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SCANDINAVIAN

SAS in last minute bid to avoid collapse: report

According to reports in several Swedish media sources, Scandinavian Airline SAS is reported to be close to bankruptcy with staff set to be told to take a pay cut or face losing their jobs.

Published: 11 November 2012 10:42 CET
SAS in last minute bid to avoid collapse: report

The troubled airline has been the subject of persistent bankruptcy rumours in recent weeks which intensified further after the company delayed the publication of its quarterly report, which is set to be published on Monday.

According to a report in the Expressen daily, intensive last minute discussions are ongoing within the Swedish government over how the immediate situation, and the prospect of bankruptcy, can be managed.

The loss-making airline has been told by its banks that state guarantees from major shareholders – Sweden, Norway and Denmark – are required before an extension is granted on a 4.7 billion kronor ($700 million) credit facility.

According to a report in the Dagens Industri business daily on Friday, the three Scandinavian countries this week sought EU approval for the guarantees.

According to a report in the Dagens Nyheter daily on Sunday, SAS staff are set to be presented with an ultimatum to take a pay cut or face losing their jobs.

The pay cuts will apply to salaries, holiday entitlements and a requirement for longer working hours, according to the newspaper’s source.

The company has said that it intends to present a concrete plan for future operations in conjunction with the presentation of its third quarter report on Monday.

The airline’s problems have persisted in recent years and the firm has struggled to compete with competitors. High salaries, pensions liabilities and an ageing fleet have all contributed to the parlous state of the company.

The last time the firm’s problems came to a head, in 2010, cabin staff backed down and accepted lower pay and conditions.

SAS employs 20,000 staff.

The Local/pvs

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EUROPEAN UNION

KEY POINTS: Is the EU really planning to double the price of Swedish snus?

Claims over the weekend that the EU planned to bring in a new tax which will nearly double the price of Swedish 'snus' tobacco led to the hashtag #Swexit trending over the weekend. But a commission spokesman stressed on Monday that the story was inaccurate.

Published: 28 November 2022 15:52 CET
KEY POINTS: Is the EU really planning to double the price of Swedish snus?

Where does the claim come from? 

The Aftonbladet newspaper on Sunday ran a story based around a “secret, leaked” proposal from the European Commission for a new excise tax on tobacco which the newspaper claimed would be presented at the start of next month, with discussion then taking place between various EU member states. 

The article does not name a source or quote from or show any parts of the document, but it quotes Patrik Hildingsson, the head of communications at the snus producer Swedish Match, who it says has “received the coming report”. 

What was the reaction? 

The story generated a near viral response on Swedish Twitter. The Sweden Democrats party jumped on the story, with the Twitter account for the party’s EU MEPs tweeting using the hashtag #Swexit, which then started to trend. 

According to Charlie Weimers, one of the Sweden Democrats’ MEPs, the commission is proposing a 12.5 percent increase in tax on cigarettes, a 200 percent increase in taxes on snus, and 500 percent increase in taxes on tobacco-free snus.

In a way, this is unsurprising as snus is used by about 17 percent of people in Sweden. The tobacco product is made by grinding up tobacco with flavourings and other ingredients and placing it in small bags which are pushed under the upper lip. It has been linked to a higher incidence of mouth cancer, but is much less dangerous than smoking. 

Why is snus sensitive for Sweden? 

When Sweden joined the European Union in 1995, it was granted an exemption from the ban on oral tobacco products the European Union had brought in back in 1992. Companies are allowed to manufacture snus in Sweden and sell it to their citizens, but they are not allowed to sell snus in other EU counties.  

Is it true that the European Commission plans to force higher tax on snus? 

Dan Ferrie, a European spokesperson on tax issues, told the EU’s daily press briefing on Monday that the commission’s coming proposals on tobacco taxation would not affect Sweden’s freedom to tax the product. 

“Sweden has had an exemption since it entered the EU when it comes to the sale of snus,” he said. “The proposal that we are working on right now is not going to change that situation because the sale of snus is not permitted outside Sweden. Sweden ill as a result continue to have full freedom to set its own tax rate and tariffs for snus.” 

Already on Sunday, Sweden’s EU commissioner Ylva Johansson said that she had stressed to the commission developing the new proposals the “unreasonable consequences for Swedish snus” if it were to force a higher tax rate. 

“My judgement is that this proposal has not yet been developed to the level where it can be proposed,” she said in an sms to Swedish state TV broadcaster SVT. “Tax questions require unanimity within the Ministerial Council.”

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