KLM has announced a restructuring programme targeting an additional €1 billion in annual earnings improvements, with changes to its European fleet, ground handling operations and staffing.
The airline says the measures will bring its total annual earnings improvement target to €1.4 billion, helping fund investment in aircraft, customer service and employees. The number of positions within KLM is expected to fall by almost another 15%, although a substantial share of the changes involves transferring work to external providers or other Air France-KLM businesses.
KLM intends to maintain its focus on a network of 160 destinations served nonstop from Amsterdam Schiphol.
“KLM’s future is not guaranteed,” said Marjan Rintel, President and CEO of KLM, citing global instability, high fuel prices and mounting pressure on aviation.
“That’s why, at this pivotal moment for KLM, we’re taking far-reaching, sometimes painful measures. Every department and every division will be asked to contribute.”
Smaller aircraft to take a greater role in Europe
A central part of the plan is a change in the balance between larger and smaller aircraft across KLM’s European network.
The Airbus A321neo will remain in the fleet, while Embraer E195-E2 aircraft will replace planned A320s. KLM says the greater use of smaller aircraft will help it match capacity more closely to demand, giving regional subsidiary KLM Cityhopper a larger role.
Boeing 737 and Embraer E190 aircraft will be phased out over the coming years. Across its operations, KLM plans a simplified fleet of 185 Airbus, Boeing and Embraer aircraft.
Capacity will be directed towards routes that contribute most to connections through Schiphol and the airline’s nonstop network, as KLM seeks to restore profitability in its European operations.
Ground handling and support activities to change
KLM plans to transfer selected ground handling activities to specialist external providers, including below-the-wing operations at KLM Cityhopper and baggage handling in Schiphol’s East Hall.
Passenger-facing teams will make greater use of digital tools for check-in, boarding and rebooking, with terminal employees focusing more on hospitality and direct assistance.
Cargo handling will be consolidated in KLM’s own Schiphol warehouse, covering freight transported on both passenger aircraft and freighters. The airline intends to accommodate higher volumes through automation, simpler processes and more flexible deployment of employees.
Engineering & Maintenance will increasingly concentrate on aircraft types forming the future fleet. KLM also intends to bring the management of its engine and component services into closer alignment with Air France-KLM.
Around 5,000 positions affected by reorganisation
KLM says approximately 5,000 positions have been or will be reorganised, with work transferred or performed differently.
This includes around 1,250 positions at KLM Catering Services, where work has been carried out with gategroup since the spring, and an estimated 800 Ground Services positions whose activities are expected to move to external providers.
A further 2,000 positions, including 1,500 at customer contact centre Cygnific, will transfer to Air France-KLM. Planned productivity improvements are expected to result in approximately 1,000 fewer positions at KLM.
The airline expects to limit the impact on employees through natural attrition, voluntary arrangements and transfers to other roles.
KLM is also seeking a structural productivity increase of at least 8% by 2028, combined with what it describes as very moderate wage growth. It intends to negotiate new collective labour agreements with unions.
Investment in passenger experience remains part of the plan
Alongside the restructuring, KLM plans to continue investing in cabin comfort, onboard service, free high-speed Wi-Fi on intercontinental flights and a broader meal selection on European routes.
Digitalisation and artificial intelligence will also support changes to booking and internal working processes.
“We need to strengthen our financial foundation to make KLM more resilient in the face of uncertainty and better prepared for the future,” said Bas Brouns, KLM’s Chief Financial Officer.
“We need a KLM that can invest in a new generation of aircraft, better customer service, and our people.”
