KLM pilots decline Dutch government wage freeze

·3-min read
KLM airplanes parked at Schiphol Airport
The pilot’s union of KLM, the Dutch arm of Air France, said in a statement that they did not have enough time to agree to a longer wage freeze. Photo: Reuters/Piroschka van de Wouw

KLM (AF.PA) pilots have said they will not agree to a wage freeze demanded by the Dutch government after declining to sign a document accepting said conditions.

The wage freeze plans to stop pay increases up to 2025 in a bid to secure the company’s finances as the coronavirus pandemic continues to rip through the travel industry.

The pilot’s union of KLM, the Dutch arm of Air France, said in a statement that they did not have enough time to agree to a longer wage freeze.

On Friday the Dutch government said it would hold back payments from its €3.4bn ($3.97bn, £3.07bn) bailout package unless KLM agrees to include the freezes in the restructuring plan.

The news came as Air France-KLM revealed that the COVID-19 crisis severely impacted its third quarter results, with revenues down 67% to €2.5bn compared to the year before. It also posted an operating loss of €1bn in the period.

After lockdown restrictions eased earlier this year, the company said it saw a positive demand recovery until mid-August.

Benjamin Smith, the group’s chief executive, said: “After a promising recovery during the summer, the gradual closure of international borders in the second half of August and the resurgence of the pandemic strongly impacted our results in the third quarter, with the group reporting an operating loss of €1bn.

"We are also working closely with our partners on various means, such as rapid detection tests, that would allow traffic within the best sanitary conditions for our customers and employees. Beyond these immediate necessary measures, we are engaged in a more profound transformation of our group, with the objective of exiting this crisis in a stronger position, ready to address the future challenges of our industry,” he said.

READ MORE: Future of airline industry in governments' hands

The airline expects a challenging fourth quarter, with current forward booking sharply lower compared to 2019.

Third-quarter passenger traffic was down 80.7% on the year, KLM said, noting that the “tightening of travel restrictions, border closures and absence of corporate travel delayed the expected traffic recovery.”

July and August were relatively strong months in terms of traffic compared to September, which was affected by restrictive travel measures.

National lockdowns in France, Germany and Switzerland will weigh further on the company’s finances.

Ursula von der Leyen, the European Commission president, said that the EU, Britain, Norway, Switzerland and Iceland have accounted for 1.1 million COVID-19 cases. She warned that numbers would rise “rapidly”.

The UK could also be heading towards a second national lockdown, with West Yorkshire the latest region to go into Tier 3 restrictions on Monday.

UK prime minister Boris Johnson is holding a press conference later this evening. It is believed that a new "stay at home" order could be announced, with schools, colleges and universities exempt from restrictions.

Watch: COVID-19 tests should play a larger role in travel

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