- It flies on the ground about half of the flights of the airlines
- SAS says it will affect about 30,000 passengers a day
- The strike increases uncertainty about the future of loss-making airlines
- The biggest air 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 jeopardizes the company’s future and escalates chaos of travel around Europe as a maximum summer vacation. the period begins.
The action is the first major airline strike to occur when the industry seeks to capitalize on the first total rebound in leisure travel after the pandemic.
It follows months of bitterness between employees and management, as the airline seeks to recover from the impact of the blockades without assuming the costs it believes would leave it unable to compete.
Register now for FREE and unlimited access to Reuters.com
Sign up
At the same time, employees across Europe are demanding wage increases as they struggle with rising inflation.
A strike could cost SAS nearly 100 million Swedish kronor ($ 10 million) a day, Sydbank analyst Jacob Pedersen calculated, and the company’s future ticket sales will suffer. SAS shares were down 4.7% at 15.11 GMT.
“A strike right now is devastating for SAS and puts the future of the company at stake with the jobs of thousands of colleagues,” SAS CEO Anko van der Werff said in a statement.
“The decision to strike now demonstrates reckless behavior on the part of pilots’ unions and a surprisingly low understanding of the critical situation in which SAS finds itself.”
Sydbank’s Pedersen said the strike could wipe out half of the airline’s cash flow of more than 8 billion kroner in the first four or five weeks in the worst case, and he was forced to leaving “deep wounds” among the affected travelers. .
“SAS has too much debt and too high costs and is therefore not competitive. In other words, SAS is a company flying into bankruptcy,” it said in a research note.
COMMERCIAL FAULT
Union leaders blamed SAS.
“We have finally realized that SAS does not want an agreement,” SAS Pilot Group president Martin Lindgren told reporters. “SAS wants a strike.”
Lindgren said the pilots were ready to resume talks, but asked SAS to change its position.
Unions said nearly 1,000 pilots in Denmark, Sweden and Norway will join the strike, which is one of the biggest disruptions by airlines since British Airways pilots in 2019 left most flights on the ground. the company in a wage dispute.
There were further interruptions when British Airways staff at London Heathrow Airport in June voted in favor of the strike to pay wages. Read more
Scandinavian Airlines (SAS) flights are shown at Copenhagen Kastrup Airport in Copenhagen, Denmark on July 3, 2022. REUTERS / Andrew Kelly
Read more
In addition, the cabin crew of Ryanair (RYA.I) and easyJet (EZJ.L) based in Spain are scheduled to strike this month to demand better working conditions and workers at Charles de Gaulle Airport in Paris stopped work on the weekend to ask for a salary. go up. Read more
Sofia Skedung, 38, arrived at Stockholm Arlanda Airport to find that the SAS flight on which she and her family were booked for a charter trip had been canceled.
“I was going to Corfu with my family on holiday for a week, which we were really looking forward to, as we hadn’t traveled in a long time,” he said as he searched in vain for SAS staff in the departure lounge.
“Everything here is very, very confused,” he added.
THE MOST OFFICE WEEK
SAS with losses seeks to restructure its business through large cost cuts, raising cash and converting debt into capital. Read more
“This is about finding investors. How does one of the busiest week strikes in the last 2.5 years help find and attract investors?” van der Werff told reporters.
The airline, which is owned by the governments of Sweden and Denmark, estimated that the strike would lead to the cancellation of 50% of SAS scheduled flights and affect about 30,000 passengers per day, about half of its daily cargo. .
Denmark has said it is willing to provide more cash and cancel the debt on condition that the airline also attracts private investors, while Sweden has refused to inject more money.
Norway sold its stake in 2018, but has debts to the airline and has said it could be willing to turn it into capital. Read more
Danish Finance Minister Nicolai Wammen, in an emailed comment to Reuters, said 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 1 April. Months of negotiations, which began last November, have failed to conclude a new agreement.
Pilots were outraged by SAS’s decision to hire pilots through two new subsidiaries, Connect and Link, rather than re-hiring former employees laid off during the pandemic, when nearly half of its pilots lost their jobs.
A strike would include all pilots of the parent company SAS Scandinavia, but not Link and Connect, a union that organizes the 260 pilots assigned to the two units. It would also not affect SAS Xfly’s external partners, Cityjet and Airbaltic, the company said.
SAS had already canceled many flights before the summer, part of a broader trend in Europe, where, in addition to the strike disorder, operators have responded to the shortage of staff created by the slow recruitment after of the pandemic.
(1 $ = 10.3436 Swedish kronor)
Register now for FREE and unlimited access to Reuters.com
Sign up
Additional report by Stine Jacobsen in Copenhagen and Alex Cornwall in Dubai; written by Niklas Pollard; edition by Barbara Lewis and Emelia Sithole-Matarise
Our standards: the principles of trust of Thomson Reuters.