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KLM cuts thousands of jobs
1 April 2003
AMSTERDAM — Dutch flag carrier KLM announced on Tuesday that it is to cut thousands of jobs to try and weather the current downturn in the airline industry that has been exacerbated by the war in Iraq and the SARS virus outbreak.

KLM did not give any figure for the number of planned job losses or say which divisions would face the deepest cuts. But it did warn that some cuts might have to be achieved by compulsory layoffs.

This is the second piece of bad news for the Dutch airline sector. On Monday, Amsterdam Schiphol airport warned that it was halting investment and stopping hiring personnel due to the fall off in passengers.

There was been a 60 percent drop in passengers from the Middle East because of the war in Iraq and the SARS virus in Asia.

Now, KLM said it has put together a package of measures in order to survive the malaise. The firm said it would take several weeks before it would be able to say how the measures would impact the staff.

But the company said that from Tuesday temporary work contracts would not be extended and no new staff would be hired. It is also stopped contracting out services.

Hopes that the EU would provide compensation for struggling airlines were dashed on Tuesday as the BBC reported Brussels is only prepared to offer limited help to cope with the drop in business caused by the war.

The British broadcaster reported that transport ministers meeting in Brussels said they would not hand out cash to an industry that was already struggling.

EU governments said they would give compensation if routes were cut because of airspace closures, help with extra security measures and consider stepping in if the insurance market withdrew cover.

"Our message is that we will not open the door to subsidies, that's quite clear," Greek Transport Minister Christos Verelis told reporters.

[Copyright Expatica News 2003]
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