Airline KLM is violating the conditions attached to the state aid it received in corona time, but not everything is ‘doom and gloom’, says the state agent who supervises.
Just when the cabinet wants to buy new KLM shares, the regulator comes with strong criticism. According to ‘state agent’ Jeroen Kremers, the airline does not comply with the conditions that the government attached to the state aid that the company received in the corona crisis.
Kremers was appointed as a ‘state agent’ as an independent regulator for the government in 2020 when the cabinet invested 3.4 billion in KLM. He reports that the promise to structurally reduce costs by 15 percent is not being fulfilled. In fact, more has been spent in recent months: two weeks ago a 5 percent wage increase was announced for employees.
Kremers just said in a conversation in the House of Representatives: “They will have to work.”
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The criticism comes at a spicy time. Last week, the cabinet decided to buy shares of Air France-KLM for another 220 million euros. It was necessary, says Minister Sigrid Kaag (Finance), because the airline is going to issue new shares to raise EUR 2.25 billion. A new investment is therefore required to maintain the government’s position.
Criticism
The Netherlands has a 9.3 percent interest in the airline and 14 percent of the voting rights. France has a 28.6 percent stake. If the Netherlands did not buy the new shares, the stake would further shrink to only 2 percent.
That plan is not without criticism. The shares that then minister Wopke Hoekstra bought for 744 million euros are currently only worth 200 million euros. The skepticism is therefore also echoed in parliament. Although, with support from JA21, there seems to be a large majority in favor of the plan, which is necessary for the purchase.
But the fact that Kremers is now criticizing KLM because the airline does not adhere to the conditions of the support, arouses resentment. “I am shocked by this,” says Eelco Heinen (VVD). “You don’t beat around the bush,” said Henk Nijboer (PvdA). “So there is still a lot of work to be done.” Heinen wanted to know what ‘we are going to do now’. “What can we do?”
Kremers said that ‘not everything goes wrong’. “A lot has already been done. It’s not all doom and gloom. But I put the spotlight on what isn’t going well.”
Contract
Kremers states that KLM still has a lot of work to do this year to meet the conditions. He states that it is up to the minister to intervene if the agreements are violated. Kremers did not specify what resources the minister has. ,,But there is a contract. You first talk to each other, and if that doesn’t work, there are steps in the contract. But you have to ask the contracting parties that.”
This afternoon the House of Representatives will debate with Minister Kaag about the plan to buy more KLM shares.
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