Airline SAS says survival at stake as pilot strike grounds flights

STOCKHOLM, July 4 (Reuters) – Wage talks between Scandinavian airline SAS (SAS.ST) and its pilots collapsed on Monday, triggering a strike that places the way forward for the service in danger and provides to journey chaos throughout Europe as the height summer time trip interval begins.

The motion is the primary main airline strike to hit when the business is searching for to capitalise on the primary full rebound in leisure journey following the pandemic.

It follows months of acrimony between workers and administration because the airline seeks to get better from the impression of lockdowns with out taking up prices it believes would depart it unable to compete.

On the identical time, workers throughout Europe are demanding wage rises as they wrestle with surging inflation.

A strike may price SAS practically 100 million Swedish crowns ($10 million) per day, Sydbank analyst Jacob Pedersen calculated, and the corporate’s future ticket gross sales will endure. Shares in SAS have been down 4.7% by 1511 GMT.

“A strike at this level is devastating for SAS and places the corporate’s future along with the roles of 1000’s of colleagues at stake,” SAS Chief Government Anko van der Werff mentioned in an announcement.

“The choice to go on strike now demonstrates reckless behaviour from the pilots’ unions and a surprisingly low understanding of the important state of affairs that SAS is in.”

Sydbank’s Pedersen mentioned the strike may erase as much as half of the airline’s money circulate of greater than 8 billion crowns within the preliminary four-to-five weeks alone in a worst-case situation, and was sure to go away “deep wounds” amongst affected travellers.

“SAS has an excessive amount of debt and too excessive prices, and is thus not aggressive. SAS is in different phrases an organization flying towards chapter,” he mentioned in a analysis notice.

TRADING BLAME

Union leaders blamed SAS.

“We’ve lastly realised that SAS does not need an settlement,” SAS Pilot Group chairman Martin Lindgren informed reporters. “SAS desires a strike.”

Lindgren mentioned the pilots have been able to resume talks, however known as on SAS to vary its stance.

The unions mentioned practically 1,000 pilots in Denmark, Sweden and Norway will be part of the strike, which is likely one of the largest airline walkouts since British Airways pilots in 2019 grounded many of the service’s flights in a dispute over pay.

Additional disruption looms as British Airways workers at London’s Heathrow airport in June voted to strike over pay. learn extra

As well as, Spanish-based cabin crew at Ryanair (RYA.I) and easyJet (EZJ.L) plan to strike this month to demand higher working circumstances and employees at Paris’ Charles de Gaulle airport stopped work on the weekend to demand a pay rise. learn extra

Sofia Skedung, 38, arrived at Stockholm’s Arlanda airport to search out the SAS flight she and her household have been booked on for a constitution journey was cancelled.

“I used to be going to go together with my household to Corfu on vacation for per week, which we actually had regarded ahead to since we’ve not travelled in a very very long time,” she mentioned as searched the departure corridor in useless for SAS workers.

“Every little thing may be very, very confused right here,” she added.

BUSIEST WEEK

Loss-making SAS is searching for to restructure its enterprise by way of giant price cuts, elevating money and changing debt to fairness. learn extra

“That is all about discovering buyers. How on earth is a strike within the busiest week of the final 2.5 years serving to discover and appeal to buyers?” van der Werff informed reporters.

The airline, which is part-owned by the governments of Sweden and Denmark, estimated the strike would result in the cancellation of round 50% of scheduled SAS flights and impression round 30,000 passengers per day, roughly half its each day load.

Denmark has mentioned it’s prepared to supply extra cash and write off debt on situation the airline brings in non-public buyers as effectively, whereas Sweden has refused to inject extra money.

Norway bought its stake in 2018, however holds debt within the airline, and has mentioned it is likely to be prepared to transform that into fairness. learn extra

Denmark’s Finance Minister Nicolai Wammen in an e-mailed remark to Reuters mentioned he hoped the events would attain an answer as quickly as potential.

The collective settlement between the airline and the SAS Pilot Group union expired on April 1. Months of negotiations, which started final November, have didn’t conclude a brand new deal.

Pilots have been angered by SAS’ determination to rent pilots by way of two new subsidiaries – Join and Hyperlink – as a substitute of first rehiring former workers dismissed throughout the pandemic, when nearly half of its pilots misplaced their jobs.

A strike would come with all pilots from mother or father firm SAS Scandinavia, however not Hyperlink and Join, a union that organises the 260 pilots connected to the 2 items. Neither wouldn’t it have an effect on SAS’ exterior companions Xfly, Cityjet and Airbaltic, the corporate has mentioned.

SAS had already cancelled many flights forward of the summer time, a part of a wider development in Europe, the place, along with the upheaval of strike motion, operators have responded to workers shortages created by sluggish rehiring after the pandemic.

($1 = 10.3436 Swedish crowns)

Further reporting by Stine Jacobsen in Copenhagen and Alex Cornwall in Dubai; writing by Niklas Pollard; modifying by Barbara Lewis and Emelia Sithole-Matarise

: .