The action is the first major airline strike to hit as the industry seeks to take advantage of the first full recovery in leisure travel since the pandemic. It follows months of acrimony between workers and management as the airline tries to recover from the impact of lockdowns without taking on costs it believes will leave it unable to compete. Sign up now for FREE unlimited access to Reuters.com Register At the same time, workers across Europe are demanding pay rises as they struggle with rising inflation. A strike could cost SAS nearly 100 million Swedish kroner ($10 million) a day, Sydbank analyst Jacob Pedersen estimated, and the company’s future ticket sales would suffer. SAS shares were down 4.7% at 1511 GMT. “A strike at this point is devastating for SAS and puts the future of the company at risk along with the jobs of thousands of colleagues,” said SAS CEO Anko van der Werff. “The decision to strike now demonstrates reckless behavior by the pilots’ unions and a shockingly low understanding of the critical situation in which the SAS finds itself.” Sydbank’s Pedersen said the strike could wipe out as much as half of the airline’s cash flow of more than 8 billion kroner in the first four to five weeks alone in a worst-case scenario and was sure to leave “deep wounds” in the affected travelers. . “SAS has too much debt and too high costs, and therefore is not competitive. SAS is, in other words, a company headed for bankruptcy,” he said in a research note.
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Union leaders blamed the SAS. “We finally realized that SAS does not want a deal,” SAS Pilot Group chairman Martin Lindgren told reporters. “SAS wants strike”. Lindgren said the pilots were prepared to continue talks, but called on the SAS to change its stance. Unions said nearly 1,000 pilots in Denmark, Sweden and Norway would take part in the strike, one of the biggest airline walkouts since British Airways pilots in 2019 grounded most of the carrier’s flights in a dispute over the fees. Further disruption looms as British Airways staff at London’s Heathrow Airport in June voted to strike over pay. read more Scandinavian Airlines (SAS) flights are seen at Copenhagen Kastrup Airport in Copenhagen, Denmark July 3, 2022. REUTERS/Andrew Kelly read more Additionally, cabin crew at Ryanair ( RYA.I ) and Spain-based easyJet ( EZJ.L ) plan to strike this month to demand better working conditions, and workers at Paris Charles de Gaulle airport have stopped work on the weekend to demand a pay increase. read more Sofia Skedung, 38, arrived at Stockholm’s Arlanda Airport to find that the SAS flight she and her family had booked on for a charter trip had been cancelled. “I was going to go with my family to Corfu for a week’s holiday, which we were really looking forward to as we hadn’t traveled in a long time,” he said as he searched the departure lounge in vain for SAS staff. “Everything is very, very confused here,” he added.
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Loss-making SAS is seeking to restructure its operations through major cost-cutting, a cash injection and debt-to-equity conversion. read more “This is 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 governments of Sweden and Denmark, estimated that the strike would lead to the cancellation of around 50% of scheduled SAS flights and affect around 30,000 passengers a day, about half of its daily load. Denmark has said it is willing to provide more cash and write off debt provided the airline also brings in private investors, while Sweden has refused to put up more money. Norwegian sold its stake in 2018 but has debt in the airline and has said it may be willing to convert it into equity. read more Danish Finance Minister Nicolai Wammen said in an e-mailed comment to Reuters that 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 produce a new deal. Pilots were angered by SAS’ decision to recruit pilots through two new subsidiaries – Connect and Link – instead of first re-hiring former employees made redundant during the pandemic, when almost half of its pilots lost their jobs. A strike would include all pilots from parent company SAS Scandinavia, but not Link and Connect, a union that organizes the 260 pilots linked to the two units. Nor will it affect SAS’s external partners Xfly, Cityjet and Airbaltic, the company said. SAS had already canceled several flights ahead of the summer, part of a wider trend in Europe where, in addition to strike turmoil, carriers have responded to staff shortages created by slow rehiring after the pandemic. ($1 = 10.3436 Swedish kroner) Sign up now for FREE unlimited access to Reuters.com Register Additional reporting by Stine Jacobsen in Copenhagen and Alex Cornwall in Dubai. writing by Niklas Pollard. edited by Barbara Lewis and Emelia Sithole-Matarise Our Standards: The Thomson Reuters Trust Principles.
