The survival of Air France-KLM through the Covid-19 crisis cannot be guaranteed without further cost cuts, the Dutch finance minister has warned.
“The survival of Air France-KLM is not a given,” Wopke Hoekstra said in an interview on Dutch public television.
“They will have to address their cost base even as things stand now. And suppose this situation lasts until the end of next year, then they will have to cut even deeper.”
More: British Airways can survive ‘only with government’ support
The European airline group’s immediate future was secured by the French and Dutch governments in July, as they provided a total of €10.4 billion in bailout loans and guarantees to help it survive the impact of the pandemic on air travel.
Dutch arm KLM has said it would cut another 1,500 jobs, reducing its staff by 20% in return for the support, while a pay hike agreed for 2020 was frozen by the company.
Meanwhile, Air France plans to cut 6,500 jobs, or 16% of its workforce, through 2022.
But KLM has so far has failed to reach agreement with unions on the cuts needed to meet the requirements set by the Dutch government.
Hoekstra indicated a thorough restructuring would be necessary for governments to contemplate further support.
“KLM will always be very important for the Dutch economy. But the question is whether that will be enough,” he said.
Air France-KLM said last month that it was losing €10 million a day due to the coronavirus crisis.
More: British Airways can survive ‘only with government’ support
KLM secures €3.4bn bailout by Dutch government [June 20]
