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
  • Strike increases uncertainty over loss-making airline’s future
  • 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 with lower-cost rivals. .

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At the same time, employees across Europe are demanding pay rises as they grapple with soaring living costs.

A strike could cost SAS between 80 and 90 million Danish kroner ($11.2 million to $12.6 million) a day, calculated Sydbank analyst Jacob Pedersen, and the company’s ticket sales for the future flights will suffer. SAS shares fell 3.5% at 12:47 GMT, wiping out earlier losses.

“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.”

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 the employers to change their position. “We hope we can go back to the negotiating table and meet, but that requires the employer to make a move,” he said.

Unions have said nearly 1,000 pilots in Denmark, Sweden and Norway will join the strike, which is one of the largest airline worker walkouts since British Airways pilots in 2019 blocked most carrier flights in a wage dispute.

Further disruption looms as British Airways staff at London Heathrow Airport voted in June for a pay strike, threatening to disrupt one of Europe’s busiest airline hubs. 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 halted work over the weekend, forcing the cancellation of around 10% of flights. Read more

BUSIEST WEEK

The loss-making SAS is seeking to restructure its business by making major cost cuts, 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.

He estimated that the strike would lead to the cancellation of around 50% of SAS’ scheduled flights and affect around 30,000 passengers per day.

The carrier, which is partly owned by the Swedish and Danish governments, carried an average of 58,000 passengers a day last month. It serves destinations in Asia, Europe and the United States.

Denmark said it was ready to inject more money and cancel its 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 still holds debt in the airline and said it may be willing to convert the debt into equity.

Sweden’s industry minister did not immediately respond to a request for comment.

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

“Collective bargaining issues are a matter between SAS management and SAS employees and their organizations,” he said.

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’s decision to hire new 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.

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

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Reporting by Anna Ringstrom and Essi Lehto; additional reporting by Stine Jacobsen in Copenhagen and Alex Cornwall in Dubai; written by Niklas Pollard; edited by Barbara Lewis

Our standards: The Thomson Reuters Trust Principles.

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