Rising fuel costs forcing Transavia to implement more budget cuts; Layoffs likely
Transavia is implementing €10 million in budget cuts due to the skyrocketing price of aviation fuel, the airline confirmed to ANP after reports in the Telegraaf. Transavia said layoffs are possible. Its new CEO, Paul Terstegge, told the Telegraaf that jobs will be cut among the support staff at headquarters.
The KLM subsidiary suffered an operating loss of €49 million last year and is working on a “financially healthy and future-proof organization.” Terstegge, who took office just before the United States and Israel started the war in the Middle East, is trying to increase the low-cost airline’s margin from 1 to 8 percent.
“This is necessary to pay for our multi-billion euro investments in new Arbus aircraft, which are needed in connection with lower emissions, noise reduction, and also lower costs. There is a lot to do, because the biggest concerns lie in fuel prices,” Terstegge told the Telegraaf.
A Transavia spokesperson confirmed to ANP that the airline was working on budget cuts to absorb fuel price increases as much as possible, because it wants to pass the higher costs on to customers as little as possible. “We are taking an extra critical look at our operational efficiency and or indirect and overhead costs, where an additional cut of €10 million is required,” the spokesperson said.
“We are trying to absorb any potential personnel effects as much as possible through natural attrition. At the same time, we cannot currently rule out that reorganizations may be necessary in some areas, but we are not there yet,” the spokeswoman said. “Should that be the case, we will handle it carefully and in consultation with the parties involved.”
The war in Iran and accompanying closure of the Strait of Hormuz have sent fuel prices skyrocketing in recent months, including the kerosene prices. In mid-March, Transavia announced it would charge a surcharge of €5 on several flights for this season to absorb part of the rising fuel costs. The company also canceled about 2 percent of its flights over the busy May and June holiday season.
Earlier this week, Transavia announced the hiring of Meeke Moser as the airline’s new head of personnel & organization. Moser previously worked at Martinair as the head of human resources, overseeing a period of significant downsizing following its acquisition by the Air France-KLM Group, and the decision to drop passenger service in favor of cargo transport.
The layoffs at Martinair led to years of lawsuits alleging the airline and conglomerate did not follow proper rules and agreements with regard to the downsizing. Court decisions forced KLM to rehire dozens of Martinair pilots and offer extensive amounts of back pay, while KLM also had to loan tens of millions of euros to Martinair to cover severance pay for other laid-off workers.
