These measures include increasing productivity, simplifying the organisation, cutting costs and deferring or postponing investments. Despite revenue growth, these interventions are necessary because of the rising cost of equipment, staff and airport fees.
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Furthermore, KLM is engaged in an extensive fleet renewal – a billion-dollar investment aimed at cleaner, quieter and more fuel-efficient flying. With the total package of measures, KLM aims to improve its operating result by €450m in the short term. In line with Air France-KLM’s group ambition, this should lead to a structural profit margin above 8% by 2026-2028.
KLM is taking these and other measures to maintain its network and services for customers and to protect jobs across the company as much as possible. The Works Council and trade unions have been informed by KLM of the (proposed) measures and objectives. They will continue to be engaged through the standard consultation process to reach final decisions.
Specifically, this involvement includes:
– Increasing labour productivity by at least 5% by 2025, including through automation, mechanisation and reducing absenteeism,
– Measures to resolve the impact of the pilot shortage and ensure that we can operate all flights with our pilots, with a better balance between intercontinental and European flights,
– Due to the shortage of technicians and ongoing supply problems of parts, KLM can operate fewer flights. Measures are being taken at Engineering & Maintenance to reduce the number of cancellations. If this does not yield sufficient results, options to partly outsource maintenance will be examined,
– All investments (except those in (occupational) safety and compliance) will be reconsidered and postponed, such as the new headquarters and Engineering & Maintenance buildings. We will strive to maintain our fleet investments as much as possible,
– Improvement of existing, and introduction of new products on board. Trials are underway with an expanded catering offer and optimisation of aircraft layout, aimed at increasing revenues by at least €100 million a year,
– Measures to simplify the organisation, achieve more synergy, get rid of overlap and overhead. One example is the planned reorganisation of flight services and training organisations,
– Finally, KLM will explore options for outsourcing, divesting or discontinuing activities that do not directly contribute to flight operations.