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Global Economy

SAS agrees with pilots

After weeks of wrangling, the airline SAS and the Scandinavian pilots' union have settled their wage dispute. The company announced this. Many flights have been canceled in recent weeks due to the SAS pilots' strike, and thousands of passengers have been unable to travel. Now normal operations are to be resumed “as soon as possible”. SAS customers could now "fly into their long-awaited summer vacation," says company boss Anko van der Werff.

First strike, then bankruptcy

Negotiations on a new collective agreement were broken off in early July. After that, around 900 SAS pilots from Denmark, Norway and Sweden went on strike. According to the company, the walkout cost the airline between nine and twelve million dollars a day. On July 5, SAS also declared bankruptcy because of the financial impact of the strike and filed for bankruptcy protection in the United States.

A new round of talks was then started in Stockholm on Wednesday last week. Until late in the evening yesterday it was still unclear whether an agreement could be reached. Several media had reported about it, but the company only confirmed this this morning. SAS shares were up 20 percent yesterday on the Stockholm Stock Exchange.

Fired pilots are reinstated

The parties have agreed on new collective agreements for a period of five and a half years. In addition, SAS plans to hire 450 previously fired pilots full-time again. The unions had accused SAS of using the corona pandemic to fire hundreds of pilots with an agreed right to reinstatement, but then overruling that right. Instead, the airline is relying on cheaper pilots from the subsidiaries SAS Link and SAS Connect, which act as the airline's personnel service providers, according to the criticism. Subsidiary pilots were not on strike.

The largest shareholders in SAS are Sweden and Denmark, each owning 21.8 percent of the company. SAS had already announced a restructuring plan for the company in February. According to the company, however, this could not be implemented because of the salary demands of the pilots.

Looking for new investors

The initiated restructuring procedure according to Chapter 11 (Chapter 11) of the US bankruptcy law now protects the company from access by its creditors for a certain time and thus facilitates the financial restart. US airlines often use this route to shake off debt or expensive leases.

SAS assumes that the process will take nine to twelve months. The process serves to agree on debt restructuring with all those involved, to increase capital significantly and to reorganize the aircraft fleet. The airline needs new financiers and wants to cut costs in order to become attractive to investors.

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