Cabinet is not satisfied with KLM plan, no state aid for the time being | NOW

KLM will no longer receive state aid for the time being. Minister of Finance Wopke Hoekstra announced this in a letter to the Lower House on Saturday. KLM did not agree with the unions on Saturday about an agreement on the longer duration of the cuts, the airline said in a statement. Pilot union VNV decided not to sign the clause. Hoekstra calls the union’s position “disappointing.”

“Earlier today, the cabinet informed the KLM management that, in view of the above, the Dutch state cannot approve the restructuring plan offered and therefore KLM cannot make the next draw of the direct loan made available by the state and of the bank credit facility”, Hoekstra writes.

“It is up to KLM and the unions to ensure that the conditions set are still met,” said the minister.

A new agreement between the airline and the unions is an important condition for the billions in support from the cabinet.

For Minister Hoekstra there was a deal on a so-called commitment clause between KLM and the employee clubs a requirement for the billions in support from the cabinet. Earlier this week, however, Hoekstra announced that he did not agree with the previously set conditions. For example, the minister demands that the term of the wage offerings can be extended.

Through the commitment clause the unions had to commit to the wage cuts that have been agreed. However, the pilots union and FNV would rather stick to the agreement reached with the KLM management on 1 October.

State aid is essential for KLM

At the beginning of October, KLM reached an agreement with various unions about wage moderation until 2022. However, these cuts will take less time than the state aid offered by the government of about five years. The cabinet wants to align these maturities. “The recent agreements on the employment conditions reduction only apply for part of the duration of the support package,” Hoekstra writes.

The state aid is essential for the airline company, which has been hit very hard by the travel restrictions due to the corona crisis. The aid consists of a loan of EUR 1 billion and a guarantee of EUR 2.4 billion.


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