KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) has defended itself against criticism by the Dutch state agent, stating it has reduced its controllable costs by 30% over the past year, double the required 15% attached to EUR3.4 billion euros (USD3.6 billion) in Dutch state aid measures provided in 2020.

The airline reacted to a letter sent by state agent Jeroen Kremers to the Dutch Senate on May 24, 2022. In it, he cast doubt on KLM's compliance with conditions for the state support package as agreed on August 7, 2020. On behalf of the Dutch state, the state agent independently monitors compliance with the conditions by KLM and Air France-KLM. His report was in line with the Dutch government's participation in an Air France-KLM capital raise.

According to Kremers, KLM's cost reductions mainly were temporary, and there remained a EUR400 million (USD425 million) deficit in structural savings from 2024. He warned a new collective labour agreement with KLM's pilots for 2022-2023 and a 5% wage increase for all employees from March 1, 2022, did not meet the conditions of the support package. He also flagged alleged tax avoidance by pilots and cabin crew living abroad.

In a clarifying statement, KLM stated it had used EUR942 million (USD1 billion) from the loan package, EUR311 million (USD331 million) of which had already been repaid.

"One of the conditions the Dutch government attached to the loan package was that KLM should cut its controllable costs by 15%. KLM has more than met this demand, managing to reduce its controllable costs by 30% over the last year. This rapid cost reduction, combined with the drastically reduced NOW emergency job-retention scheme, made KLM one of the best performing airlines in Europe over the last three quarters," it stated. NOW refers to the Dutch government's COVID-19 job retention scheme (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud).

It pointed out that KLM employees had contributed up to 20% of their salaries, depending on their income bracket, in agreement with trade unions. "All the collective labour agreements meet the employment conditions-based contribution requirement. The CLA for cockpit crew ran until March 1, 2022, while the current CLAs for ground personnel and cabin crew run until the end of 2022. A new CLA for cockpit crew has been delayed by the International Labour Organisation (ILO) report, which criticises the state-imposed terms and conditions. Discussions around the pilots' CLA will continue over the next few weeks."

As an international company, KLM employed 2.9% of flying personnel who lived outside of The Netherlands. "KLM, the Dutch Airline Pilots Association (VNV), and the FNV Cabin Crew and VNC Cabin Crew trade unions acknowledge that they must always act in accordance with existing legislation and regulations. KLM has established a workgroup with the three unions involved. It aims to find a solution as quickly as possible that is also acceptable to the unions."

KLM said it was also further developing its sustainability agenda according to government conditions.

Meanwhile, KLM trade unions also distanced themselves from the state agent's "incorrect representation of the situation at KLM".

"The entire staff makes an enormous contribution to the recovery of the KLM Group, both operationally and financially. The government condition to reduce costs by 15% has been amply met, partly due to the contribution of the staff. It is, however, to KLM to implement this cost reduction at its discretion. The payment of the deferred wage increase of 5% to the staff this year to cushion the loss of purchasing power fits in with this. Together we are committed to the recovery and future of the KLM Group now and next summer under challenging circumstances of shortages and very high work pressure."