New collective labor agreements for KLM pilots do not meet corona support requirements

The new collective labor agreements that KLM wants to conclude with pilots do not meet the conditions that were set when the company received billions of dollars in state aid during the corona crisis. This is reported by the so-called government agent of KLM, according to a comment by Minister Sigrid Kaag (Finance) to the House of Representatives.

Under the Corona support agreements, KLM had to guarantee cost savings with both temporary and structural effects. The company had to inform the government official of the plans in this area. The Kingdom Representative checks whether the airline complies with the agreements.

In 2021 it was still possible to save sufficient costs, even if these were mostly temporary measures. Since then, no more measures have been taken from KLM to meet the requirement of structural cost reduction.

“The pilot collective labor agreement has not resulted in significant structural cost savings. On the contrary, the collective labor agreement contained a structural wage increase.” The collective labor agreement had not yet been signed by the pilots, because, according to the Kingdom Representative, there was still discussion about it.

The 5% salary increase planned in the collective labor agreement for all employees also does not meet the requirements, unless KLM starts saving in a different way.

KLM evades very little tax

In addition, according to the government representative, KLM has little interest in tax evasion by pilots and cabin crew living abroad. Tax evasion is not prohibited, but it is undesirable. That is why the government wants KLM to prevent this in exchange for government support.

“In March, KLM reported that a working group of pilots had been set up to propose measures to the state agent about this tax evasion before 1 May. any action. It is still awaiting proposals for concrete measures. The violation of this support need, which has been going on for nearly two years, has not ended.”

KLM received 3.4 billion euros in support in the form of a loan that the company must repay within 5.5 years. The Dutch government gives a 90 percent guarantee.

KLM hopes to find a solution soon

Kaag calls the government official’s findings ‘strong’. According to him, they show that “we are not there yet”.

In its response, KLM states that it has pledged 3.4 billion euros in aid, but KLM used 942 million euros. Of this, 311 million euros has been repaid. In addition, the company has reduced its “manageable costs” by 30%. This is more than the agreed 15%.

The airline hopes to quickly find a solution for the collective labor agreement pilot in consultation with the trade unions.