KLM €3.4bn bail-out in doubt as pilots reject five year pay cut plan

Photo: Depositphotos.com
Photo: Depositphotos.com

The stand-off between airline KLM and pilots union VNV continued on Sunday, after the union refused to agree to a five-year pay cut in return for a government bail-out package worth €3.4bn.

The powerful 3,000-strong pilots union earlier agreed to a pay cut lasting to 2022 and has refused to extend this to 2025, as finance minister Wopke Hoestra is now demanding.

Hoekstra said on Saturday he wanted to see a company-wide wage moderation package up to 2025, when the government support is due to end. Without it, he said, there would be no more state support for the ailing airline.

KLM has already had €1bn in support – mostly to help pay wages – and can count on a further €2.4bn in loans and guarantees, if it meets government efficiency requirements. But the pilots’ union is insisting that wage moderation – a 20% pay cut – end in 2022, as it had agreed earlier with the company.

The Telegraaf says the union has now written to Hoekstra, saying it is prepared to talk about an extension in 2022, ‘depending on the situation at that time’, although this has not been confirmed.

The five other unions, representing ground and cabin crew, as well as technical staff, have agreed to take a five year pay cut.

Hoestra described the pilots’ union position as ‘disappointing’. ‘It is really important now that everybody show responsibility and realise that KLM is in an existential crisis,’ the minister said.

The package so far envisages 5,000 job losses by the end of the year – or around 15% of the total workforce pre coronavirus crisis. Parent company Air France-KLM said on Friday the group had made a net loss of €1.67bn in the third quarter, as passenger numbers fell 70% to 8.8 million.

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