KLM has again not kept to the government’s conditions for receiving state support during the coronavirus pandemic, according to the regulator appointed to monitor compliance.

The airline was given a total of €3.4 billion during the crisis, the biggest support package of any Dutch company. In return, the airline was ordered to cut costs by 15%, and meet other conditions on spending.

Regulator Jeroen Kremers says in his fifth report for the finance ministry that the airline has done too little to cut costs. And while low-paid staff and the board did agree to salary cuts, the contribution made by senior personnel was “well below” what had been required.

In addition, he said, last year staff were given a profit share payout and the airline continued to facilitate tax avoidance measures for air crew.

KLM’s capital position, said Kremers, is so weak that “the aid operation has not produced a company that can be trusted to stand on its own feet in the face of new setbacks.”At the same time, the “authority of the government has been damaged,” he said.

KLM said in a reaction that it considered the criticism to be wrong and that the airline had generated the necessary 15% cuts over the past three years. The company paid back the last of the loan last month. The unions too have criticised the report.

Finance minister Sigrid Kaag said that there would be a new investigation into how far KLM had actually met the conditions of the loan, and that would form the basis of the government’s decision about any further measures.

The Dutch government has a stake of 9.3% in Air France-KLM.