KLM has secured €3.4 billion in government funding from the Dutch State. The funding is in addition to the €7 billion secured by Air France from the French Government.
The airline says that the funding “ensures that KLM can continue its activities and that the company’s position is strengthened towards the future”
“The conditions imposed by the Dutch State on the financing package relate to the entire KLM Group and include terms of employment of all KLM Group employees, the variable remuneration of management and top management, restructuring, dividend, governance, network quality, sustainability and liveability.”
The sustainability conditions include cutting the number of night flights by 20 per cent to reduce the impact of aircraft noise around Amsterdam’s Schiphol airport, to encourage rail travel, and halve CO2 emissions by 50 per cent per passenger by 2030, according to Bloomberg.
KLM CEO Pieter Elbers said,
“Due to COVID-19 KLM is currently in an unprecedented crisis.”
“The financing package is necessary to secure the long and difficult road of recovery in the coming period.”
“This is a very important step and I express my gratitude on behalf of all KLM colleagues to the Dutch state and the banks for their confidence in our organisation and our future. With the financing package, KLM can continue to fulfil its important social role in economic recovery and sustainability. In the coming period, we will be working on the restoration of the route network and, on the other hand, on the development of the restructuring plan and the far-reaching conditions that have been imposed on the package.”
The financing package and the conditions under which this package is provided by the Dutch state need to be approved by both Dutch parliament and the European Commission under the Temporary Framework for State aid measures. After this KLM will draw up a restructuring plan that “aims to review KLM’s current activities and adapt KLM to the changed economic reality”.