KLM submits restructuring plan to Ministry of Finance

KLM Royal Dutch Airways submitted its restructuring program to the Netherlands Ministry of Finance. The presentation of this restructuring program was a key condition in acquiring a govt bank loan and assures to the worth of EUR three.4 billion. The program outlines how KLM intends to conquer the worst disaster in virtually 101 many years in procedure, explaining how KLM intends to fulfil the disorders imposed by the Netherlands govt. The program is presently less than review at the ministry.

The presentation of the program is a really crucial milestone. Substantively, the program features features this sort of as the reassessment of system, cost-slicing initiatives, financial criteria and how KLM staff members will contribute by way of diminished work disorders.

The basic principle of the restructuring program is that KLM’s current business design is nevertheless valid and important, but that significantly-achieving, structural initiatives are expected to be certain KLM’s future accomplishment. Owing to the consequences of the corona pandemic, KLM is making ready for an extended time period all through which less flights will be operated. The organisation will develop into lesser and a lot less high priced, as very well as extra sustainable, cost-effective and successful.

As KLM performs this sort of an crucial economic and societal function in the Netherlands, the govt has available the airline a bank loan package deal, to which it has connected selected disorders. One particular condition is that KLM staff members really should contribute to KLM’s restructuring by accepting diminished work disorders, amounting to profits-dependent, graduated cutbacks of up to 20%. These diminished disorders will use for the duration of the bank loan time period.

KLM has now attained agreement with all unions for ground, cockpit and cabin staff members on key concepts of this program for the time period as a result of 2022. This features the unions VNC and FNV Cabine in the cabin area and the unions FNV Luchtvaart, CNV, De Unie, VKP and NVLT in the ground area, as very well as the Dutch Airline Pilots Association VNV in the cockpit area.

One particular of the other disorders imposed by the govt is a 15% reduction in controllable prices. The KLM Operates Council has been asked to recommend on the downsizing and even more simplification of the KLM organisation. In addition, there are extra than 70 initiatives that will mostly cut down exterior prices. Major cost financial savings will be reached by phasing out leased plane and deploying a extra successful fleet. KLM is also meeting with suppliers and chain companions to contribute to cost reduction.

In phrases of labour prices, KLM has currently reached financial savings by shedding employment. KLM has currently downsized by way of different measures, like non-renewal of limited-term contracts (1,500 employment) and a voluntary resignation scheme (2,000 employment). By the conclusion of the 12 months, KLM will hire about 4,500 less folks than it did just before the corona pandemic.

Regrettably, even more cutbacks are not able to be excluded in see of the magnitude and gravity of the disaster. KLM has also attained agreement on a social program with trade unions for ground staff and cabin crew. The current collective labour agreement for cockpit crew currently presents a social program.

In addition, KLM will reopen a voluntary resignation scheme concentrating on distinct divisions and departments in get to minimise involuntary dismissals.

The KLM Operates Council has reviewed and evaluated 37 requests for information. The restructuring program is formidable and tension ran large main up to 1 Oct. The constructive contribution of divisional staff members associates and the Operates Council justifies large praise. The Operates Council’s beneficial information on restructuring programs was issue to the successful negotiation of a social program.

“Today we took a major, exceedingly crucial stage in the direction of restructuring KLM. The program we submitted to the Ministry of Finance nowadays is a condition for acquiring a financial package deal, creating this an crucial milestone in KLM’s restoration. The purpose is to be certain that KLM survives this disaster and emerges stronger than just before. The measures are significantly-achieving and unpleasant for KLM staff members, but they are necessary. I am grateful for the support of the Netherlands govt and very pleased of the attempts of all concerned – KLM staff members, our Operates Council and trade unions – who worked with each other to reach this consequence. KLM President-directeur & CEO Pieter Elbers

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