VLZ WITHDRAWS FROM COVENANT WITH KLM THE NETHERLANDS

KLM The Netherlands (KLM) and VLZ, the Dutch association representing air travel and corporate travel agents, reached agreement in December 2000 on introducing a new remuneration structure. The agreement, known as the Swan Covenant, was to be implemented on January 1, 2002.

In a letter dated August 2, 2001, VLZ withdrew its support for the agreement and indicated that the association wished to reopen talks on the issue.

On Monday, August 27, 2001, the full VLZ Executive Committee and the KLM The Netherlands executive met for further talks. At the meeting, seven months after the covenant had been agreed, VLZ tabled four demands, requiring KLM’s unconditional assent to all four.

KLM could not assent unconditionally to these demands, and VLZ did not wish to negotiate the openings offered by KLM. To KLM’s great disappointment, VLZ consequently withdrew its support for the covenant. KLM had brought the parties around the table last year with the intention of negotiating a new structure in joint consultations, and was under the impression that this goal had been achieved in December 2000.

This represents a substantial disillusionment for KLM, as the company considers that VLZ has withdrawn its support on improper grounds.

KLM now has no other choice than to proceed with implementing the new remuneration structure and will negotiate further with each party individually.