Will KLM go bankrupt soon?
Yesterday showed current affairs program Dutch news program EenVandaag the shocking facts about our national pride KLM. Many experts think that if changes are not made quickly at our royal airline, KLM will not reach its 100th anniversary in 5 years and, just like the Belgian Sabena, will go bankrupt.
The main conclusion is that KLM's personnel costs and other 'overhead' costs are far too high compared to the competition. Flying personnel are tens of percent more expensive than personnel at companies such as Lufthansa and British Airways. The costs for a purser are 50 percent higher than those of other comparable airlines. For pilots, the costs are 15 percent higher. The big difference is not only in wage costs, but also in a larger number of days off.
Personnel costs hang like a millstone around the neck of the blue swan. The staff costs 2,8 billion euros per year. Competitors spend a lot less on personnel costs. The fact that staff at KLM is so expensive is mainly due to the gold-rimmed employment conditions. For example, ground staff are entitled to up to 100% more shift allowances than staff at competitors. KLM also criticizes the number of management layers. There are departments where there is a manager for every two or three employees.
Equity evaporates
What also does not help is that huge debts have already been made to keep their heads above water. The debt of Air France-KLM currently amounts to 4,5 billion euros. Equity has completely evaporated and dropped from plus 6 billion in 2011 to a debt of 600 million euros today. That is unrivaled in the aviation industry. As a result, Air France-KLM is now at the mercy of the banks.
Although KLM has plans to cut 700 million euros over the next five years, unions in EenVandaag wonder whether it is enough, and whether it will be achieved at all. They call on the KLM top to intervene faster and harder. According to an anonymous former KLM director, KLM's debt burden is a major problem.
Read the extensive and shocking file about KLM here: tomvanteinde.atavist.com/eenvandaag-klm
Video: 'KLM staff up to 50% too expensive'
Watch the broadcast here:
That raises a few questions:
– Does AirFrance have staff or lower wages and working conditions?
– Is that equity of KLM or also of their French partner, who has evaporated that EV?
– What is the net benefit of the employees in all countries, for example, are the taxes, pensions and various other premiums/costs much smaller there, so that the net result is comparable, but the gross Netherlands is simply very expensive? Or do they have a meager pension elsewhere?
– Why is it that in international comparisons ordinary staff are always too expensive and have to race to the bottom, less less less and the top of large companies always have to have more more more because otherwise the salary is not in line with the market internationally? Income inequality is on the rise!
Dear Rob,
The wage costs for Air France are even higher than for KLM. The captain of an Airbus A380 earns (well earns) the highest salary in the world, more than 35% than at Emirates.
The seats of the 22 heavily outdated Boeing 747 aircraft cost 23% more than with a new Airbus A380 or Boeing 777-300ER.
KLM has absolutely no money to replace those Boeing 747-400 aircraft.
The equity belongs to the combination company, so: Air France/KLM. So now negative, and it is waiting for a supplier to think that he has waited long enough for his money.
The net surplus, that is exactly the problem, the Netherlands and therefore actually Europe, is much too expensive compared to South-East Asia, for example.
And with airlines everything "runs" smoothly and can therefore also operate from South-East Asia. AirAsia has bought .55 brand new Airbus A330-300. With much cheaper crew, the difference in seat will be at least 40%, just compete against that.
On the other hand, Emirates wants to fly from Dubai with a stopover in Europe.
On the local “European” market, 4 low-cost airlines fly with lower costs.
Air France/KLM and Delta have a marketing and sales department at the Zuidas and in Enschede with more than 700 employees. All non productive staff. Those low-cost carriers don't have that.
Air France/KLM pays more than three zeros in millions to comparison / booking sites. EVA AIR does not participate in this and now Lufthansa also wants to stop doing so.
Could go on and on, but I'll be very sorry if they don't make it to 100 years.
The best is a technical bankruptcy like with Malysia airlines and then start all over again.
Greetings Nico
Thanks Nico, that the French are expensive, I do remember the trouble a few months ago with the strikes by Air France personnel and the threat that the French would take a hold of KLM's coffers (frugality would be punished). That in turn raises the question of what KLM should do with Air France, it sounds like they fit better with British Airways or Lufthansa…
I haven't flown KLM for years (I have Transavia, their daughter), but I would still think it would be a shame if KLM disappeared. We should not expect temporary support from the state, Fokker also failed them and that remains a shame.
I rarely or never fly with KLM myself, but I would regret it if our airline went bankrupt. When you are abroad and you see a blue KLM plane, you think: Hey, the Netherlands! I also have that with Phillips products.
More and more typical Dutch companies are disappearing and with it a bit of our culture. Or is this penchant for nostalgia no more than sentimental drivel?
Have you ever seen what businesses spring up around Eindhoven? You just don't know them. The old generation of companies just need to modernize. A KLM flight attendant still believes that she/he is entitled to a 4-day stopover. While the rest of the Netherlands will have long since returned home from the business trip for work and will start the next trip.
Sorry Matthijs, but that is not right at all. The number of layover days depends, among other things, on the flight duration, or the number of working hours, the minimum rest periods and the rotation or frequency of the aircraft on a particular route. If there are only 2 flights a week to Singapore, for example, you theoretically have a layover of three or four days. If that same plane continues to Jakarta, the crew residing in Singapore will make this shuttle. And just for your safety, a crew member should have a minimum amount of rest.
That's how it happened at my old employer Lufthansa, and I think it was no different at KLM.
Moderator: If you claim something, you have to come up with a source.
And just like with SABENA, we will be able to put that bankrupt on the account of the trade unions …….. The sky was the limit with regard to remuneration and “nice extras” that the trade unions demanded from the employer. Whoever burns his ass must sit on the blisters. There is not even money there at KLM to invest in modern aircraft, they still fly with jumbos that are 30 years old, what must it cost to keep those old rattles "flyworthy"??
I just flew back from Bangkok on a 777 named Kaziranga National Park. And it was brand new.
Dear Jorg,
Every aircraft that is now delivered is 100% leased and therefore not from KLM.
That will be fine. But the statement that they fly in thirty-year-old Boeings is not correct.
You are right Jörg, the oldest Boeing 747-400 is from 1989.
And the newest one, even if it is a lease, is less than two months old.
You can't blame everything on the unions. It's more the high-level management mistakes of the last 10-15 years, say. Not just on labor costs. Unfortunately, it is wrong on almost everything. I think the current CEO knows very well what is wrong. He shows more insight and guts than his predecessors. Hence letting this little secret 'leak' to the media. It will also be a matter of getting the customer back and getting them back into the blue swan. It will probably become smaller and provide fewer flights, something the big boss also hinted on aviation news. KLM will continue to make the news in the near future.
Whether KLM goes bankrupt remains to be seen, although I fear that we can expect little from the Dutch government (His Excellency Mr. Kamp).
It also appears once again that the (European) criticism of the “Arab 3” is mainly based on jealousy. They rake in the dollars there. Sir Tim Clark (Ceo Emirates) can be seen and heard regularly in the international media, but I don't even know if De Telegraaf knows who he is at all. I think it would be an interesting interview. His criticism is harsh and logical; American and European airlines mainly fly to “rich” countries and ignore emerging countries. KLM does fly to some destinations in Africa, but certainly not to the extent that, for example, Brussels Airlines does (Brussels Airlines is owned by Lufthansa, by the way). Since there is increasing competition on the lucrative routes such as New York and regionally in Europe, there is simply no money to be made there.
KLM needs to do at least 3 things to survive:
1. Getting wage costs in order
2. Restructure the organization
3. Create new markets and destinations. They are already doing that well with China and they need to expand that further in Southeast Asia and perhaps also South and Central America. Maybe Africa too.
I think the turnout could be very high if KLM were to do that. There is a broad group from various quarters who would like to talk about why KLM is and isn't KLM at customer level and how we can now continue towards 100. Well, in the way that was proposed yesterday on radio 1 by a trade unionist. All on Schiermonnikoog and the boat will not sail again until the business has been saved. Top business people in the Netherlands are already making plans for KLM if I can believe the stories in the media. Keep watching and shouting that will come tomorrow is certainly not celebrating the 100th anniversary. In the Netherlands we do not have rules that protect against going bankrupt like in America.
I will not shed a tear if KLM goes bankrupt.
It is high time that all those flying personnel with generous incomes and working conditions once again put their feet on the ground.
Let them work for a market-based salary for an airline where they are expected to give passengers the impression that they are happy that passengers want to fly with that airline, instead of living financially on the past glory of KLM and with walking around in an air as if the passengers should be thankful that KLM wants to transport them.
Would find it a great pity as I have always flown with KLM with great pleasure and full satisfaction. Always excellent service and lovely friendly flight attendants.
French, French, French, right,
KLM is a huge hydrocephalus and if that blows, everyone in the Netherlands will get splashed, so you too.
If the KLM “claps” Schiphol will go along (KLM is the largest customer) and many affiliated companies.
It is said that “Schiphol” is good for 300.000 jobs.
Add to that the more than 600.000 unemployed, and you are almost at one million. kLM are all expensive WWers,
Can they forget about that tax reduction in The Hague.
Well, I'm not so afraid of that. There are plenty of other airlines that want to take KLM's place but don't get a chance now.
And KLM a huge hydrocephalus? An inflated child's head.
A company like Ryan Air ordered 2013 new aircraft in 2014 and 280 together. That is more than twice the total KLM fleet in two years….
The WW and all benefits are linked to a maximum daily wage based on 8 hours per day
Your unemployment benefit is determined from this.
The maximum unemployment benefit that someone can receive is then approximately 1765 net per 20 working days (so 4 weeks)
This is 75% of the maximum daily wage (199,15 as of today) which serves as output = 2987 gross
Then after two months it goes to 70% = 2788 gross
So we don't have to worry immediately about them being overpaid
I think that Schiphol also survived without klm. I agree with Frans that KLM brought it on itself. I live and work at Schiphol. She is now breaking up that arrogance from the past. Accounts to KLM are outstanding for an average of 80 days, accounts to Air Berlin, Easyjet, Emirates, Qatar Airways and Etihad are outstanding for an average of 40 days. Easyjet would like to expand the Schiphol hub. Qatar requested additional locks which were rejected.
My last 4 trips to LOS. Were with Etihad 2x, EVA and Emirates. Etihad and Emirates are so far above it in terms of service and comfort, KLM, Eva and the major European airlines will never catch up.
If you cannot beat them, join them, I would like to say to KLM. Expands partnership with Etihad and abandons Air France. It could be the only lifeline.
Just very simple. In Europe, taxes on wages are too high. Everything has disappeared to low-wage countries and countries that have oil and subsidize airlines, such as in the Middle East and Asia and Turkey, you cannot compete with that. Politicians in Europe don't get it. They do not protect their own products and levy little or no import duties from eg China. So everything is going. And the gentlemen managers and directors. The biggest grabbers out there. Do not bind. It doesn't really matter if KLM goes bankrupt. Then they will find another company that will eventually go bankrupt
Moderator: Please do not chat
The Dutch pride well I can tell you the Dutch was sold a long time ago but the KLM only a few years ago to France. And to think that the same KLM almost merged with the even worse Alitalia. As an organization they are just too old-fashioned, too expensive, too big and cumbersome, not agile and if nothing changes then you will simply go bankrupt with state support or without looking at what is happening at Malaysia airlines.
And if you are no longer boss in your own house because of that nice deal with France, then things go wrong. Fortunately, a few people have become a lot richer from that deal a few years ago. Perhaps they can set up a fund for those KLM employees who will soon be out of work. Well, without work, for example, see Qatar airways recruiting staff almost daily, but if they just didn't get extra landing rights at Schiphol 😉
If you don't investigate what your competitors are doing and don't do anything about it, things will go wrong once in a while.
I almost always travel with KLM when possible, but lately I have been looking more at other airlines because KLM is pricing itself out of the market. I want to go to the Netherlands in August and I always fly business class for long stretches. If I now look at what KLM charges for a return ticket to Bangkok and Amsterdam, the price, for example with China airlines, is 800 euros cheaper than with KLM. Other airlines are also much cheaper than KLM. not .
If it were a little more expensive, I would continue to fly KLM, but this is just too much for the same product.
KLM compete better and you will see that more people will choose our KLM again
The strange thing is that they compete from Amsterdam to Bangkok, but not the other way around
KLM was so stubborn about the Swan Covenant, as a result of which the non-IATA travel agents lost their reward for selling KLM tickets and turned to advice to clients for another airline in large numbers. The fact that the other companies also did not receive a “reward” was no problem for those travel agents, the goal was achieved KLM sold fewer airline tickets and had a lower occupancy rate on their flights, adding to this the arrival of Easyjet and all other low-cost carriers and the arrogance of the KLM and the spade in front of the grave was firmly in the ground.
Now people hide behind the high personnel costs for a while and the "opposing" government is blamed.
The swan has been shortened and I now fly much more comfortably around the world with other airlines and I regularly sit in waiting lounges where the poor service, legroom of KLM is now increasingly widely reported, but no, KLM itself is not to blame…….it staff will eventually be presented with the bill. The times of Leo van Wijk will unfortunately never return.
Swan stick to will be bastardized until Swan you can go……
Yesterday I read on Thaiblog that Sabena is not comparable to KLM, and I already wanted to answer that KLM should not blow from a high tower! Sabena was bankrupted by Swissair, who then took over the customers, in turn they suffered the same fate. My neighbor worked at Sabena and he claimed that they could never go bankrupt, absolutely not, but three weeks later the time had come.
So KLM it's five to twelve?
There is such a thing as competition. It has only increased with the globalization of products
and there is enough choice to buy products or services at a favorable price. That's life. With the internet, people have enough opportunities to compare prices. Whether you fly with KLM or another airline, the price determines the purchase of your ticket I think every airline is equal to the other. I now always fly with Thai airways and certainly for the price I pay from Brussels to Bangkok I have between 700 and 800 euros in one go. If KLM disappears, there are enough others to to replace this society. The staff must adapt to the economic reality, but that is of course difficult.
@ Eddie,
There you have another striking example, the same thing KLM does, Thaiairways also does.
Namely from BRU to BKK they have a much more favorable price than vice versa.
Also fly with Thaiair, always from BKK to BRU and have no lower price than 43000thb
And also me. goes in the same direction as KLM, far too high prices with poorer service.
And it used to be so much better there.
A friend of mine recently started flying with KLM. She thinks it's fantastic and the selfies from airplanes are flying around my ears. I wholeheartedly give it to her. Yesterday a picture of her and another girl from business class on the way to Singapore. She thought she had to work but became non-working. Well, the business class was almost empty anyway.
Well, it can and can be a lot more sober in terms of terms of employment.
The KLM company deserves it after all those years of inappropriate arrogance, for all those employees on the floor and in the air it remains their job and I don't wish anyone to lose their job. For their sake, I hope that KLM survives.
Like Heineken, KLM is also part of the Netherlands, my homeland. Despite the fact that I don't like Heuneken and the KLM company is not allowed….
KLM has been wearing WAY too big pants for years.
Doesn't look nice,........and doesn't sit well.
And just keep walking with excessive arrogance.
SEE the result here.
But is tip of the iceberg. Gets much worse there.
Advice?
Just do it, with attention to PEOPLE, not just systems.
But be professional at the same time. With a normal salary.
By the time KLM, trade unions and employee participation council have figured out what needs to be done – which most people already know – they are bankrupt. KLM will never be able to compete because the costs are simply too high. Nobody wants to hand in (just look at V&D) so KLM will slowly go to rounding.
The next setback for KLM has already arrived: The Central Appeals Board has determined that police officers are also entitled to irregular hours allowance (sic!) during their vacation. Thanks to the National Police Bond, which says that this also applies to other professional groups such as airline pilots.
Well, that's not how you help the country move forward in the momentum of the nations.
http://www.telegraaf.nl/binnenland/24146461/__Ook_op_vakantie_toeslag_voor_agent__.html