Dutch Airline KLM To Cut Up To 5,000 Jobs By End Of 2021

KLM, the Dutch segment of Air France-KLM, said on Friday it will cut up to 5,000 jobs through the end of next year due to the COVID-19 pandemic. The airline currently has 33,000 employees.

The job cuts will likely include 1,500 compulsory layoffs as well as the nonrenewal of 1,500 temporary contracts, among other measures.

On Thursday, KLM posted a 768 million euro ($910 million) loss for the first half of 2020 as passenger numbers plunged 95% in the second quarter.

Air France itself plans to cut 6,500 jobs by 2022.

KLM and Air France operate independently.

KLM said the airline is “in the throes of a crisis of unprecedented magnitude” and its “road to recovery will be long and fraught with uncertainty.”

The carrier noted while it is operating an ever-increasing number of flights – up to 30% of normal by July, up from 10% in April -- revenues are still “lagging far behind.”

KLM added it does not expect air travel demand to be fully restored until “2023 or 2024 at the earliest.”

The carrier acknowledged state loans and guaranteed bank credit facilities of up to 3.4 billion euros ($4 billion) from the Dutch government will “enable KLM to navigate the crisis in the forthcoming period.”

In exchange for the bailout, KLM is required to cut costs by 15%.

“It is incredibly difficult and sad for KLM to now have to bid farewell to valuable, committed colleagues,” KLM President and CEO Pieter Elbers said. “The forthcoming period will be devoted to saying goodbye to colleagues who have to leave with due care and to reconstructing KLM.”

The Dutch trade union Federatie Nederlandse Vakbeweging, or FNV, criticized KLM.

“We are going to look very carefully to establish if this number of jobs matches the expected shrink in company operations,’ cabin crew union spokeswoman Birte Nelen told broadcaster NOS.