A €3.4 billion taxpayer-funded bailout for the Dutch flag carrier KLM has been withdrawn by the country’s government after pilots and other unions rejected a plan to slash wages for up to five years. The Dutch Finance Minister Wopke Hoekstra said on Saturday that their refusal was “disappointing”, telling reporters it’s “really important now that everybody take their responsibility and realise that KLM is in an existential crisis.”
KLM had already reached agreements with unions representing pilots, cabin crew and ground staff that included pay cuts for up to two years in an effort to secure the bailout. But earlier this month the Dutch government said the length of pay cuts didn’t go on for long enough and demanded wages be slashed for as long as five years.
Despite intensive last-minute talks with several unions, KLM was unable to reach an agreement by the midday deadline on Saturday. The FNV union said it would seriously consider the proposal as it wanted to help the airline survive the Corona crisis.
“The financial support of the government is indispensable for this, which is why we are going to consider accepting this disclaimer very seriously,” the union said on Friday.
On Saturday, the union said discussions were ongoing despite the deadline passing without an agreement while signalling that pilots might be holding up any potential deal.
“We have not signed,” a spokesperson for the VNV pilots union said of the deal. “We had an agreement in place with KLM on October 1 and now they (the government) are going back on it,” the spokesperson continued.
“A deal is a deal.”
Pilots are said to be worst affected by the planned pay cuts, with local media reporting plans to slash the wages of KLM’s 3,000 strong pilot workforce by as much as 20 per cent.
KLM has described the COVID-19 pandemic as its “deepest crisis since World War II” and has already reduced its workforce by 5,000 employees. During the third quarter, a traditionally strong performing month for airlines in the Northern Hemisphere, KLM lost €745 million.
Flight schedules for the winter are now been dramatically scaled back as a second wave of Coronavirus infections sweep across Europe and the United States.
“Without this loan, KLM will not get through this difficult time,” commented KLM chief executive Pieter Elbers on Saturday. “This makes this impasse extremely worrying”
