LDutch airline KLM presented a number of measures on Thursday aimed at reducing costs and structurally improving its finances. In the short term, these measures should already lead to an improvement of 450 million euros in operating profit. “It is painful for all KLM colleagues, but it is necessary, and it must be done now,” insists Marjan Rintel, the carrier’s CEO.
The measures decided aim in particular to reduce the shortage of personnel among pilots and technicians. To this end, KLM is considering shortening or accelerating training courses. It also studies ways to improve maintenance efficiency.
Jobs under threat?
At the same time, the airline wants to simplify the organization, looking at duplicative functions and determining to what extent they can be merged. It is still unclear whether jobs will be threatened by this process. The company says in any case it wants to “protect jobs as much as possible”.
The plan plans to increase labor productivity by at least 5% by 2025, notably through automation, mechanization, reducing absenteeism and adapting working hours. KLM also wants to reconsider and postpone all investments, except those related to security. However, investments in the fleet will be maintained wherever possible.
One of the ways to reduce costs is indeed to continue to invest, particularly in aircraft. “In the years to come, KLM will replace its old aircraft with a quieter, cleaner and more fuel-efficient fleet,” explains Bas Brouns, the company’s financial director.
“Stay at the forefront”
“Our planes are full, but our capacity has not yet returned to its pre-covid pandemic level. We want to stay at the forefront of sustainability and customer and worker satisfaction. If we want to continue to do this in a healthy and solid way, we must make clear choices,” says Marjan Rintel.
In particular, KLM plans to improve the range of products on board aircraft in order to increase its revenues by 100 million euros per year. A new catering offer is being tested for this purpose. The carrier is also exploring options to outsource or abandon activities that do not directly contribute to flight operations. We do not yet know what activities these are.
KLM’s revenue and operating profit increased further in the second quarter, but costs remained high. According to Marjan Rintel, this situation has a considerable impact on the company’s finances. “Revenues are good, but they are not enough to cover all costs. This is why we are now taking additional measures,” explained the Dutch boss.
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