Gov't agrees to KLM restructuring plans; State aid back on the table
The government agreed to the restructuring plan KLM submitted to reduce its costs. KLM can now once again call on the remainder of the 3.4 billion euros in state aid the government made available to help the airline survive the coronavirus crisis, NOS and NU.nl report.
Minister Wopke Hoekstra of Finance last week pulled the remaining amount of the state aid because, unlike other KLM employees, the pilots refused to sign an agreement for pay cuts. Pilots union VNV reached an agreement with KLM on Tuesday regarding wage moderation for the next five years.
With that, KLM now meets the requirement to reduce costs by at last 15 percent. The agreements on wage moderation are based on the principle that the strongest shoulders bear the heaviest burdens. Additional measures include reducing redundancies with around 5 thousand jobs disappearing, making the fleet more sustainable, and making agreements with fuel suppliers and aircraft lease companies about cost reduction.
"Now that this condition of the support package has been met, KLM can use the remainder of the direct loan and revolving credit facility," Hoekstra said in a letter to parliament. The 3.4 billion euros package consists of 2.4 billion euros in guarantees for bank loans and a direct loan of 1 billion euros. KLM already received part of the direct loan at the end of August.
Hoekstra and his colleague Minister Cora van Nieuwenhuizen of Infrastructure again stressed that KLM is getting state aid because of the airline's importance for the international network at Schiphol.