KLM to axe up to 5,000 jobs due to 'unprecedented' crisis

KLM planes parked on the tarmac of Schiphol airport in Amsterdam in April amid a lockdown in the Netherlands. The Dutch carrier said its planned job cuts were necessary as it had made huge losses despite a €3.4 billion (S$5.5 billion) government ba
KLM planes parked on the tarmac of Schiphol airport in Amsterdam in April amid a lockdown in the Netherlands. The Dutch carrier said its planned job cuts were necessary as it had made huge losses despite a €3.4 billion (S$5.5 billion) government bailout.PHOTO: AGENCE FRANCE-PRESSE

THE HAGUE • Dutch airline KLM said yesterday that it would shed up to 5,000 jobs due to a "crisis of unprecedented magnitude" caused by the coronavirus pandemic.

The carrier, part of the Air France KLM group, said the cuts until the end of next year were necessary as it had made huge losses despite a €3.4 billion (S$5.5 billion) Dutch government bailout.

The cuts would involve around 1,500 compulsory layoffs from KLM's current workforce of 33,000, the airline said.

There would also be 2,000 voluntary redundancies, announced earlier this year, while further cuts would be made through non-renewal of 1,500 temporary contracts. "KLM is in the throes of a crisis of unprecedented magnitude... Expectations are that the road to recovery will be long and fraught with uncertainty," the airline said in a statement.

"This means that KLM's structure and size must be rigorously adjusted even further in the years ahead.

"Consequently, a total of 4,500 to 5,000 positions in the entire KLM group will cease to exist."

The jobs lost would involve up to 300 flight crew, 300 cabin crew, 500 ground staff and around 400 jobs at KLM subsidiaries and in the Air France-KLM group positions.

KLM said it would "keep open the possibility of further reductions" due to the "high level of uncertainty" in the airline business due to the pandemic, with demand not expected to recover until 2023 or 2024.

"It is incredibly difficult and sad for KLM to now have to bid farewell to valuable, committed colleagues," KLM chief executive Pieter Elbers said in the statement.

KLM on Thursday reported an unprecedented €768 million loss for the first half of this year, with passenger numbers falling 95 per cent in the second quarter - from nine million to less than half a million.

Yesterday, airline conglomerate IAG, the owner of British Airways, posted a first-half net loss of €3.8 billion.

The group, which had posted a year-earlier net profit of €806 million, also unveiled plans for a capital increase of up to €2.75 billion in a results statement, as it seeks to navigate the fallout from the crisis.

LONG, UNCERTAIN ROAD TO RECOVERY

KLM is in the throes of a crisis of unprecedented magnitude... Expectations are that the road to recovery will be long and fraught with uncertainty. This means that KLM's structure and size must be rigorously adjusted even further in the years ahead. Consequently, a total of 4,500 to 5,000 positions in the entire KLM group will cease to exist.

DUTCH AIRLINE KLM

IAG, which also owns Iberia and Vueling, swung to a pre-tax loss of €4.2 billion. Revenues tanked 56 per cent to €5.3 billion in the reporting period.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on August 01, 2020, with the headline 'KLM to axe up to 5,000 jobs due to 'unprecedented' crisis'. Print Edition | Subscribe