KLM restructure targets three key areas

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KLM will contribute €700-800 million ($873-999 million) to Air France-KLM's bid to reduce €2 billion from its net debt of around €6.5 billion over three years, says its chief executive Peter Hartman.

KLM's role in the group's Transform 2015 plan will centre on improving ancillary revenues, labour related measures and reducing external costs. He says that the restructuring will not see the airline shrink in size, but will mean "extremely limited growth, almost stable over the next three years".

By reducing levels of "indirect staff" such as human resources and accountants by 10%, Hartman says he intends to avoid making other redundancies. He says the SkyTeam carrier employs a number of agency workers whose duties could be performed by permanent staff, so "in two to three years time we could reduce [staffing levels by] 3,000 people if necessary".

Explaining that KLM's pilots have assisted with groundwork and worked at other airlines he says: "People were willing and prepared to do that and I hope they will do the same. In return we will absolutely focus on the objective to keep the family together."

Since 2008 Hartman says the airline has enjoyed "a very open dialogue with our staff councils and unions about how to prepare ourselves for the future". As a result he says it has not needed to make involuntary redundancies, but adds: "I would like to have more value for the money". He says changes to KLM's working practices could include adjustments to the working times of flight crews to enable better use of its fleet. Through labour related measures Hartman says it hopes to make as much as €350 million of efficiency savings.

KLM is also looking to phase out its fleet of 10 McDonnell-Douglas MD-11s earlier than anticipated according to Hartman, replacing them with "a smaller number of modern aircraft". Indicating other areas in which the carrier is looking to make savings, he says: "If you skip one-long haul aircraft type, that immediately brings you lots of synergies, because operating one type less is saving lots of money improving productivity in the area of pilots cabin staff engineers etc."