THE HAGUE, Netherlands (AP) — Dutch airline KLM announced a “painful” round of cost cuts and other measures on Thursday aimed at boosting the carrier’s finances while recovering from the COVID pandemic which grounded planes worldwide.
CEO Marjan Rintel said KLM, along with many others airlines“is faced with high costs and shortages of personnel and equipment. Our planes are full, but our capacity is still not back to pre-corona crisis levels.”
The Dutch airline is part of the Air France-KLM group, which includes a 7.1 billion euros ($8.4 billion) loss in 2020 as the global pandemic grounded planes and halted travel plans worldwide, causing passenger numbers to drop by 67%.
KLM said the package of measures is intended to improve operating profit by 450 million euros ($497 million) in the short term. It did not reveal whether the changes would lead to staff cuts, but said it aims to “protect jobs across the company as much as possible.”
“This is painful for every KLM colleague, but it is necessary and it must be done now,” Rintel said in a statement.
The cost savings will also help pave the way for investments in rejuvenating the KLM fleet to purchase quieter and more economical aircraft, according to financial director Bas Brouns.
Of the planned measures, KLM says it wants to increase productivity, reduce the impact of the pilot shortage, achieve a better balance between European and long-haul flights and look at the possibility of outsourcing part of the maintenance .
It is also reconsidering or postponing many planned investments and exploring options to outsource, divest or discontinue “activities that do not directly contribute to flight operations.”