The Dutch government has rejected a restructuring plan presented by Air France-KLM’s Dutch subsidiary due to what is sees as insufficient commitment by the company’s workers to wage freezes.
According to Reuters, which also cited two sources. The Government’s rejection of the plan was based on unions’ refusal to freeze wages through to 2025. The Dutch Government has made its national airline’s €3.4 billion ($4 billion) rescue package dependent on the restructuring plan, which was submitted on October 1st.
The plan includes cutting costs by 15%. The company will also let go of 20% of its workforce, which equals approximately 4,500 jobs this year. Furthermore, the airline has committed to reducing its carbon dioxide emissions by 50% by 2030. Meanwhile, it would seem this was not enough for The Hague, and it is back to negotiations.
Sources familiar with negotiations between the company and government confirmed reports by ANP and newspaper De Telegraaf were accurate. The Finance Ministry and KLM could not immediately comment.
However,the news of the Government’s rejection of KLM’s plan came up the same day Air France-KLM released its third-quarter results for the year. As expected, KLM reported losses of €234 million ($273,5 million) for Q3. The carrier warns that the figures for Q4 could be even more discouraging, given the new set of lockdown.
Pieter Elbers, KLM’s CEO while commenting on the results said “To safeguard the future of our airline and employment opportunities, the loan and loan guarantees offered by the Dutch government are of crucial importance, and the continued grim outlook for aviation throughout the year.”