Dutch Government Demanding Wage Repayments from KLM

Photo Credit: Arash Abed/AviationSource

LONDON – The Dutch Government has demanded some form of wage repayment from KLM, with the airline receiving more than 344 million EUR worth of compensation so far.

Under the UWV scheme, over 39,000 companies in the Netherlands have benefitted from this, at a total value of 1.4bn EUR.

Of the 344 million EUR that KLM has received, another six million will be sent to budget carrier Transavia as well.

Repayments Should Be On The Way Soon…

The Dutch Government shouldn’t really have to wait much longer, as the Air France-KLM group announced earlier this month that they had repaid 1bn EUR of their 3.5bn government-backed loan early.

The early repayments have been achievable thanks to a strong nine-month performance by the carrier this year.

This amount includes €800 million for the settlement of the tranche maturing on May 6th, 2023, and €200 million for the tranche maturing on May 6th, 2024.

In December 2021, Air France-KLM made an early repayment of €500 million out of the initial outstanding €4 billion. With this additional early repayment of €1 billion, the total outstanding amount of the PGE is reduced to €2.5 billion euros, with the following repayment profile:

  • May 2024: partial redemption of €1.15 billion, leaving an outstanding amount of €1.35 billion,
  • May 2025: final repayment of €1.35 billion (no further outstanding amount thereafter).

Early Repayments Enable Doubled Down Investment on Sustainability…

The early repayments have enabled Air France-KLM to double down in its sustainability push.

Air France-KLM has doubled down on its sustainable aviation fuel (SAF) pledge as it purchases 1.6 million tons from Neste and DG Fuels.

The two binding multi-year contracts are going to help the airline incorporate at least 10% SAF on all of its flights by the end of this decade.

The first deliveries of the fuel are expected to take place next year.

As a breakdown, Neste will supply one million tons between 2023-2030, with DG Fuels supplying 600,000 tons between 2027-2036.

Benjamin Smith, the CEO of Air France-KLM, commented on this significant order of SAF:

“Decarbonisation is the biggest challenge the aviation industry has ever faced. Air France-KLM is activating all available levers to reduce its environmental impact: fleet renewal, eco-piloting, and the increased use of certified Sustainable Aviation Fuels”,

“The contracts we have signed embody our long-term commitment to the development of SAF production capabilities around the world to the benefit of the industry as a whole.”

“We look forward to working with Neste and DG Fuels, with whom we have established solid partnerships which will pave the way to the creation of a global network of providers capable of meeting our future needs.”

Air France-KLM has noted that the purchase of this fuel will avoid around 4.7 million tons of CO2 emissions compared to fossil fuels.

On top of that, the group has said that their sourcing policy for SAF is based around fuels that do not compete with human food or animal feed supply, that are RSB, or ISCC+ certified for their sustainability, as well as not derived from palm oil.

The Air France-KLM Group has been investing in the testing and use of sustainable aviation fuel for more than 15 years.

In 2011, KLM conducted the world’s first commercial flight partially fuelled with SAF, while Air France launched the ‘Lab-Line for the Future’ in 2014, a two-year experiment during which 78 flights between Paris-Orly and Toulouse and between Paris-Orly and Nice were partially fuelled with sustainable aviation fuel.

Air France-KLM also supports the development of a production chain in France and the Netherlands. In 2020, Air France worked together with Airbus, Safran, Suez, and Total to promote the growth of the SAF production chain in France.

The following year, Air France operated its first long-haul flight fuelled by SAF produced entirely in France, while KLM operated the world’s first commercial flight with synthetic fuel produced in the Netherlands.

In June this year, several SAF-powered flights were operated by all of the Group’s airlines as part of the ‘Connecting Europe Days’ organized by the European Commission.

Overall, this is a major commitment and will no doubt set the standards to be set for sustainable travel, especially with the industry looking ahead to becoming net-zero by 2050.

As deliveries commence, this will no doubt increase the portfolio from the likes of Neste and DG Fuels, as they will be wanting to secure more business of this type.

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