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Covid-19 has had a major impact on businesses worldwide, reducing benefits and payments for millions of employees.
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Choose a business you would like to discuss.
Due to COVID-19, how do you think they have had to change their Planning Strategies
(Strategic, Tactical, Operating)?
This should build on the discussion we had in Week 2.
IMPORTANT: Please build upon my response to the week 2 discussion:
COVID-19 has had a major impact on businesses worldwide, reducing benefits and payments for millions of employees. For this discussion, I have chosen to focus on the airline business, specifically KLM Royal Dutch Airlines. KLM is owned by Air France and had annual revenue of approximately 27 million dollars in 2019 before COVID-19 struck. These numbers have decreased drastically during the pandemic, due to closed borders, travel restrictions, and social distancing, resulting in a loss of 880 million dollars during the two first weeks of the pandemic according to France 24 (Covid-19: Air France-KLM reports €815 million first-quarter operating loss, 2022).
Along with many other airlines, KLM was forced to take action and make numerous adjustments to the company considering the circumstances, such as seeking government loans. One of the COVID-19 consequences resulted in exiting five thousand positions, leaving thousands of people unemployed during difficult times. The management decided to slowly decrease network size throughout the first four months of the pandemic, which is another factor that heavily impacted their revenue. Considering that customer behavior has changed due to the situation, KLM does not expect to recover from the financial damages until earliest 2024, four years after COVID-19 first struck.
Pieter Elbers, CEO and KLM President-director states the necessary adjustments taken such as the loss of thousands of KLM’s employees have been difficult to proceed with. He mentioned their achievements together during the years along with the difficulty of letting hardworking and professional employees go, due to the reconstruction of the airline (“KLM Adapts Organisation Further Due To COVID-19 Crisis”). Although KLM had to make huge changes to their company and employment, the financial loan from the government saved the airline from going bankrupt unlike many other businesses during and after the pandemic.