November 25, 2020

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Government support for KLM billions is still unclear NOW

Government support for KLM billions is still unclear NOW

Until the very last moment, it is exciting to see whether the government considers the restructuring plan presented by KLM earlier this month to be sufficient. According to Finance Minister Wopke Hoekstra, discussions are still going on and all variants are still on the table, he said on Friday.

So, rejecting the plan is another option. “We will inform the House of Commons about it, we have the rest of this month for it,” says Hoekstra.

The pain point lies mainly in the length of the agreements KLM has made with the unions on the cuts within society. Substantial cuts are a requirement of the cabinet for the billions in support.

“We always agreed that the term of the loan determines the agreement,” says Hoekstra, who has not yet been able to find a final yes or no. The loans have terms of more than five years, those of the agreements with the trade unions for less than two years.

Upon request, a spokesman for KLM Kup.nl informed that an urgent meeting with the unions was planned for Friday.

At the end of June, KLM and the cabinet reached an agreement on state aid to help the badly damaged society caused by the corona crisis. This included a € 1 billion direct loan and a € 2.4 billion loan from eleven banks. The government guarantees the latter.

Part of the conditions for the state aid was that KLM would enter into cost-cutting agreements with all unions. KLM presented a recovery plan on October 1 outlining how the company intends to meet the conditions.

“It is important that it is tax money”

Hoekstra pointed out on Friday that KLM is the company that has made the most use of the NOW program in the Netherlands. “It’s the only company we’re willing to invest a lot in so we can ask for something in return. It’s important that it’s taxpayers’ money.”

The minister also pointed to the huge loss that KLM and parent company Air France-KLM reported on Friday. Aviation is badly affected by the corona crisis.