In a dispute with the government of the Netherlands, pilots of KLM Royal Dutch Airlines (KLM) finally reached an agreement on prolonged wage cuts for the next five-year period, until 2025. The agreement cleared the way for the Dutch airline to receive the government’s financial aid package of €2.4 billion.
Speaking to local media, Willem Schmid, the Chairman of the VNV pilots’ union, said that only after the agreement was reached, was the Dutch government able to provide the financial support which was crucial for KLM to deal with the COVID-19 crisis.
“Calm needs to return to our company,” announced Schmid.
The government of the Netherlands froze €3.4 billion-worth of financial aid after the trade unions of the airline refused to sign a five-year agreement related to stricter terms of pilot wage cuts on 31 October.
The trade unions of KLM refused to sign the agreement after the government’s announcement that wage cuts for the company’s employees would be extended to at least 2025.
In early October, after KLM had submitted its restructuring plan, the trade unions of the operator agreed to 20% wage cuts, but only for two years.
In June, the Dutch government provided KLM with a €1 billion governmental loan as a minor part of a €3.4 billion financial package.
After signing the agreement, the airline would receive the other part of €2.4 billion in guarantees for bank loans. To receive the whole aid package, KLM was asked to commit to cut costs by 15% and improve its sustainability.
A report on KLM’s finances for Q3, show a loss of €234 million due to the drop in passenger demand related to the COVID-19 pandemic.
Even though the world’s media are now reporting on a possible cure in the fight against COVID-19, the repercussions of what devastation the pandemic brought to the commercial airline industry are still being felt. When the giants within the industry such as KLM are seeking support, a thought, and assistance has to be provided to the smaller regional carriers as well. They may not compare in size to the likes of British Airways, KLM and American Airlines, but they’re just as vital and we’d be lost without all of them. So, governments dig deep and provide support. We might, just might, be seeing a light at the end of the runway.