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Signs of imminent agreement as Scandinavian airline SAS and pilots negotiate overnight: analyst

Scandinavian airline SAS and pilots unions continued overnight talks on Sunday, but one aviation analyst believes the parties may be close to reaching an agreement to end the pilots strike, which entered its 14th day on Sunday.

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.

“When you negotiate as intensively as the parties are now, you must expect that you start to approach a result,” said Sydbank aviation analyst Jacob Pedersen, Danish newswire Ritzau reported.

Previously, negotiations were put on hold at night and resumed the following day, but this time, the parties saw reason to continue negotiations overnight and into Sunday morning.

This indicated that an agreement could be imminent, Pedersen said, although he said he could not predict a timeline for this.

“I have no other good suggestions other than it must be close. Whether it will be Sunday, Monday or maybe Tuesday is more of an open question,” he added.

About 1,000 SAS pilots from Denmark, Norway and Sweden have been on strike since Monday, July 4th when talks over conditions related to the airline’s rescue plan broke down. In recent days, negotiations have resumed.

The pilots 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.

Axed pilots have had to compete against external applicants for jobs at SAS subsidiaries SAS Link and SAS Connect on less favourable terms than at the main airline SAS Scandinavia.

SAS is in major financial difficulties, exacerbated by the pandemic, and is working to implement a cost-saving plan called SAS Forward to provide annual savings in the billions of Swedish krona.

According to Pedersen, it is crucial for SAS to reach an agreement soon.

“This strike must end as quickly as possible for SAS,” he said, explaining that they were losing money quickly and that their reputation with leisure travellers was also suffering huge damage.

“It’s important to get the planes in the air as soon as possible,” he added.

The strike has cost SAS up to 130m kronor a day,  with 62 percent of SAS’ scheduled flights cancelled on Sunday, according to flight-tracking platform FlightAware. 

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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 Bækkelund 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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