Insight: KLM’s week of political grilling

KLM had a tough and rough week, not from an operational point of view but politically. The Dutch airline was grilled in parliament following a highly critical report of the state agent, which concluded that KLM has failed to meet numerous terms and conditions set out in the 2020 state aid package

. KLM tried to factually counter the claims, but this was too late and damage was already done. AirInsight got a chance to discuss the situation on Sunday with CEO Marjan Rintel ahead of the IATA AGM in Istanbul. Insight: KLM’s week of political grilling.

First, let’s recap what it is all about. In June 2020 and months after the first Covid wave struck, the Dutch government came to the rescue of KLM with a €3.4 billion package. It consisted of a direct loan and loans from fourteen banks, guaranteed by the state.

The package was conditional: KLM would have to reduce controllable costs by fifteen percent and improve productivity. Employee groups earning the most (including the pilots) would have to contribute the most and cut their wages by twenty percent. The airline would also have to do more to end tax evasion of mostly pilots living abroad. There was also a raft of conditions on sustainability, including the termination of ultra-short flights from Amsterdam and a reduction of night flights into Schiphol. A specially appointed state agent, Jeroen Kremers, was commissioned with checking if these terms were met.