Category Archives: KLM Royal Dutch Airlines

KLM reports a 1.2 billion euros operating loss in 2020

Photo: Winter scene at the AMS hub.

KLM Royal Dutch Airlines issued this financial report for 2020:

“2020 was an incredibly tough year for KLM and its people. The relentless COVID pandemic brought KLM’s network to a virtual standstill in April and led to unprecedented losses and increased debt. We had to recalibrate many of our ambitions and constantly adjust our plans. Given the strategic importance of the KLM network for the Netherlands, the government has supported us with loans and guarantees on credit facilities. The NOW scheme has also helped us greatly. Nevertheless, it was with pain in our hearts that we had to say goodbye to more than 5,000 hard-working and dedicated colleagues in 2020. They were part of the blue KLM family.

At the same time, we as KLM are proud that we were able to make an important contribution in 2020 by repatriating 250,000 Dutch people and fellow Europeans and by bringing so many essential medical supplies to the Netherlands with (extra) cargo flights. KLM’s response to the COVID pandemic was a testament to our resilience, creativity and agility.

The consequences of this pandemic are clearly visible in the 2020 figures.  KLM’s turnover fell by 54% to €5 billion. While our anniversary year saw a record 35 million customers, in 2020 only 11 million customers travelled with KLM. KLM’s total operational result came in at a loss of €1.2 billion, despite the fact that the cargo division managed to improve its margins as a result of the strong increase in demand for cargo capacity.

KLM’s financial results show how serious the situation is. Thanks to the support of the Dutch government, KLM has been able to maintain its financial liquidity. I know that I speak for everyone at KLM when I say that we are very grateful to the government and, through it, to Dutch society. The KLM people, in turn, have made their contribution by agreeing to the far-reaching conditions of this financial lifeline from government and banks.

The world of aviation will look very different for a longer period of time, with less traffic and pressure on revenues. This year has also started much less well than we had initially anticipated. Despite that, and looking to the second half of 2021, I sense cautious optimism and hope. People will start flying again and slowly but surely KLM will be able to fly the global network again with all the options available to its customers. KLM’s ambition is not only to survive, but also to remain an important and responsible player in the airline industry after the crisis. To achieve this, a restructuring plan has been drawn up, called ‘From More to Better’. The restructuring plan is agile, based on different market and recovery scenarios, and will allow us to be flexible and create opportunities in the areas of customer experience, digitalization, sustainability and technology.

With the help of our loyal customers and committed staff, KLM will weather this storm and get better, continuing to fulfil its important social and economic role for Dutch society. We will continue to pursue our ambitions and lead the way in sustainability and innovation. The Netherlands can continue to count on our full commitment and contribution when it comes to realizing these ambitions.”

Pieter Elbers – KLM President & CEO

Air France-KLM loses 1.7 billion euros ($2.05 billion) in 2020

Air France-KLM Group issued this financial statement:

The COVID-19 crisis severely impacted the Full Year 2020 results:

 Revenue at 11.1 billion euros, down 59% compared to last year

 EBITDA loss at -1.7 billion euros, limited due to cost control

 Group net employee cost down 35% in 2020 compared to last year, supported by staff reductions, state support mechanisms and activity related wages. Average number of FTEs (Full Time Equivalent) in December 2020 decreased by 8,700 compared to December 2019

 Operating result at –4.5 billion euros, down 5.7 billion euros compared to last year

 Net income at -7.1 billion euros, including restructuring provision at -822 million euros, overhedging at -595 million euros and fleet impairment at -672 million euros

 Net debt at 11.0 billion euros, up 4.9 billion compared to end of 2019  At 31 December 2020, the Group has 9.8 billion euros of liquidity and credit lines at disposal

Read the full report.

KLM develops a safe alternative testing protocol for crews

KLM Royal Dutch Airlines has issued this statement:

After constructive consultations with the Dutch National Institute for Public Health and the Environment (RIVM), KLM has developed a safe alternative testing protocol for crews leaving the airport in countries that are not on the governmental list of safe countries. This includes an alternative whereby, among other things, the rapid antigen test for this crew will be arranged at Amsterdam Airport Schiphol before departing from and after returning to the Netherlands. In addition, there are local safety guidelines at the destinations. The government has indicated that this protocol meets the requirements.

KLM has also implemented the flight ban from the United Kingdom, South Africa and South America to the Netherlands as of 23 January. Cargo flights are excepted in the government measures.

For passengers traveling to Amsterdam from high-risk areas antigen tests are required by the Dutch government, in addition to the already existing PCR test requirement. The necessary procedures have also been put into effect. For a number of customers, the imposed 4-hour limit for this antigen test also causes practical problems, because not all airports in the world have antigen testing facilities. KLM helps customers where possible.

The operation to the limited set of safe countries remains unchanged.

Keeping flight operations running in a safe and responsible manner is and remains KLM’s priority, also since the COVID-19 outbreak in early 2020. This has enabled us to maintain essential travel, repatriation and the transport of necessary cargo so far. In addition, KLM has taken numerous measures on board, such as HEPA filters, facemasks and adjustment of the onboard service. The safety and health of our customers and staff have the highest priority for KLM. KLM also wants to continue to contribute to the fight against the COVID-19 pandemic. To this end, consultation remains necessary on effective and practicable appropriate measures for aviation, taking into account international agreements.

KLM will have to shed a further 800-1,000 jobs

KLM has made this announcement:

KLM is compelled to further downsize its organization. We have already taken an unbelievable array of measures to cope with the crisis sparked by the coronavirus pandemic. Regrettably, this resulted, among other things, in the loss of 5,000 jobs and colleagues at KLM in 2020.

This number was based on the premise that air traffic would begin to recover in 2021. However, KLM has repeatedly warned that this recovery might be delayed, which means a downgrading of the scenario and consequently the loss of more jobs.

The current reality is that the recovery of long-haul traffic will be delayed longer than anticipated, primarily due to existing and new international measures and travel restrictions. This means KLM will have to shed a further 800-1,000 jobs, including 500 FTEs in the Cabin domain, 100 in the Cockpit domain, and 200 to 400 in the Ground domain. The total number of jobs KLM has then reduced will be close to 6,000.

Pieter Elbers, CEO KLM: “In July 2020, we announced that 5,000 of our colleagues would have to leave KLM, after which we engaged with intensive consultation and cooperation with all social partners. Various instruments were made available as part of a social plan. These adjustments were very painful, but successful. I have every faith we will resolve these new challenges together once more.

The further downsizing of our organization does not yet encompass the latest measures announced by the Dutch government in the past 48 hours. These new measures are, however, in line with the restrictions and dynamics we have had to contend with since the start of the pandemic. Even if our crew members are exempt from the new regulations, the further loss of jobs will regrettably be inevitable. The impact of the latest measures will become evident in due course.”

KLM halts all long-haul flights to Amsterdam due to new COVID-19 rules

From Reuters:

“KLM, the Dutch subsidiary of Air France KLM, will halt all its 270 weekly long-haul flights to the Netherlands from Friday after new COVID-19 rules were imposed by the Dutch government, a spokeswoman for the airline said.

Among a series of new regulations announced on Wednesday was a requirement for passengers and crew to show evidence of a second negative rapid coronavirus test taken just before departure.”

Air France KLM Martinair Cargo launches world’s first SAF program for the airfreight industry

Air France KLM Martinair Cargo has launched the world’s first sustainable aviation fuel (SAF) program for the airfreight industry, enabling freight forwarders and shippers to reduce their CO₂ emissions. By investing in the Cargo SAF Program, customers will not only help pioneer the use of SAF in our industry, but will also scale up the SAF market, contributing to a cleaner future for air transport.

SAF – a key instrument in reducing CO₂ emissions The first step towards a carbon-free future is carbon-neutral growth in our industry, which implies there should be no increase in CO₂ emissions despite traffic growth. Investing in SAF is a necessary step in this process and one of the primary instruments in reducing CO₂ emissions. For years, Air France and KLM have led the way in terms of fuel efficiency and seeking alternative fuel solutions. KLM operated the world’s first commercial flight using SAF on 29 June 2011, with a flight from Amsterdam Airport Schiphol to Paris Charles de Gaulle. Shortly thereafter, we began offering our corporate customers the option of compensating for CO₂ emissions from business travel by investing in SAF.

Video:

SAF is still not widely available. That is why we have set up this program for shippers and forwarders, to stimulate and enlarge the market for SAF. Your investment will help to further develop SAF and the market for SAF, but also to put SAF higher on the agenda of all stakeholders. This new program will enable us to team up with shippers and forwarders who share our commitment to sustainability, making SAF more widely available at a more reasonable price, competing with standard jet fuel.

Customers determine level of engagement

The Cargo SAF Program enables shippers and forwarders to power a percentage of their flights with SAF. Customers determine their own level of engagement and we ensure that their entire investment is used for sourcing SAF. When investing in SAF, our customers receive a third-party audited report, justifying the purchased volume of SAF in relation to traffic and indicating the reduction in CO₂ emissions achieved. By participating in the Cargo SAF Program, our customers not only reduce the carbon footprint, but confirm their commitment to leading the industry towards a more sustainable future. Only with the support of all industry stakeholders can we successfully develop a more viable market for SAF.

KLM Cargo (Royal Dutch Airlines) - Martinair Boeing 747-406 ERF PH-CKB (msn 33695) AMS (Ton Jochems). Image: 951924.

Above Copyright Photo: KLM Cargo (Royal Dutch Airlines) – Martinair Boeing 747-406 ERF PH-CKB (msn 33695) AMS (Ton Jochems). Image: 951924.

KLM aircraft slide show:

Delta and KLM Royal Dutch Airlines to offer COVID-tested flights from Atlanta to Amsterdam

Delta Air Lines has made this announcement:

Trans-Atlantic partners Delta Air Lines and KLM Royal Dutch Airlines are launching COVID-tested flights from Atlanta to Amsterdam, effective Dec. 15. The airline partners have worked with the Dutch government, Amsterdam Airport Schiphol and Hartsfield-Jackson Atlanta International Airport to deliver a comprehensive COVID-19 testing program that will allow eligible customers to be exempt from quarantine on arrival after receiving a negative PCR test result on landing in the Netherlands.

The COVID-tested flights will operate four times per week from Atlanta to Amsterdam, with Delta and KLM operating two frequencies each. Only passengers with negative test results will be accepted on board. The flights will initially run for three weeks and, if successful, the airlines hope to extend the program to other markets.

Customers will be able to choose the COVID-tested flights when they purchase their tickets online or opt for one of the alternative Delta or KLM daily flights between Atlanta and Amsterdam that are not covered within the trial program.

Entry requirements for the Netherlands normally include 10 days of quarantine.  However, by completing a negative PCR test five days before arrival in the Netherlands and self-isolating until departure, customers can choose to complete the quarantine ahead of their departing flight. No quarantine will be required upon arrival once the customer tests negative via a second PCR test at Schiphol airport.

This new protocol will be available to all citizens permitted to travel to the Netherlands for essential reasons, such as for certain specified work, health and education reasons Customers who are transiting via Amsterdam to other countries will still be required to follow entry requirements and any mandatory quarantine in place at their final destination.

To fly on Delta and KLM’s COVID-tested flights from Atlanta to Amsterdam, customers will need to:

  • Take a COVID-19 Polymerase Chain Reaction (PCR) test 5 days before arrival in Amsterdam.
  • Take a rapid antigen prior to boarding at the Atlanta airport.
  • Take a PCR test directly upon arrival at Schiphol.

KLM reduces capacity in Europe in response to second wave of COVID-19

KLM made this announcement:

The second wave of coronavirus in Europe has resulted in new lockdowns, prompting KLM Royal Dutch Airlines to make network adjustments for the coming period. KLM will keep serving as many destinations as possible, but will reduce seat capacity and flight frequency.

In the coming months, KLM will serve around 90-95% of the European destinations it served before the crisis. Service will be suspended to a number of destinations, primarily in the United Kingdom. Overall capacity aboard European flights will be reduced from about 50% to 40% compared to pre-corona figures.

In terms of intercontinental service, the number of passenger flights will be around 50-60% of pre-coronavirus levels. If we include our cargo-only services, we will be operating around 65% of our flights.

Network strategy

During the course of the pandemic, KLM strategically opted to restore service to as many of its network destinations as possible. In response to the prevailing circumstances, we are doing so with fewer flights and smaller aircraft. This means our customers have the widest possible choice of destinations, enabling us to maintain our network through our Amsterdam hub. We are also serving many of our intercontinental destinations on a cargo-only basis, in compliance with current travel restrictions.

This strategy has proved successful in recent months and has ensured that we did not have to trim our network as rigorously as some other airlines. August and September showed clear signs of recovery.

Regrettably, the second wave has led to new restrictions throughout Europe, not just in the Netherlands. Capacity will therefore be trimmed again into the coming period. KLM will maintain its existing network strategy, even adding several new destinations. Depending on developments, further adjustments will be made in the coming period.

New destinations

The coronavirus pandemic confirms that a flexible network is very important. By opening new routes, we can make up for declining demand on other routes. KLM also strengthens its market position whenever it adds a new destination to its network.

The following services have been recently added or will be added in the coming months:

  • Effective January 4, 2021, KLM will operate four weekly flights to Riyadh (Saudi-Arabia);
  • Effective December 10, 2020, KLM will operate twice-weekly service to Zanzibar, with a stop in Dar es Salaam (Tanzania) on the return leg to Amsterdam;
  • Since November 8, 2020, we have operated thrice-daily service to the new airport Berlin Brandenburg (Germany);
  • On October 29, 2020, KLM resumed its circle flight Amsterdam-Calgary-Edmonton-Amsterdam, thus restoring service to Edmonton;
  • Since October 25, 2020, we have operated daily service to Poznan (Poland);
  • Since October 24, 2020, KLM has resumed weekly service from Amsterdam to Chengdu and from Beijing to Amsterdam.

Air France KLM Martinair Cargo is ready to distribute COVID-19 vaccines

The Group has made this announcement:

Since the 3rd week of March 2020, Air France KLM Martinair Cargo has made every effort to maintain its global airfreight network, helping to keep vital supply chains in place. This has always been essential, but even more so since the outbreak of the Covid-19 pandemic, ensuring that healthcare facilities as well as private citizens have access to medicines, medical equipment, personal protective equipment (PPE) and other critical products. Approximately 6,000 cargo-only flights have been carried out in recent months. Air France KLM Martinair Cargo is currently operating services to more than 100 long-haul destinations.

One of the next logistical challenges will be the global distribution of the Covid-19 vaccines. Earlier this week, the American pharmaceutical giant Pfizer, together with German partner BioNTech, announced great success in the first interim analysis from the Phase III study of its Covid-19 vaccine candidate.

KLM Cargo (Royal Dutch Airlines) - Martinair Boeing 747-406 ERF PH-CKB (msn 33695) AMS (Ton Jochems). Image: 951924.

Above Copyright Photo: KLM Cargo (Royal Dutch Airlines) – Martinair Boeing 747-406 ERF PH-CKB (msn 33695) AMS (Ton Jochems). Image: 951924.

KLM aircraft slide show:

In terms of volume, distributing the vaccines will be an unprecedented logistical operation. Initial expectations are that around 15 billion vaccines will need to be distributed worldwide. Many of these will also need to be distributed at very low temperatures. The Pfizer vaccine must be kept deep frozen (at -70 degrees Celsius). Others will need to be distributed at a constant temperature of between +2 and +8 degrees Celsius. This means that logistical solutions will be essential to maintain quality throughout the vaccine distribution chain.

Senior Vice President Sales & Distribution Air France KLM Martinair Cargo GertJan Roelands: “Air France KLM Martinair Cargo has years of experience with temperature-controlled transportation of pharmaceuticals and was the first airline group to be CEIV certified by IATA. The distribution of Covid-19 vaccines poses specific challenges in terms of volume, transportation requirements and security. In order to be fully prepared for this we started a Covid-19 Vaccine taskforce four months ago. This taskforce represents all the relevant Air France KLM Martinair Cargo departments. Our teams have been working on an extensive action plan. For example, at our Schiphol Pharma Hub, we opened up a 1,118 m3 Climate Controlled storage facility a few months ago and we are building an additional 2,061 m3 additional Cool Room. At our Charles de Gaulle Pharma Hub, a new Climate Controlled storage area is about to be finished. We also introduced Hybrid and Advanced Passive Solutions that will be used to transport the vaccines, on top of existing full range of Active Containers. Along with many other initiatives, extra monitoring and intervention management have also been implemented.”

Executive Vice President Air France-KLM Cargo Adriaan den Heijer: “We believe that cooperation and building communities around the upcoming global vaccines distribution are essential. We’ve established partnerships with many of the parties in the logistical chain, including forwarders, trucking companies, container providers, airports, cargo/logistical associates, pharmaceutical companies and healthcare-related institutes and authorities. We believe that strong cooperation between partners will be essential to successfully executing this logistical challenge.”

Together with Air Cargo Netherlands (ACN) and Amsterdam Airport Schiphol and with Aéroport de Paris (already two leading European Pharma hubs), we’ve established two taskforces to fully prepare both airports communities for upcoming vaccine transport operations.

Adriaan den Heijer: “In recent weeks, we successfully shipped the first Covid-19 vaccines. Air France KLM Martinair Cargo is ready for this logistical challenge, ready to deliver coronavirus vaccines to the Netherlands, to France and to many other countries around the globe.”

About Air France KLM Martinair Cargo

The Air France-KLM Group is a global airline group with a strong European base. Its main areas of business are passenger transport, cargo transport and aeronautical maintenance. Air France KLM Martinair Cargo is the Air France-KLM Group’s dedicated air cargo business. Air France-KLM Cargo is a member of SkyTeam Cargo (www.skyteamcargo.com) offering an even larger network coverage.

Martinair aircraft photo gallery:

Dutch airline pilots association VNV signs commitment clause

The Dutch Airline Pilots Association VNV joined seven other unions today in agreeing to contribute to KLM’s cost-reduction efforts by signing a “commitment clause”. The airline and the eight trade unions have thus satisfied a key requirement, clearing the way for the Minister of Finance to assess whether KLM now meets the Dutch government’s demands.

KLM is in the midst of the worst crisis in its 101-year history, with the COVID-19 pandemic eroding its strong performance of recent years. The EUR 3.4 billion loan package, consisting of a government loan and guarantees on bank loans, is crucial to securing the future of the airline and its network for the Netherlands. KLM is very grateful to the Dutch government for its support and willingness to provide financing at this time.

The Dutch Government has made its loan package contingent on certain conditions, one being that all KLM employees must agree to surrender certain employment conditions for the duration of the loan (expected until 2025). KLM has spent the past few months hammering out the details of this austerity programme with the trade unions for cockpit, ground and cabin personnel, in line with the required structure and percentages.

The outcomes of these negotiations have been formalised in outline collective labour agreements and incorporated as such into the restructuring plan that KLM submitted to the Dutch Government on October 1, 2020. The outline agreements define the austerity measures that will apply until early 2022 (for cockpit crews) and late 2022 (for ground and cabin personnel). It was especially important to specify the contribution that all KLM employees would be making towards the airline’s cost-reduction efforts over the entire loan period.

To meet this demand without having to re-enter negotiations, a “commitment clause” was inserted into the agreements between KLM and the trade unions. Unions CNV, De Unie, NVLT, VNC and VKP signed the clause on October 31, 2020, with FNV Luchtvaart and FNV Cabine doing so on November 2, 2020.

Today, November 3, 2020, the Dutch Airline Pilots Association VNV also signed the commitment clause. KLM and the eight trade unions have therefore satisfied a key requirement, clearing the way for the Minister of Finance to assess whether the airline now meets the Dutch government’s demands.

“Now that all eight trade unions have signed the commitment clause, we have taken an important step. Since the outbreak of the COVID-19 pandemic in March this year, we have asked a lot of all our employees, but for a common purpose: to steer KLM through this crisis. These unprecedented times call for unprecedented and unusual actions. The far-reaching measures we must take and the accompanying processes and procedures are new and complex for KLM and the trade unions.

The past few days have been incredibly tense for everyone. The company has been under enormous pressure, its reputation has suffered and there have been internal divisions. In the end, however, KLM and the trade unions got through it together, and that’s really what it’s all about. We can now look forward and outward, rebuild our route network for our customers and continue to connect the world with and via the Netherlands. Together, we will honour the trust that the Dutch government has placed in us.”

KLM CEO Pieter Elbers