In a dispute with the government of the Netherlands, pilots of KLM Royal Dutch Airlines (KLM) finally reached an agreement on prolonged wage cuts for the next five-year period, until 2025. The agreement cleared out the way for the Dutch airline to receive the government financial aid package of €2.4 billion.

Speaking to local media, Willem Schmid, the Chairman of the VNV pilots union, said that only after the agreement was reached, the Dutch government would be able to provide the financial support which was crucial for KLM to deal with the COVID-19 crisis.

“Calm needs to return to our company,” announced Schmid.

The government of the Netherlands froze €3.4 billion-worth of financial aid after the trade unions of the airline refused to sign a five-year agreement related to stricter terms of pilot wage cuts on October 31, 2020. 

The trade unions of KLM refused to sign the agreement after the government’s announcement that wage cuts for the company’s employees would be extended for at least a five-year period until 2025. 

Earlier on October 1, 2020, after KLM had submitted their restructuring plan, the trade unions of the air carrier agreed to 20% wage cuts, but only for a period until 2022.

In June 2020, the Dutch government provided KLM a €1 billion governmental loan as a minor part of a €3.4 billion financial package. 

After signing the recent agreement, KLM would receive the other part of €2.4 billion in guarantees for bank loans. In order to receive the whole aid package, KLM was asked to commit to cut costs by 15% and improve its sustainability.

According to the airline’s financial report of Q3 2020, KLM recorded a €234 million loss as a result of the drop in the air travel demand related to the COVID-19 pandemic.