Netherlands Puts KLM Bailout On Hold After Pilots Reject Wage freeze

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The Dutch government on Saturday put on hold its plan to bail out KLM, the Dutch arm of Air FranceAIRF.PA-KLM, after pilots rejected a wage-freeze until 2025, Finance Minister Wopke Hoekstra said.

“I find it very disappointing, but this way we cannot move forward with the loan now,” Hoekstra told journalists.

The pilots’ union argued that it had already agreed to a freeze until March 2022, and could not now change that agreement at the last minute.

Ahead of the government announcement, KLM CEO Pieter Elbers had said that “without this loan, KLM will not make it through these challenging times”.

In a statement, he said KLM would not immediately go bankrupt but that its reserves “cannot last more than a few months”.

In a letter to parliament, Hoekstra left the door open for the bailout if all KLM employees agreed to the five-year wage freeze.

“The outlook is sombre, that makes it all the more important to have a good restructuring programme in place to work towards KLM’s long-term recovery,” he wrote.

Unions representing ground and cabin crews have agreed to the extended wage freeze, which is set to last as long as the airline receives government support.

Air France-KLM on Friday reported a 67% drop in third-quarter revenue to 2.52 billion euros, just as a new COVID-19 surge poses further threats to an industry devastated by the pandemic and the ensuing collapse in long-haul travel. The airline’s net debt rose by 3 billion euros to 9 billion euros.

– Reuters

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