Dutch carrier KLM said Friday it will cut between 4,500 and 5,000 jobs because of the Covid-19 crisis.
The parent company of KLM, Air France-KLM on Thursday posted a 1.55 billion euro ($1.8 billion) operating loss for the Q2, with traffic down by 95% YoY.
The company said in a statement that in addition to 1,500 job losses, some 1,500 temporary contracts won’t be renewed and 2,000 jobs will be suppressed via a voluntary departure scheme. The group also expects “natural attrition through retirement” to help cut an extra 500 jobs.
KLM said the new cuts would mean its workforce, which was 33,000 before the pandemic, would be reduced by 20% in all by 2022. It did not rule out further cuts.
Chief Executive Pieter Elbers said, KLM does not expect demand to fully recover before 2023 or 2024 and said further staff reductions are possible “given the high level of uncertainty.”
The restructuring was aimed at retaining as many “jobs as we can in a responsible manner and repaying loans as quickly as possible,” he said.
By comparison, Air France SA plans to cut 6,500 jobs, or 16% of its workforce, through 2022.
The Dutch and French governments have given the two national carriers, which merged in 2004, a combined 10.4 billion euros ($12.4 billion) in bailout money, in a mix of loans and loan guarantees.
Conditions imposed by the Dutch government include pay cuts for executives and pilots and a ban on bonuses and dividends.
KLM, while smaller than Air France, contributed more to group profits in the years before 2020, leading at times to friction between the French and Dutch governments.
Traffic is gradually resuming at KLM, although Elbers said the latest uptick in cases in many countries could threaten that.
While most of KLM’s routes have been restored, it said last week it planned to operate about 13,000 flights in August, still down 60% from the same month a year ago.
(Source – The Finance Post)
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