In “the throes of a crisis of unprecedented magnitude,” Dutch flag-carrier KLM announced today that it would be cutting between 4,500 and 5,000 full-time positions over the course of 2021. The airline said it could potentially need to let even more staff go, as it faces an uncertain road to recovery ahead.
While travel restrictions all over Europe began to ease up in June, countries are again closing down or imposing quarantine measures as more cases of COVID-19 emerge in clusters over the continent. As a result, passengers have again become hesitant about booking plane tickets.
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Readjusting to a new reality
As so many other carriers have been forced to do following the devastating impact of the pandemic on commercial aviation, KLM is bracing itself and its employees for a significant downsizing.
The €3.4 billion ($4.03 billion) state-guaranteed rescue package will see the carrier through the next few months, KLM said. However, the airline states that it needs to lose up to 15% of its 33,000-strong workforce over the next year on the road to recovery. It calls the road “long and fraught with uncertainty.”
“A great deal has already been done in recent months with respect to adjusting the size of our company in the face of a new reality. Unfortunately, more measures are needed in the short term to guarantee KLM’s continued existence in the future,” Pieter Elbers, President, and CEO of KLM said in a statement today.
“For this reason, we are elaborating the reorganisation plan to emerge from this crisis in a stronger position, while retaining as many jobs as we can in a responsible manner and repaying the loans as quickly as possible,” he continued.
These numbers are partially made up of about 1,500 temporary contracts that will not be renewed, and 2,000 that will participate in voluntary redundancy schemes. About 500 will exit through natural attrition such as retirement, but these are not included in the calculations.
This means that about 1,500 staff will be subject to involuntary layoffs. KLM is calibrating it will need to cut 500 ground, 300 cabin crew, and 300 cockpit positions. In addition, approximately 400 administrative jobs at KLM subsidiaries and the Air France-KLM group will need to go.
As all predictions point to air travel demand not recovering until 2023 or 2024, KLM said that it keeps the possibility open for further job cuts, should capacity be reduced further than the current estimates suggest.
Union will be watching closely
KLM says that it will be cooperating closely with trade unions as it navigates organization-wide changes at Air France-KLM. According to DutchNews.nl, a spokesperson for the cabin crew union stated that,
“We are going to look very carefully to establish if this number of jobs matches the expected shrink in company operations.”
During the second quarter, KLM operated, on average, a mere 15% of its usual flights. While that number rose to 30% in July, load factors are still lagging. With the precarious and volatile travel situation and conditions in Europe, it is difficult to tell what the next quarter will bring. However, 2021 will most certainly see a much smaller Dutch national airline.