The Dutch government is pausing its rescue package, worth the equivalent of 35 billion kronor, for the pressured airline KLM, Reuters reports.

The reason is that the pilot union has not agreed to the demands for frozen salaries until 2025. 

KLM, the Dutch arm of Air France-KLM, has been promised a rescue package worth 3.4 billion euros, around 35 billion kronor, to get through the corona crisis. Of that amount, 1 billion euros is a direct loan from the Dutch government. 

But now further payments from the crisis package are being stopped.    

”It is disappointing, but we cannot proceed with the loans now,” said Dutch Finance Minister Wopke Hoestra on Saturday evening.

His announcement comes shortly after KLM's pilot union refused to agree to freeze their salaries until 2025 - which the government demanded - citing that they had already accepted to go without salary increases until March 2022.

However, the unions for ground and cabin crew have agreed to the government's conditions for the rescue package with frozen salaries for five years.

On Friday, Air France-KLM reported an expected loss for the third quarter. Operating profit amounted to minus 1,046 million euros, compared with a plus of 909 million euros in the same period last year. Turnover, in turn, fell by 67 percent to 2,524 million euros.

Since the turn of the year, Air France-KLM has fallen 72 percent on the Paris Stock Exchange. 

Source:di.se