KLM announces restructuring that affects 5,000 jobs

A dutch airline KLM announced today a restructuring that will affect about 5,000 jobs and reduce the staff by about 15%, as part of a cost reduction plan.

“The continuity of KLM is not guaranteed”, warned Executive President (CEO), Marjan Rintel, when presenting the financial results in the third quarter.

Marjan Rintel stressed that the increase in fuel prices, international instability and high operating costs require “drastic and sometimes painful” decisions.

She acknowledged that the changes would affect workers who “spent their lives” in the company, but argued that “do nothing would have much more painful consequences, both for employment and for the connection” of the Netherlands with the world.

KLM hopes that changes can be implemented through reforms, voluntary exits and reallocations within the company.

The company explained that 1,250 ‘catering’ jobs are already managed in collaboration with Gategroup, while another 800 jobs in land services will be transferred to external companies.

In addition, it will transfer 2,000 jobs to the Air France-KLM group to which it belongs, and plans to reduce another 1,000 by changes in the organisation of work.

The restructuring also provides for changes in working conditions, greater collaboration with other companies and an increase in productivity of at least 8% by 2028, accompanied by moderate wage increases.

The announcement appears despite KLM’s improved results in the third quarter of the year, with an operating profit of EUR 458 million, plus 106 million more than in the same period of the previous year, which is explained by “greater revenues from ticket sales and cost reduction”.

However, the company considers that these results are still insufficient to meet the costs and finance the necessary investments, and the objective is to increase the annual operating result to a value of between EUR 1,000 and EUR 1,400 million.

Among the measures announced is the renewal of the European fleet, with more small aircraft to better adapt flights to demand and the progressive withdrawal of Boeing 737 and Embraer E190.

KLM, which operates direct flights to 160 destinations from Schiphol airport in Amsterdam, also aims to simplify the organisation and strengthen the position within the Air France-KLM group.