Air France KLM reaches pensions deal with KLM staff

Air France KLM has struck a deal with its KLM pilot and cabin staff unions to resolve a dispute over pensions, the airline said on Monday, adding it would take a charge of E311m in Q3 as a result. It will change to a defined contribution scheme from a final salary pension scheme and KLM will make a one-off lump sum payment of E194m to the pension fund, Air France KLM said. KLM pilots threatened legal action in 2016 if their demands for pension rises were not met. The changes follow similar moves by other airlines, for whom pension scheme arrangements have been a source of tension with employees. Lufthansa and its main pilots union signed a wide-ranging agreement on pay, pensions and conditions this month. In September BA proposed the closure of a large pension scheme, angering trade unions representing workers who have taken industrial action this year in a continuing pay dispute. “Crucially, this removes AF-KLM’s exposure to future deficit payments for these schemes,” analysts at brokerage Liberum wrote, although they kept a “sell” rating on Air France KLM shares.<br/>