KLM announces “drastic” austerity measures in response to the economic impact of the new coronavirus. That is stated in a letter from financial director Erik Swelheim to the management of the airline.
Thus, additional investments are postponed for the time being. For example, IT projects that have not yet started will not start for the time being. Restrictions are also imposed when recruiting staff.
There is a temporary type of vacancy stop for some departments. Employees are also requested to make vacation days where possible.
A KLM spokeswoman emphasizes that these are “precautionary measures,” which, according to the airline, are part of “healthy business operations”.
Tens of thousands of people work at the airline, and the company actually planned to invest heavily this year. KLM had previously stopped training for new cabin crew among other things.
At the recent presentation of the annual figures, parent company Air France-KLM said that the virus outbreak would probably cause the company a significant expense. Swelheim now states in his letter that there is a “serious risk” that the profit margin will come under further pressure this year.
He points out, among other things, the further spread of the virus in Europe. The impact on KLM’s revenue can be “very significant”, says Swelheim. This will probably only be partially offset by, for example, lower fuel prices.
Several airlines have indicated that they will get into further trouble due to the virus outbreak. The German company Lufthansa also announced a package of measures to limit the damage as much as possible. In particular, personnel costs are saved. There are also reasons for concern at the Scandinavian company SAS, the figures for the first quarter showed.