Dutch government suspends KLM bailouts due to period deadlock

Dutch government suspends KLM bailouts due to period deadlock

Dutch government will halt billions of euros Corona virus The Dutch finance minister said Saturday it would bail out state-run airline KLM in a deadlock over pilot union and rescue package terms.

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If the dispute is not resolved, it could have serious consequences for KLM. 30,000 people. The company announced Friday that it had lost 234 million euros ($233 million) in the third quarter as a result of the aviation stagnation caused by the coronavirus pandemic.

In a statement, CEO Pieter Elbers said, “Without this loan, KLM would not be able to withstand this difficult period. “I am very worried about this deadlock because of this.”

The government threw a lifeline of 3.4 billion euros ($3.96 billion) at KLM in June, helping airlines survive the rapid downturn in air travel caused by the pandemic. The package consists of a loan of 1 billion euros and a bank loan guarantee of 2.4 billion euros.

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However, strings were attached, including a call for KLM to cut costs by 15% and improve the airline’s sustainability.

In a letter to Congress, Finance Minister Wopke Hoekstra said “It is the responsibility of KLM and the union to ensure that the conditions set out are still met.”

KLM submitted a restructuring proposal to the Dutch government on October 1, which was agreed to cut by a union representing pilots, crew and ground staff. However, the contract only applies until 2022. Hoekstra is seeking KLM’s guarantee that the union will agree to the cuts during the bailout period (probably 5 years).

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KLM stated that the five unions have agreed to a “promise” that members agree to cuts for the entire period. One of the unions representing cabin and ground personnel said it was still considering the matter, but the pilots union had not signed.

Hoekstra called the pilot’s position “very disappointing and dangerous.”

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The pilots union said its members have already agreed to a 20% salary cut and “continue to take responsibility to overcome the crisis and make KLM a healthy company again.”

KLM called for additional effort at the last minute and said, “We couldn’t achieve it within this period.”

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