Dutch airline KLM has reached agreement with its pilots on new pay and conditions after nearly a year of negotiations.

The three-year agreement is back-dated to January 1 2015.

The most important point is that pilots union VNV has agreed to forego any pay increase over the three years of the agreement, giving KLM an annual saving of €100m, the NRC reports.

Agreement has also been reached on more flying hours and a rise in the pension age from 56 to 58 years.

KLM has been calling on pilots for nearly a year to make a contribution to the necessary savings the company needs to make.

The combined airline Air France-KLM managed to bring down its losses sharply in 2014 despite a pilots’ strike, making a loss of €198m compared with a €1.8bn loss in 2013.

Costs

The company wants to reduce costs by 1.5% between now and 2017 and is looking for 800 voluntary redundancies from Air France staff.

At the same time, the airline is scaling back its investment plans by €600m over the next two years because of economic uncertainty and European overcapacity.

Last week, KLM said it would be reducing the number of its flights this winter because a pay and conditions agreement with pilots had not been reached.