KLM submits restructuring plan to Ministry of Finance

KLM Royal Dutch Airlines submitted its restructuring prepare to the Netherlands Ministry of Finance. The presentation of this restructuring prepare was a key affliction in acquiring a authorities bank loan and guarantees to the benefit of EUR 3.4 billion. The prepare outlines how KLM intends to conquer the worst crisis in almost one hundred and one yrs in operation, describing how KLM intends to fulfil the problems imposed by the Netherlands authorities. The prepare is presently beneath critique at the ministry.

The presentation of the prepare is a incredibly significant milestone. Substantively, the prepare consists of components this kind of as the reassessment of strategy, charge-slicing initiatives, monetary factors and how KLM staff will contribute by way of lowered employment problems.

The essential principle of the restructuring prepare is that KLM’s existing business product is even now legitimate and beneficial, but that significantly-reaching, structural initiatives are essential to ensure KLM’s long term achievements. Owing to the consequences of the corona pandemic, KLM is preparing for an extended time period all through which less flights will be operated. The organisation will become smaller and fewer high priced, as effectively as extra sustainable, cost-effective and effective.

As KLM plays this kind of an significant financial and societal position in the Netherlands, the authorities has presented the airline a bank loan package, to which it has attached certain problems. 1 affliction is that KLM staff should contribute to KLM’s restructuring by accepting lowered employment problems, amounting to money-dependent, graduated cutbacks of up to twenty%. These lowered problems will apply for the length of the bank loan time period.

KLM has now attained settlement with all unions for floor, cockpit and cabin staff on key ideas of this prepare for the time period by 2022. This consists of the unions VNC and FNV Cabine in the cabin area and the unions FNV Luchtvaart, CNV, De Unie, VKP and NVLT in the floor area, as effectively as the Dutch Airline Pilots Affiliation VNV in the cockpit area.

1 of the other problems imposed by the authorities is a fifteen% reduction in controllable prices. The KLM Is effective Council has been requested to recommend on the downsizing and even further simplification of the KLM organisation. In addition, there are extra than 70 initiatives that will predominantly decrease exterior prices. Major charge discounts will be reached by phasing out leased aircraft and deploying a extra effective fleet. KLM is also meeting with suppliers and chain partners to contribute to charge reduction.

In phrases of labour prices, KLM has already reached discounts by shedding positions. KLM has already downsized by way of numerous actions, such as non-renewal of small-expression contracts (1,500 positions) and a voluntary resignation plan (2,000 positions). By the conclusion of the calendar year, KLM will make use of close to 4,500 less folks than it did ahead of the corona pandemic.

Regrettably, even further cutbacks are unable to be excluded in see of the magnitude and gravity of the crisis. KLM has also attained settlement on a social prepare with trade unions for floor personnel and cabin crew. The existing collective labour settlement for cockpit crew already supplies a social prepare.

Additionally, KLM will reopen a voluntary resignation plan focusing on precise divisions and departments in order to minimise involuntary dismissals.

The KLM Is effective Council has reviewed and evaluated 37 requests for tips. The restructuring prepare is bold and force ran substantial foremost up to 1 Oct. The constructive contribution of divisional staff associates and the Is effective Council deserves substantial praise. The Is effective Council’s positive tips on restructuring programs was issue to the prosperous negotiation of a social prepare.

“Right now we took a big, exceedingly significant action towards restructuring KLM. The prepare we submitted to the Ministry of Finance right now is a affliction for acquiring a monetary package, producing this an significant milestone in KLM’s recovery. The purpose is to ensure that KLM survives this crisis and emerges more robust than ahead of. The actions are significantly-reaching and painful for KLM staff, but they are required. I am grateful for the assist of the Netherlands authorities and happy of the initiatives of all included – KLM staff, our Is effective Council and trade unions – who labored alongside one another to obtain this final result. KLM President-directeur & CEO Pieter Elbers

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