Dutch government halts KLM bailout amid standoff over terms

government of Nerlands will halt its multibillion euro coronavirus bailout to national carrier KLM amid a standoff with a pilot's union about terms of rescue pack, Dutch finance minister said Saturday.

dispute, if t resolved, could have dire consequences for KLM, which employs some 30,000 people. company anunced Friday that it recorded a loss of 234 million euros ($273 million) in third quarter as a result of aviation slump caused by coronavirus pandemic.

“Without this loan, KLM will t get through this difficult time,” CEO Pieter Elbers said in a statement. “This makes this impasse extremely worrying.”

government threw KLM a 3.4 billion-euro ($3.96 billion) lifeline in June to help airline survive sharp downturn in air travel amid pandemic. pack is me up of a 1 billion-euro loan and 2.4 billion euros in guarantees for bank loans.

But re were strings attached, including a demand that KLM cut costs by 15%, and improve airline’s sustainability.

In a letter to Parliament, Finance Minister Wopke Hoekstra said: "It is up to KLM and unions to ensure that conditions set are still met.”

KLM submitted a restructuring plan to Dutch government on Oct. 1 in which labor unions representing pilots, cabin crew and ground staff agreed to pay cuts. However, agreements only apply until 2022; Hoekstra is seeking assurances from KLM that unions will agree to pay cuts throughout duration of bailout, likely five years.

KLM said five labor unions agreed to sign a “commitment clause” saying ir members would agree to pay cuts for full duration. It said one of unions representing cabin and ground staff was still considering matter, while pilot's union did t sign.

Hoekstra called pilots stance “very disappointing and risky.”

pilot's union said its members alrey have agreed to a 20% pay cut and that y are committed to “continue taking responsibility to get KLM through crisis and make it a healthy company again.”

It said KLM sought extra commitment at last minute and it “was t achievable in this timeframe.”