KLM will no longer receive state aid for the time being. Minister of Finance Wopke Hoekstra announced this in a letter to the Lower House on Saturday. KLM did not agree with the unions on Saturday about an agreement on the longer duration of the cuts, the airline said in a statement. Pilot’s union VNV and FNV, the ground crew union, decided not to sign the clause. Hoekstra calls the union’s position “disappointing”.
“Earlier today, the cabinet informed the KLM management that, in view of the above, the Dutch state cannot approve the restructuring plan offered and therefore KLM cannot make the next draw of the direct loan made available by the state and of the bank credit facility”, Hoekstra writes.
“It is up to KLM and the unions to ensure that the conditions set are still met,” said the minister.
At the beginning of October, KLM reached an agreement with various unions about wage moderation until 2022. However, these cuts will take less time than the state aid offered by the government of about five years. The cabinet wants to align these maturities. “The recent agreements on the employment conditions reduction only apply for part of the duration of the support package,” Hoekstra writes.
State aid is essential for KLM
A new agreement between the airline and the unions is an important condition for the billions in support from the cabinet.
The state aid is essential for the airline company, which has been hit very hard by the travel restrictions due to the corona crisis. The aid consists of a loan of EUR 1 billion and a guarantee of EUR 2.4 billion.
For Minister Hoekstra there was a deal on a so-called commitment clause between KLM and the employee clubs a requirement for the billions in support from the cabinet. The unions reached an agreement with the KLM management earlier on October 1, but Hoekstra announced earlier this week that he did not agree with the previously set conditions.
For example, the minister is now demanding that the term of the wage sacrifices can be extended. Through the commitment clause the unions must commit themselves to wage agreements for the next five years. However, the pilots union and FNV prefer to stick to the previously concluded agreement.