1,100 KLM jobs at stake after record €800 million loss: Report
Dutch airline KLM announced the worst half-year results in the company's history, posting a loss of 768 million euros in the first two quarters of 2020. The operating income swung from a 223 million euro profit in the first half of 2019, to a loss of 768 million euros in the same period this year, a difference of nearly a billion euros.
The airline was likely to cut 1,100 more staffers in addition to the voluntary departure scheme KLM made available to its employees, and those starting retirement early next year, broadcaster NOS reported citing sources. At the end of 2019, the KLM Group had 36,500 workers, including 33 thousand at the airline. Layoffs could hit many layers of the company, including office staff, cabin crew, ground crew and pilots. More details were expected to be announced on Friday.
"These financial results serve to highlight the huge impact of this unprecedented crisis for the airline industry and KLM in particular. A loss of €800 million for the first six months of the year is the worst financial setback ever experienced in KLM’s history," said the airlines President and CEO, Pieter Elbers.
The situation was even worse at the Air France - KLM Group, the Dutch airline's parent company. Where the group took a two-quarter profit of 137 million euros last year, that figure plunged to a loss of nearly 2.37 billion euros this year. The group's debt level already rose by 1.83 billion to 7.97 billion.
KLM said its first quarter was very rocky even though it had performed reasonably well in January and February before the outbreak of the SARS-CoV-2 novel coronavirus, and increasing numbers of people falling severely ill from Covid-19 as a result. Nevertheless, the airline said its revenue in the first six months of the year was approximately 2.8 billion euros, half of what it was during the same period last year. As the crisis developed the airline was given a bailout package of government-backed loans and credit lines worth about 3.4 billion euros.
Passenger figures also plunged from over nine million to fewer than 500 thousand, a drop of about 95 percent. "Cargo business is performing well, but passenger operations have yet to display any form of structural recovery despite the fact that KLM gradually and carefully expands its network," the airline said in a statement.
"In the months ahead, KLM will continue to expand its European and intercontinental network. This is an important step towards recovery, albeit both limited and cautious. The road to recovery will be long and fraught with uncertainty. Even though we have already done a lot, further far-reaching measures will unfortunately be unavoidable," Elbers said.
