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SAS says pilot strike in Scandinavia could sink airline

The pilots' strike at Scandinavian airline SAS is costing between $9.0 and $12 million a day and threatens the survival of the already financially troubled company, SAS said on Thursday.

An SAS plane approaches Arlanda airport
The current pilot strike in Denmark, Sweden and Norway could sink SAS, the company has warned. File photo: A SAS plane approaches Arlanda airport, north of Stockholm. Photo by Jonathan Naclstrand / AFP.

The stoppage, which is now in its tenth day, has already cost roughly 1.0 to 1.3 billion Swedish kronor ($94 million to $123 million), the company said.

Negotiations between unions and management have so far failed to produce a solution.The airline said more than 2,500 flights have had to be cancelled already, affecting 270,000 passengers.

SAS announced it was filing for Chapter 11 bankruptcy protection in the United States on July 5, the day after nearly 1,000 of its pilots walked off the job.

“The strike is putting the success of the Chapter 11 process and, ultimately, the survival of the company at stake,” SAS chief executive Anko van der Werff said.

The CEO said the strike also “has a severe impact on our possibilities to succeed with SAS Forward”, the cost-saving programme launched by the ailing company in February.

SAS, which employs nearly 7,000 people, mainly in Denmark, Norway and Sweden, is seeking to raise about 9.5 billion kronor in fresh capital.

The airline said it “had sufficient liquidity to meet its business obligations in the near term without accessing new forms of capital” but warned cash reserves “will erode very quickly in the face of a continuing pilot strike”.

The pilots walked out last week after negotiations broke down. They are protesting against salary cuts demanded by management as part of a restructuring plan aimed at ensuring the survival of the company, and the firm’s decision not to re-hire pilots laid off during the Covid-19 pandemic.

The summer is shaping up to be difficult overall for European airlines and airports, who are faced with staff shortages that is affecting air traffic.

After widespread job losses linked to Covid-19, airlines and airports are struggling to recruit new staff in many countries.

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TRAVEL

SAS pilots approve new collective agreement

93 percent of Danish SAS pilots have approved the agreement that ended strike action last month.

SAS pilots approve new collective agreement

93 percent of the Danish SAS pilots have voted yes to an agreement which ended strike action but also means, among other things, redeployments, longer working weeks and lower wages.

This was announced by Dansk Metal on Saturday morning. The pilots could have voted yes or no on the new collective agreement until midnight on Friday evening.

Pilots in Sweden and Norway have also approved the agreement.

Keld B√¶kkelund Hansen, head of negotiations at Dansk Metal, said “I am incredibly happy. It is a bit atypical to see that a collective agreement negotiation ends in agreements being made that reduce wages and conditions.”

“So of course it was exciting how our members viewed the new collective agreement. But they could also see that it was a necessity in relation to SAS’s situation,” he added.

The agreement comes after months of tug-of-war that finally saw SAS and the striking pilots reach a collective agreement on 19 July. It helped end a two-week strike.

Part of the background to the conflict between SAS and the pilots was that, during the COVID-19 pandemic, SAS dismissed around half of its pilots.

With the new collective agreement, however, all 450 dismissed pilots will be offered re-employment in the future.

At the same time, SAS pilots will see a 25 percent pay cut, and the limit for the workload is raised from 47 hours to 60 hours per week.

But even with strike action over and a collective agreement supported by pilots, the problems are far from over for SAS, which has suffered major financial losses during the conflict.

Currently, the airline plans to begin a reconstruction in the United States under bankruptcy protection in a so-called Chapter 11 process.

Bankruptcy protection will mean that SAS can continue to operate and pay wages while the process is ongoing.

SAS is seeking financing of up to $700 million- slightly more than DKK 5.1 billion.

SAS press manager Alexandra Lindgren Kaoukji said in a statement: “We are very happy and look forward to continuing our ongoing Chapter 11 process and our work to ensure a strong and sustainable airline for many years to come.The positive result of the vote will help SAS to attract long-term investors while we go through the Chapter 11 process and work further with the SAS Forward plan.”

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