KLM does not comply with the conditions for billions of dollars in support

Robin UtrechtKLM aircraft at the gate at Schiphol (archive photo)

NOS Nieuws•gisteren, 19:09

KLM again did not comply with the conditions of the corona support package. This is what the regulator, also known as the state agent, writes in its latest report to the Ministry of Finance.

During the corona crisis, the airline received the largest support package of all Dutch companies, together about 3.4 billion euros. There were, however, a number of conditions. For example, KLM had to implement structural cutbacks. State agent Jeroen Kremers had to ensure that the company complied with these conditions in recent years.

And that has not happened time and time again, says Kremers. For example, the airline has implemented too few structural cost savings. While low-paid ground and cabin crew and the top of the company agreed to hand in part of their salary in 2022, he said the contribution of the higher paid staff was “well below the conditions”.

Misleading annual report

KLM staff also received a profit sharing last year, against the agreements. The airline also continued to facilitate tax avoidance by flight personnel. According to the state agent, KLM “disguises and distorts” this in the annual report, which he describes as “misleading”.

All in all, the state agent’s conclusions are bleak. “KLM’s financial position is so weak that the support operation has not resulted in a company that can be trusted to stand on its own two feet even in the event of new setbacks,” Kremers writes.

“Instead, the support at KLM has helped to maintain a too generous cost position. Government authority has been damaged”

KLM: criticism is unjustified

In a response to the ministry, KLM says that it finds the criticism of the state agent unjustified. According to the airline, the savings targets have been achieved and salary has been surrendered according to means. The company terminated the loan and state guarantee last month.

Trade unions also believe that the state agent’s report paints the wrong picture. According to them, the reports contain “inaccuracies and personal opinions, while also ignoring unwelcome facts”.

Minister Kaag writes in a response to the House that there will be a further assessment of the extent to which KLM has complied with the conditions. Based on this, the government will decide whether to take further steps, such as going to court. MPs react very critically to KLM’s actions. Thursday morning there will be a debate on state participations and KLM will also be discussed.

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