Dutch flag carrier KLM has announced a major restructuring programme that includes reducing the number of positions by nearly 15%, transferring parts of its operations to external service providers, and making significant changes to its fleet renewal strategy. One of the most notable decisions is to abandon plans to introduce the Airbus A320neo, opting instead for the smaller Embraer E195-E2 on its European network. The restructuring aims to improve annual earnings by an additional €1 billion and strengthen the airline’s long-term competitiveness.

Under the announced plan, approximately 5,000 positions will be affected by the restructuring. However, these changes do not exclusively involve redundancies, as a substantial proportion of positions and activities will be transferred to other companies. Around 1,250 positions at KLM Catering Services have already been affected by a partnership with gategroup, while activities associated with another 800 positions in Ground Services will gradually be outsourced. A further 2,000 positions will be transferred to the Air France-KLM Group, including approximately 1,500 at the Cygnific customer contact centre.

In addition to these measures, KLM plans to eliminate approximately 1,000 more positions through productivity and operational efficiency improvements. The airline intends to limit the impact on employees through natural attrition, voluntary arrangements, and transfers to other roles. At the same time, it will negotiate new collective labour agreements with unions, aiming to achieve a structural productivity increase of at least 8% by 2028 while maintaining very moderate wage growth.

KLM President and CEO Marjan Rintel warned that previous cost-saving measures and operational improvements have not been sufficient to secure the airline’s long-term stability. She stressed that rising costs, high fuel prices, and uncertainty in the international aviation market require difficult decisions that will have significant consequences for the organisation and its employees. Management has also not ruled out further changes to staffing levels, working conditions, and the company’s organisational structure.

The organisational restructuring is accompanied by a revision of KLM’s narrowbody fleet renewal strategy. The airline has decided to abandon its earlier plans to introduce the Airbus A320neo and will instead rely on the Embraer E195-E2 operated by its regional subsidiary, KLM Cityhopper. The larger Airbus A321neo will remain a key part of the airline’s European fleet modernisation, while the Boeing 737 and Embraer E190 will gradually be phased out over the coming years.

The decision represents a significant departure from plans announced in late 2021, when the Air France-KLM Group placed an order for 100 Airbus A320neo family aircraft, with purchase rights for another 60. The order was intended to renew the fleets of KLM and Transavia in the Netherlands and France. KLM introduced its first Airbus A321neo aircraft into commercial service in 2024, but has now decided against introducing the smaller member of the same aircraft family. The airline has not yet disclosed how this change will affect the allocation of previously ordered aircraft within the group.

An expanded role for KLM Cityhopper is expected to allow the airline to better match capacity with demand across individual European routes. By operating smaller aircraft, KLM aims to reduce costs on routes where larger capacity is not economically justified. Available capacity will also be directed towards services that contribute most to Amsterdam’s connectivity with the rest of the world. KLM expects this strategy to help restore profitability across its European network, which has faced sustained cost pressures and intense competition.

The restructuring will also affect several other areas of the business. Some aircraft ground handling and baggage handling activities at Schiphol will be outsourced to external partners, while KLM Cargo will consolidate cargo handling operations in its own warehouse. In Engineering & Maintenance, the focus will increasingly shift towards aircraft types that will remain in the fleet, with maintenance activities involving retiring aircraft gradually reduced. The company also plans to expand automation and digitalisation while further consolidating selected business functions within the Air France-KLM Group.

The announced measures come despite an improvement in the airline’s financial performance. KLM recorded an adjusted operating profit of €458 million in the third quarter of 2026, representing an increase of €106 million compared with the same period a year earlier. Operating profit for the first nine months reached €526 million. Nevertheless, management believes that current profitability remains insufficient to finance the necessary investments in fleet renewal, employees, and service quality.

KLM is therefore targeting an additional €1 billion in annual earnings improvements, bringing the planned total annual improvement to approximately €1.4 billion. Despite the extensive cost-cutting measures, the airline intends to continue investing in fleet modernisation, passenger experience improvements, and the development of its network, which currently includes approximately 160 nonstop destinations from Amsterdam.

Rintel acknowledged that the decisions are difficult, particularly for employees whose roles have been part of KLM’s operations for decades, but argued that failing to act would ultimately have even more serious long-term consequences. Management will closely monitor the implementation of the restructuring over the coming years and has left open the possibility of additional measures if the planned cost reductions and productivity improvements fail to deliver the expected results.