KLM Statement state aid (31 October 2020)

KLM is in the worst crisis of its 101 years of existence. COVID-19 has undermined the good results of recent years. In order to secure the future of the company and its network for the Netherlands, the loan and government guarantees on bank loans totalling EUR 3.4 billion are crucial. KLM is very grateful to the Dutch government for its support and ability to provide financing at this time.

The government has set requirements for the granting of the aforementioned loan package. An important requirement in this respect is that all KLM employees must make a labour contribution during the term of the loan (expected until 2025). In recent months intensive negotiations have taken place with the trade unions in the three collective labour agreement domains (Cockpit, Ground and Cabin) about the fulfilment of the employment condition contribution of KLM employees, in accordance with the percentages and structure required by the government.

The results of these negotiations have been laid down in 'outline collective labour agreement agreements' and are included as such in the restructuring plan that KLM submitted on 1 October. These outline agreements give concrete form to this contribution until the beginning of 2022 (Cockpit) and the end of 2022 (Ground and Cabin).

In October, KLM and the trade unions worked on the main lines of these agreements in detailed agreements. At the same time, on behalf of the government, the Minister of Finance, with the help of a consultancy firm, is assessing the entire submitted by KLM restructuring plan. This evaluation should be completed by the end of October. Specifically in the area of employment conditions, the Minister emphasised to KLM that it should be more explicitly agreed and laid down that the contribution of all KLM employees should apply for the full duration of the loans.

In order to meet this requirement, without repeating the negotiations altogether, there is a 'commitment clause' which will be included in the agreements between KLM and the trade unions. In this clause, all unions must each commit themselves to continue to make the labour conditions contribution with all KLM employees in accordance with the requirement of the Ministry of Finance (whereby the exact details are up to KLM and the unions).

The management of KLM yesterday made an urgent appeal to the unions to agree to this. Today five trade unions CNV, De Unie, NVLT, VNC and VKP signed this clause. FNV (Cabin and Ground) is still considering the matter. The pilots' union VNV has not signed this clause. This means that KLM does not meet the requirements set by the Minister. This outcome was communicated to the Minister this afternoon.

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I realise that we have asked a lot from all parties with the aim of KLM surviving this COVID-19 pandemic; abandoning normal negotiations and procedures and, under great time pressure in this time of crisis, agreeing to hand in working conditions for a longer period of time than the current collective labour agreements.  Last period, together with trade unions and the Works Council, we worked incredibly hard to reach agreements on the contribution of KLM employees in these difficult times. These are unprecedented times that also require unprecedented and unusual steps and approaches. The recent collective labour agreement agreements between KLM and the unions, as concluded on 1 October, show that this is also working together. That is commendable, as is the daily commitment of all KLM colleagues in these difficult times.

It is all the more regrettable that it has not been possible today to get all the unions to sign the 'commitment clause' by the end of October. This was the final step required for approval from the Cabinet. Without this loan, KLM will not get through this difficult time. This makes this impasse extremely worrying.

I would like to express my thanks to the five unions that signed the commitment clause and that have assumed their responsibilities. At FNV, we await the internal deliberations. For the time being, I can only call once again on the pilots' union VNV to take this final step and to fulfil its commitment by signing this clause. In the interests of its members, all KLM employees and the future of our company.

I have only one goal in mind and that is for KLM to survive this crisis. This will only succeed if we all keep the general interest in mind and are prepared to make a contribution that goes beyond our own position.KLM President & CEO Pieter Elbers„