In this news, we discuss the Netherlands puts KLM bailout on hold after pilots reject wage freeze.
THE HAGUE (Reuters) – The Dutch government on Saturday suspended plans to bail out KLM, the Dutch branch of Air FranceAIRF.PA-KLM, after pilots rejected a wage freeze until 2025, the Minister for Finances Wopke Hoekstra.
KLM was to receive an envelope of 3.4 billion euros (4.0 billion dollars), including 1 billion euros in direct loans. government to help it cope with the damage from the coronavirus pandemic.
“I find it very disappointing, but this way we cannot move forward with the loan now,” Hoekstra told reporters.
The pilots’ union argued that it had already agreed to a freeze until March 2022 and now could not change that deal at the last minute.
Prior to the government’s announcement, KLM CEO Pieter Elbers said “without this loan KLM will not survive these difficult 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 rescue if all KLM employees agreed to the five-year wage freeze.
Dutch government suspends KLM bailout on pilots’ salaries
“It’s up to KLM and the unions to make sure they respond to government demands after all,” he said, adding that the second wave of the coronavirus pandemic has changed expectations about how quickly with which airlines could bounce back.
“The outlook is bleak, which makes it all the more important to have a good restructuring program in place to work towards KLM’s long-term takeover,” he wrote.
Unions representing ground and cabin crew have agreed to the extended wage freeze, which is expected to last as long as the airline receives government support.
Air France-KLM on Friday announced a 67% drop in third-quarter revenue to 2.52 billion euros, just as a new wave of COVID-19 poses new threats to an industry devastated by the pandemic and the collapse of long-haul travel that followed. The airline’s net debt rose from € 3 billion to € 9 billion.
Reporting by Stephanie van den Berg; Editing by Kevin Liffey
Original © Thomson Reuters