Airline SAS says survival is at stake as pilots assault flights

  • Reduce airline flights by about half
  • SAS says it will affect about 30,000 passengers per day
  • Strikes increase uncertainty about loss-making airline’s future
  • Biggest airline strike since pilot BA in 2019

STOCKHOLM, July 4 (Reuters) – Salary talks between Scandinavian airline SAS (SAS.ST) and its pilots crashed on Monday, triggering an attack that puts the carrier’s future at risk and adds to the chaos of cruises across Europe as the peak summer holidays begin. .

The action is the first major airline strike to come as the industry is looking to capitalize on the first full recovery of leisure travel from the pandemic.

It comes after months of acrimony between staff and management as the airline seeks to recover from the impact of the plane lockdown without incurring costs it says will make it uncompetitive.

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At the same time, employees across Europe are demanding a pay rise as they grapple with rising inflation.

Sydbank analyst Jacob Pedersen calculates that a strike could cost SAS nearly 100 million Swedish crowns ($10 million) a day, and the company’s future ticket sales would suffer. Shares of SAS were down 4.7% as of 1511 GMT.

“A strike at this time is devastating for SAS and puts the future of the company along with the jobs of thousands of colleagues at stake,” SAS CEO Anko van der Werff said in a statement. Father.

“The decision to strike at this time demonstrates the reckless behavior of the pilots’ organizations and the astonishingly low understanding of the critical situation that SAS is in.”

Sydbank’s Pedersen said the strike could erase half of the airline’s cash flow of more than 8 billion crowns in just the first four to five weeks in a worst-case scenario, and would certainly leave “deep wounds”. ” for affected visitors. .

“SAS has too much debt and too high costs, and is therefore not competitive. In other words, SAS is a near-bankrupt company,” he said in a research report.


Union leaders blame the SAS.

“We finally realized that SAS didn’t want a deal,” SAS Pilots Group President Martin Lindgren told reporters. “SAS wants to strike.”

Lindgren said the pilots were ready to resume negotiations, but called on the SAS to change its stance.

Unions say nearly 1,000 pilots in Denmark, Sweden and Norway will join the strike, one of the biggest airline strikes since British Airways pilots entered 2019 has forced most of the airline’s flights into a pay dispute.

The disruption continued to flare as British Airways employees at London’s Heathrow Airport in June voted to strike wages. read more

Also, Hispanic flight attendant at Ryanair (RYA.I) and easyJet (EZJ.L) planned to go on strike this month to demand better working conditions, and workers at Paris’ Charles de Gaulle airport stopped working for the weekend to demand a raise. read more

Sofia Skedung, 38, arrived at Stockholm’s Arlanda airport to find the SAS flight she and her family booked for a chartered trip had been cancelled.

“I am going with my family to Corfu for a week of vacation, which we are really looking forward to as we have not traveled in a long time,” she said as she searched for SAS employees in the air. hope.

“Things here are very, very confusing,” she added.


The loss-making SAS is looking to restructure its business through major cost cuts, raising cash, and converting debt into equity. read more

“This is all about finding investors. How the hell did the busiest weekly strike in 2.5 years help find and attract investors?” van der Werff told reporters.

The airline, which is owned by the Swedish and Danish governments, estimates the strike will result in the cancellation of about 50 per cent of scheduled SAS flights and affect around 30,000 passengers a day, almost a year. the carrier’s daily half-load.

Denmark said it was willing to provide more cash and write off debt on condition the airline also had to attract private investors, while Sweden refused to inject more money.

Norway sold its stake in 2018, but still holds debt in the airline, and has said it may be willing to convert that into equity. read more

Danish Finance Minister Nicolai Wammen in an e-mail comment to Reuters said he hoped the parties would reach a solution as soon as possible.

The collective agreement between the airline and the union SAS Pilots Group expired on April 1. Months of negotiations, which began last November, have failed to conclude a new agreement.

Pilots were angered by SAS’ decision to hire pilots through two new subsidiaries – Connect and Link – instead of re-hiring former employees laid off during the pandemic, when nearly half of all pilots are company lost their jobs.

A strike would include all pilots from parent company SAS Scandinavia, but not Link and Connect, a union that organizes 260 pilots under the two units. The company said it will not affect SAS’s external partners Xfly, Cityjet and Airbaltic.

SAS has canceled many flights before the summer, part of a broader trend in Europe, where, in addition to the upheaval of strike action, operators have responded to staff shortages caused by hiring. slow plane again after the pandemic.

($1 = 10.3436 Swedish crown)

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Additional reporting by Stine Jacobsen in Copenhagen and Alex Cornwall in Dubai; written by Niklas Pollard; Editing by Barbara Lewis and Emelia Sithole-Matarise

Our standards: Thomson Reuters Trust Principles.

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