Dutch Government's KLM Support Package Under Scrutiny

A Dutch government review of the COVID-19 support package for airline KLM identified flaws, notably a reduced risk for banks. While successful in keeping KLM afloat, the report criticized insufficient adherence mechanisms and abandoned cost-cutting plans. KLM supported the report's findings, noting a swift loan repayment.

A review commissioned by the Dutch government has criticized the support package given to airline KLM during the COVID-19 pandemic. The review found that while the package helped keep the airline operational, it was flawed due to reduced risk for banks involved.

The report, conducted by Ernst & Young, also highlighted the lack of an effective mechanism for enforcing package conditions. While KLM received 3.4 billion euros in loan guarantees, the government furlough scheme proved more financially significant. Cost-cutting commitments were dropped post-2022, with financiers and shareholders largely unaffected.

KLM acknowledged the report's conclusions, emphasizing the overall effectiveness of the state aid. The company repaid the loan faster than expected, including an 80 million euro interest payment in June 2022.

(With inputs from agencies.)