Coronavirus: Commission proposes €6.8 million in total to support 1,700 dismissed workers of air carriers KLM and Finnair

This article is brought to you in association with the European Commission.

Today, the European Commission proposes to support 1,200 former workers of KLM in the Netherlands and 500 former workers of Finnair in Finland, who lost their jobs due to the impact of the COVID-19 crisis on passenger air transport. The proposed total of €6.8 million from the European Globalisation Adjustment Fund (EGF) will help them find new jobs through further education or training or support them to start their own business.

Commissioner for Jobs and Social Rights, Nicolas Schmit, said: “As a consequence of the COVID-19 pandemic, the number of passenger flights worldwide dropped dramatically. With a total of €6.8 million of financial support from the EGF proposed today, we show solidarity to 1,700 former workers of KLM and Finnair in the air transport sector. This support will help these people to retrain and find new jobs.”

The COVID-19 pandemic has had a significant impact on the aviation industry due to travel restrictions and a dramatic decline in passenger air transport. The Netherlands and Finland applied for EGF support separately to help dismissed KLM and Finnair workers.

The measures co-financed by the EGF range from job-searching advice and vocational orientation, to training, hiring benefits and support to start a business. Participants may receive additional incentives, such as allowances for travel, accommodation and moving house to cover related expenditure incurred during job-seeking or training.

In the case of former workers of Finnair in Finland, the total estimated cost of the support measures is €2.9 million, of which the EGF will provide €1.8 million. In the case of former workers of KLM in the Netherlands, the total estimated cost of the support measures is €8.4 million, of which the EGF will provide €5 million. The remaining amounts will be financed in the case of dismissed workers of KLM by the company, and in the case of dismissed workers of Finnair by Finnish authorities.*

The Commission’s proposals will need to be approved by the European Parliament and the Council.

Background

According to the International Air Transport Association (IATA), international passenger demand fell by 75.6% in 2020 compared to 2019. This development massively reduced the revenues of airlines and forced many to lay off employees or declare insolvency.

In 2020, Finnair’s revenues fell by 73.2% to €829.2 million, and KLM’s revenues fell by 53.8% to €5,120 million, compared to 2019. In order to reduce costs, both airlines implemented restructuring plans, leading to the dismissal of workers. The Netherlands and Finland applied for EGF support to help  former workers of KLM and Finnair. 1,201 of the former workers of KLM and 500 of the former workers of Finnair are expected to participate in the support measures to find new work.

Since 2007, the European Globalisation Adjustment Fund has been providing support to people losing their jobs or the self-employed whose activities have ceased. Under the 2014-2020 Regulation, the EGF can fund support measures when the dismissals are a result of major structural changes in world trade patterns due to globalisation, e.g. when a large company shuts down or production is moved outside the EU, or a global economic crisis.

So far, the Fund has received 169 applications. Some €656 million have been requested to offer support to more than 161,000 workers and more than 4,400 young people not in employment, education or training in 21 Member States. Measures supported by the EGF complement national active labour market measures.

In 2021-2027, the EGF will continue to show solidarity and support workers and the self-employed whose activity has ceased, while shifting the focus from the cause of restructuring to its impact. Under the new rules, all reasons for restructuring, including the economic effects of the coronavirus crisis, as well as larger economic trends like decarbonisation and automation, can be eligible for support. The new EGF Regulation entered into force on 3 May 2021.