KLM will ground all Boeing 747s immediately


Due to the impact of the new corona virus, KLM airline company keeps all Boeing 747 aircraft grounded. The sister jets Air France no longer fly the superjumbos of aircraft maker Airbus, the A380. The measures are needed to mitigate the financial impact of the virus. The large aircrafts are usually expensive to operate.

Parent company Air France-KLM expects in the coming months a capacity that is 70 to 90 percent lower than normal. The company has taken a number of additional measures that should generate savings of up to € 200 million this year. Initially, a revision of the investment plan has resulted in savings of up to EUR 350 million. According to the company, the cost savings and other measures plus the less expenditure on fuel, among other things, offset about half of the drop in turnover.

Air France and KLM are discussing measures to be taken with their works councils. Last week, the group already concluded a revolving credit facility for a total amount of 1.1 billion euros. In total, the company has access to more than 6 billion euros in cash.

KLM is forced to cancel many of its flights due to the corona problems. Furthermore, trade unions are currently discussing the postponement of payment of the profit-sharing for last year. The Boeing 747s would already be accelerated from the fleet. Up to 2000 jobs will also be cut and working hours will be requested for KLM employees.

In an internal video message, Air France-KLM boss Ben Smith announced that he would cut his salary by a quarter. He has asked France and the Netherlands for support, among other things.

By: Lesley Woutersen

Lesley Woutersen, one of the co-founders of the EconomicInform gives away all of his free time to the project. He is interested in stock exchange and digital assets. Lesley can be reached by lesley.woutersen@economicinform.com.

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