Airline KLM is to make savings totalling €700m over the next five years, chief executive Pieter Elbers said on Thursday.

The cost cutting is necessary to pay for investments such as new aircraft, Elbers, who took over as CEO a month ago, said.

Speaking after a string of meetings with staff, Elbers did not rule out compulsory redundancies, the Financieele Dagblad reported.

‘Caution is more important than speed,’ Elbers said. ‘And if jobs are concerned, we will deal with this in a careful way.’

The airline has, however, stopped employing new cabin crew in the Netherlands and Asia. Jobs will also go in the maintenance division, the FD said.

Staff will have to work more efficiently to increase profitability and the company is bringing in a productivity target of 4%. ‘This means we all have to work 4% harder,’ Elbers said.

Talks with the unions on next year’s pay deal are due to start soon.