That hastened the airline’s decision to file for Chapter 11 bankruptcy in the United States, the airline’s chief executive Anko van der Werff said at a news conference on Tuesday. The company said in a statement that it will continue to serve its customers throughout the bankruptcy process, although the pilots’ strike affects its flight schedule. It said the purpose of the filing in US federal court was to speed up a restructuring plan announced in February. “Through this process, SAS aims to reach agreements with key stakeholders, restructure the company’s liabilities, restructure its aircraft fleet and emerge with a significant capital infusion,” SAS said in a statement. It expects to complete the Chapter 11 process in nine to 12 months, he added. SAS shares fell as much as 6% after the filing was announced and were trading 2% lower at 0728 GMT (0228 a.m. ET) During the pandemic, other non-U.S. airlines such as Avianca ( AVH ), Aeromexico and Philippine Airlines used the Chapter 11 process to renegotiate contracts with key suppliers such as aircraft lessors while continuing to operate. Rival Norwegian Air emerged from bankruptcy protection involving courts in Dublin and Oslo last year. “It doesn’t mean anything for normal operations. They are trying to repair the engine while driving,” Sydbank analyst Jacob Pedersen told Reuters of the SAS filing. “This is because SAS was unable to complete the changes through negotiations.” SAS needs to attract new investors and said to do so it needs to cut costs across the company, including staff and leased planes sitting idle because of closed Russian airspace and a slow recovery in Asia. The airline said on Tuesday that it estimated the balance of 7.8 billion Swedish kroner ($756 million) was sufficient to meet its business obligations in the short term. SAS said discussions with lenders about another $700 million in financing to support its operations during the restructuring were well advanced. He added, however, that the strike “has a negative impact on the company’s liquidity and financial position and, if prolonged, this impact could become significant.” Nordnet analyst Per Hansen said the application showed SAS needed a fresh start and he believed the strike would last. “Chapter 11 protection comes early,” he said. “Management and the board want to make it abundantly clear to all concerned that the situation is very serious.”
