KLM Royal Dutch Airlines (KLM) has announced a series of measures aimed at enhancing its operational and financial performance. This comprehensive plan includes increasing productivity, simplifying the organisational structure, reducing costs and deferring non-essential investments. While KLM's revenues are on the rise, these steps have become necessary due to increasing costs related to equipment, staffing, and airport fees. The airline is also heavily investing in a fleet renewal programme, which involves billions of euros, to transition towards cleaner, quieter and more fuel-efficient aircraft.
The overall objective of these measures is to improve KLM's operating results by €450 million in the short term and align with Air France-KLM's ambition to achieve a sustainable profit margin exceeding 8% by 2026-2028. The strategy reflects KLM's commitment to maintaining its service network and preserving as many jobs as possible. The airline has engaged with its Works Council and trade unions regarding these proposed measures, and further consultations are expected before finalising decisions.
Key elements of the plan include a 5% increase in labour productivity by 2025 through automation and mechanisation, tackling the ongoing pilot and technician shortages and minimising flight cancellations. If necessary, KLM will consider partial outsourcing of maintenance operations to address the technician shortage and supply chain issues affecting spare parts availability.
To reduce overheads, KLM plans to reorganise its flight services and training divisions, and reassess investments in new headquarters and maintenance facilities, while preserving its fleet upgrade commitments. The airline is also trialling new in-flight products and optimising aircraft layouts to boost annual revenues by at least €100 million.
The restructuring will focus on streamlining operations, eliminating redundancies, and exploring options for outsourcing or discontinuing activities that are not directly linked to flight operations. KLM's CEO, Marjan Rintel, emphasised that these changes are crucial for building a robust and future-proof airline, ensuring that KLM continues to connect the Netherlands to the world for many years to come. (€1.00 = US$1.10 at time of publication).
