KLM has a maximum of 5,000 full-time jobs, also known as full-time equivalent (FTE). Not everyone will leave voluntarily: 1500 FTE will be cut. This probably means that more than 1500 people have to be forced out because not everyone works full-time.
Sack people, what else?
But there are also other places where pruning is going to be done. For example, the fleet of aircraft is being reduced. Old types such as the illustrious Boeing 747 are discarded faster and the delivery of new aircraft is postponed, CEO Ben Smith said during a conference call.
In addition, the company will try to save on purchasing and housing. For this, KLM will renegotiate with suppliers.
It is enough?
That question cannot be answered, says Elbers. It very much depends on how the corona crisis develops. The company now assumes 20 percent less will be flown next year than before the virus outbreak.
“The raw reality is a loss of 800 million euros in the past six months, which has never happened before,” said Elbers, who does not exclude further interventions. “You have to be honest and transparent about that. If we have aircraft on the ground for months to come, we must take the next steps.”
The old level will not be reached until 2024 at the earliest, the group expects. Financial director Frédéric Gagey expects 45 percent of the old level for the third quarter, and 65 percent for the last quarter of this year.
“We are living in an uncertain time and are already seeing an increase in the number of restrictions,” agrees Joris Melkert, aviation expert at TU Delft. “That means fewer people are going to take the plane. And that determines when the market will start to pick up again,” he explains. If the market is picking up quickly, a lot will be flown again soon, Melkert expects. “We are short of memory all together.”
Are tickets getting cheaper now?
To get their planes full again, Chinese airlines stunt with unlimited flights for a fixed amount. And Emirates is trying to lure customers with a promise to reimburse medical expenses if a passenger becomes infected with the corona virus.
KLM is not going to do that, says Elbers. “It’s a creative way to get people to fly,” he says. “But we focus on flying safely to as many destinations as possible.” Furthermore, the company is as flexible as possible with tickets, but there will be no special price reductions, says the CEO.
Is the pain equally shared between France and the Netherlands?
At KLM, a maximum of 5,000 FTEs will be cut, representing 15 percent of the total number of employees. The 7,500 jobs Air France is cutting represent 17 percent of all French personnel. The umbrella company has to leave 1,900 FTEs, of which KLM is responsible for a maximum of 400.
More jobs are therefore lost among the French. But that happens to the French without forced layoffs. That has made the French government a requirement for the 7 billion state aid.
On the other hand, all KLM employees have so far been paid their full salary thanks to the help of the state. In France, workers had to settle for a temporary cut of 16 to 25 percent.
The plan that KLM presented today is far from final. It will still be negotiated with the unions. For example, they want staff who earn less than one and a half times as much as possible to be spared as much as possible.
Another wish of the FNV union is that KLM does not hire flex workers to replace the departing people. Elbers does not want to promise that. “We are going to talk about that, it has to fit.” In a normal situation, about 10 to 15 percent of the staff consists of flexible workers.
KLM should not only come out with the unions. The reorganization plan must also meet the requirements set for the 3.4 billion euro rescue package of the Dutch state.
This concerns, among other things, a wage sacrifice, whereby KLM has to compromise between the government’s requirement and the agreements in collective labor agreements. “We have little choice: with the high debts of today, there is an offering from all KLM employees,” said Elbers.