KLM blue no longer shines as it used to. What is going wrong at the airline?

KLM is undergoing a significant reorganization, resulting in the loss of 5,000 jobs, as it faces rising costs and operational challenges. Once the most profitable part of Air France-KLM, KLM's margins have declined, prompting the need for drastic measures. The airline aims to improve its annual results by 1 billion euros by increasing productivity while reducing staff. Despite reporting a strong third quarter, KLM's leadership acknowledges that more is needed to remain competitive. High labor costs, exacerbated by inflation and a shortage of skilled workers, are major concerns. KLM plans to negotiate new labor agreements to ensure future sustainability and aims for an operational margin of at least 8% by 2028, which remains a challenge given current performance levels.