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KLM Submits Reorganisation Plan To The Dutch Government



KLM Boeing 787 Dreamliner Anjer

KLM Royal Dutch Airlines said on Thursday night that it has submitted a reorganisation plan to the Netherlands Ministry of Finance, which is an important part of its government financial assistance for 3.4 billion euros (3.99 billion US dollars).

The Dutch airline stated that its plan includes cost-cutting measures such as lower wages. The company is currently preparing for the reduction of air travel for a longer period than expected due to the new development of the pandemic.

KLM said that the Dutch government has sent them a loan package with certain conditions. One of the conditions is that KLM employees should make their own contributions to the restructuring of the company and accept the reduction of work benefits, which is equivalent to gradual progress. The salary reduction of employees depends on the company’s income situation, and the maximum reduction ratio is 20%.

KLM has laid off jobs in response to what it calls the worst crisis in the company’s history. The company should have laid off approximately 4,500 employees by the end of 2020.

KLM said that the restructuring plan also includes a 15% reduction in controllable costs.

KLM B787-9 Delivery
KLM B787-9 Delivery

The presentation of the plan is a very important milestone. Substantively, the plan includes elements such as the reassessment of strategy, cost-cutting initiatives, financial considerations and how KLM staff will contribute by way of reduced employment conditions.

The basic principle of the restructuring plan is that KLM’s existing business model is still valid and valuable, but that far-reaching, structural initiatives are required to ensure KLM’s future success. Owing to the effects of the corona pandemic, KLM is preparing for an extended period during which fewer flights will be operated. The organisation will become smaller and less costly, as well as more sustainable, economical and efficient.

As KLM plays such an important economic and societal role in the Netherlands, the government has offered the airline a loan package, to which it has attached certain conditions. One condition is that KLM staff should contribute to KLM’s restructuring by accepting reduced employment conditions, amounting to income-dependent, graduated cutbacks of up to 20%. These reduced conditions will apply for the duration of the loan period.

KLM has now reached agreement with all unions for ground, cockpit and cabin staff on key principles of this plan for the period through 2022. This includes the unions VNC and FNV Cabine in the cabin domain and the unions FNV Luchtvaart, CNV, De Unie, VKP and NVLT in the ground domain, as well as the Dutch Airline Pilots Association VNV in the cockpit domain.

One of the other conditions imposed by the government is a 15% reduction in controllable costs. The KLM Works Council has been asked to advise on the downsizing and further simplification of the KLM organisation. In addition, there are more than 70 initiatives that will mainly reduce external costs. Significant cost savings will be achieved by phasing out leased aircraft and deploying a more efficient fleet. KLM is also meeting with suppliers and chain partners to contribute to cost reduction.

In terms of labour costs, KLM has already achieved savings by shedding jobs. KLM has already downsized by way of various measures, including non-renewal of short-term contracts (1,500 jobs) and a voluntary resignation scheme (2,000 jobs). By the end of the year, KLM will employ around 4,500 fewer people than it did before the corona pandemic.

Regrettably, further cutbacks cannot be excluded in view of the magnitude and gravity of the crisis. KLM has also reached agreement on a social plan with trade unions for ground personnel and cabin crew. The existing collective labour agreement for cockpit crew already provides a social plan.

Furthermore, KLM will reopen a voluntary resignation scheme targeting specific divisions and departments in order to minimise involuntary dismissals.

The KLM Works Council has reviewed and evaluated 37 requests for advice. The restructuring plan is ambitious and pressure ran high leading up to 1 October. The constructive contribution of divisional staff representatives and the Works Council deserves high praise. The Works Council’s positive advice on restructuring plans was subject to the successful negotiation of a social plan.

“Today we took a major, exceedingly important step towards restructuring KLM. The plan we submitted to the Ministry of Finance today is a condition for obtaining a financial package, making this an important milestone in KLM’s recovery. The aim is to ensure that KLM survives this crisis and emerges stronger than before. The measures are far-reaching and painful for KLM staff, but they are necessary. I am grateful for the support of the Netherlands government and proud of the efforts of all involved – KLM staff, our Works Council and trade unions – who worked together to achieve this result.”

KLM President-directeur & CEO Pieter Elbers

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Route Network

Singapore Airlines To Bring Back The World’s Longest Non-Stop Service To JFK



Singapore Airlines A350 Livery

Singapore Airlines (SIA) will return to New York on 9 November 2020, when it launches non-stop flights between Singapore and John F. Kennedy International Airport.

Before the pandemic, Singapore Airlines host the title of flying the world’s longest flight by a whooping distance of 15,344 km between Singapore Changi and Newark Liberty airport. The airlines claims by shifting to JFK International Airport would allow them to better accommodate a mix of passenger and cargo traffic on its services to New York in the current operating climate. 

Singapore Airlines’s non-stop services to New York would also be supported by the growing number of transfer passengers who can now transit via Singapore’s Changi Airport.

SIA also anticipates significant cargo demand from a range of industries based in the New York metro area, including pharmaceuticals, e-commerce and technology firms. 

The new service will provide the only non-stop air cargo link from the U.S. Northeast to Singapore, which serves as a regional distribution hub for many major U.S.-based companies.

Singapore Airlines Business Class Onboard B787
Singapore Airlines Business Class Onboard B787

Singapore Airlines will also be operating the route with a 3-class configuration Airbus A350-900 long-range aircraft. This aircraft is configured with 42 Business Class, 24 Premium Economy Class and 187 Economy Class seats.

Today, SIA operates non-stop services to Los Angeles.

It will continue to review its operations to the United States, and assess the growing demand for air travel amid the ongoing recovery from the Covid-19 pandemic, before deciding to reinstate services to other points in the country.

“Operating these flights between Singapore and New York’s JFK International Airport represent an important step in the rebuilding of our global network.

Non-stop ultra-long services are the bedrock of our services to the key U.S. market. We will continue to ramp up existing services and reinstate other points as the demand for both passenger and cargo services return.

Despite the challenging times for the airline industry, there are some early signs of optimism about a recovery in air travel.

Our customers say that they are increasingly confident about air travel, given the robust health and safety measures that are in place, as well as testing regimes to protect them and our staff.

This optimism is also driven by recent moves by countries such as Singapore, which are easing the restrictions on both transit and inbound passengers in a safe and gradual manner.”

Lee Lik Hsin, Executive Vice President Commercial for Singapore Airlines

Resuming New York Services From A New Home

Details of the flight services are shown below:

FlightFlight DaysDeparture Time*Arrival Time*Flight Time
SQ 24 SIN-JFKMon, Wed, Sat22573018 hours 5 minutes
SQ 23 JFK-SINMon, Wed, Fri22300610 (+2 days)18 hours 40 minutes
*All timings in local time

Starting on 9 November 2020, flight number SQ24 will operate from Singapore Changi Airport to John F. Kennedy International Airport three-times weekly, and same return frequencies under SQ23 will be flown from 11 November 2020.

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