KLM is preparing to make cuts to its staffing, with up to 5000 staff facing the prospect of losing their jobs.
A brace of KLM Boeing 737s at their home base of Amsterdam Schiphol – Image, Economy Class and Beyond
COVID-19 has not been kind to the airline, with the airline operating 10% of its original number of flights by the start of April, growing to 15% in the second quarter. In July, 30% of flights were operating – however, the load factors do not appear to be great.
As a result, while the KLM network is again being gradually and carefully expanded, the airline notes that revenues are lagging far behind. Combined with countries are now beginning to tighten their more relaxed travel restrictions, things are very uncertain.
With KLM not expecting to recover between 2023 and 2024, the airline is preparing to reach for the cutting axe. Whilst it has taken state loans and guaranteed bank credit facilities amounting to a maximum of €3.4 billion, the airline finds itself in a position to reduce its workforce down to the number needed for the planned operation in 2021/2022.
Of the current total of 33,000 Full-Time Equivalents (FTEs) in the entire KLM Group, the workforce must be reduced by 4,500 to 5,000 FTEs to 28,000 FTEs in the course of 2021.
The airline is taking cuts in various places, including
- The non-renewal of temporary contracts (1,500 FTEs)
- The Voluntarily Departure Scheme (2,000 FTEs).
- Natural attrition (500 FTEs) through retirement and the like in 2020 and 2021
This isn’t enough sadly, with the following facing redundancy:
- Up to 500 ground position
- Up to 300 cabin crew positions
- Up to 300 cockpit positions
- Approximately 400 positions at KLM subsidiaries and Air France-KLM group functions.
And it goes without saying, KLM reserves the right to make further cuts.
KLM will be cooperating closely with the trade unions to draft a social plan for each collective labour agreement domain and subsidiary, as well as maintaining close consultation with the Works Council about further defining the reorganisation. This will include a more detailed specification of the conditions set by the Dutch government on issuing the financing package. Expectations are that this will be finished in October.
In Quotes
KLM President-directeur & CEO Pieter Elbers said
A great deal has already been done in recent months with respect to adjusting the size of our company in the face of a new reality. Unfortunately, more measures are needed in the short term to guarantee KLM’s continued existence in the future. For this reason, we are elaborating the reorganisation plan to emerge from this crisis in a stronger position, while retaining as many jobs as we can in a responsible manner and repaying the loans as quickly as possible.
KLM employees are loyal, professional and hard working. They are always ready to serve our customers, one another, the company and society at large. Recent developments have again served to prove that this is true. It is incredibly difficult and sad for KLM to now have to bid farewell to valuable, committed colleagues. Certainly in view of how much we have succeeded in achieving together in recent years. The forthcoming period will be devoted to saying goodbye to colleagues who have to leave with due care and to reconstructing KLM.
A long road to recovery
Having a network isn’t enough – you also need to have passengers flying on aircraft bringing in the revenue. And it seems the passengers aren’t there at the moment.
With governments adjusting their quarantine and border policies day by day, running an airline becomes very hard indeed
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