has announced that Air France-KLM suffered even greater losses in the second quarter of 2020 than in the first three months of the year. Sales plummeted by more than 75 percent, and the operational losses amounted to around 493 million euros. The company’s net loss amounts to a total of 2,6 billion euros.
KLM transported only 5 percent of the number of passengers that they transported in the same period in 2019, and Air France only 4,8 percent. Air France-KLM expects to have to fork out 1,6 billion euros to reimburse customers for flights cancelled because of the pandemic.