HomeBusinessSAS airline says its survival is at stake as pilot strikes flights

SAS airline says its survival is at stake as pilot strikes flights

  • Ground strike of about half of the airline’s flights
  • SAS says will affect around 30,000 passengers per day
  • The strike increases uncertainty over the future of the loss-making airline
  • Biggest airline strike since BA pilots in 2019

STOCKHOLM, July 4 (Reuters) – Wage talks between Scandinavian airline SAS (SAS.ST) and its pilots collapsed on Monday, sparking a strike that is putting the carrier’s future at risk and adding to travel chaos across Europe at the height of the summer holidays. period begins.

The action is the first major airline strike to hit as the industry seeks to capitalize on the first full rebound in leisure travel from the pandemic.

It follows months of acrimony between employees and management as the airline seeks to recover from the impact of the closures without incurring costs it says would make it unable to compete.

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At the same time, employees across Europe are demanding pay rises as they battle soaring inflation.

A strike could cost SAS nearly 100 million Swedish krona ($10 million) a day, calculated Sydbank analyst Jacob Pedersen, and the company’s future ticket sales will suffer. SAS shares were down 4.7% at 1511 GMT.

“A strike at this stage is devastating for SAS and puts the future of the company and the jobs of thousands of colleagues at risk,” SAS chief executive Anko van der Werff said in a statement.

“The decision to strike now demonstrates reckless behavior on the part of the pilot unions and a shockingly weak understanding of the plight in which SAS finds itself.”

Sydbank’s Pedersen said the strike could wipe out up to half of the airline’s cash flow of more than 8 billion crowns in the first four to five weeks in a worst-case scenario alone, and could only leave “deep wounds” among the travelers concerned. .

“SAS has too much debt and too high costs, and is therefore not competitive. SAS is in other words a company that is flying towards bankruptcy,” he said in a research note.

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Union leaders blamed SAS.

“We finally realized SAS didn’t want a deal,” SAS Pilot Group Chairman Martin Lindgren told reporters. “SAS wants a strike.”

Lindgren said the pilots were ready to resume talks, but called on SAS to change their position.

Unions have said nearly 1,000 pilots in Denmark, Sweden and Norway will join the strike, which is one of the biggest airline strikes since British Airways pilots in 2019 grounded most flights carrier in a compensation dispute.

Further disruption looms as British Airways staff at London’s Heathrow Airport in June voted in favor of a pay strike. Read more

In addition, Spanish cabin crew from Ryanair (RYA.I) and easyJet (EZJ.L) plan to strike this month to demand better working conditions and workers at Paris Charles de Gaulle airport stopped work on weekends to demand a higher salary. Read more

Sofia Skedung, 38, arrived at Arlanda Airport in Stockholm to find that the SAS flight on which she and her family had booked a charter trip had been cancelled.

“I was going to go with my family to Corfu on vacation for a week, which we were looking forward to since we haven’t traveled for a very long time,” she said as she searched in vain for staff at the SAS in the departure hall.

“It’s all very, very confusing here,” she added.

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Loss-making SAS is seeking to restructure its business by dramatically cutting costs, raising cash and converting debt into equity. Read more

“It’s about finding investors. How on earth does a strike in the busiest week in 2.5 years help find and attract investors?” van der Werff told reporters.

The airline, which is partly owned by the Swedish and Danish governments, estimated that the strike would lead to the cancellation of around 50% of SAS’s scheduled flights and affect around 30,000 passengers a day, around half of its daily load. .

Denmark said it was ready to provide more cash and write off debt on the condition that the airline also bring in private investors, while Sweden refused to inject more money.

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

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

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

Pilots have been angered by SAS’ decision to hire pilots through two new subsidiaries – Connect and Link – instead of first rehiring former employees made redundant during the pandemic, when almost half of its pilots lost their jobs.

A strike would include all pilots at parent company SAS Scandinavia, but not Link and Connect, a union that organizes the 260 pilots attached to the two units. It would also not affect SAS’s external partners Xfly, Cityjet and Airbaltic, the company said.

SAS had already canceled many flights before the summer, part of a wider trend in Europe, where, in addition to the upheaval from strikes, operators responded to staff shortages created by slow rehiring after the pandemic. .

($1 = 10.3436 Swedish crowns)

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

Our standards: The Thomson Reuters Trust Principles.

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