SAS says pilot strike in Scandinavia could sink airline

The pilots' strike at Scandinavian airline SAS is costing between $9.0 and $12 million a day and threatens the survival of the already financially troubled company, SAS said on Thursday.

An SAS plane approaches Arlanda airport
The current pilot strike in Denmark, Sweden and Norway could sink SAS, the company has warned. File photo: A SAS plane approaches Arlanda airport, north of Stockholm. Photo by Jonathan Naclstrand / AFP.

The stoppage, which is now in its tenth day, has already cost roughly 1.0 to 1.3 billion Swedish kronor ($94 million to $123 million), the company said.

Negotiations between unions and management have so far failed to produce a solution.The airline said more than 2,500 flights have had to be cancelled already, affecting 270,000 passengers.

SAS announced it was filing for Chapter 11 bankruptcy protection in the United States on July 5, the day after nearly 1,000 of its pilots walked off the job.

“The strike is putting the success of the Chapter 11 process and, ultimately, the survival of the company at stake,” SAS chief executive Anko van der Werff said.

The CEO said the strike also “has a severe impact on our possibilities to succeed with SAS Forward”, the cost-saving programme launched by the ailing company in February.

SAS, which employs nearly 7,000 people, mainly in Denmark, Norway and Sweden, is seeking to raise about 9.5 billion kronor in fresh capital.

The airline said it “had sufficient liquidity to meet its business obligations in the near term without accessing new forms of capital” but warned cash reserves “will erode very quickly in the face of a continuing pilot strike”.

The pilots walked out last week after negotiations broke down. They are protesting against salary cuts demanded by management as part of a restructuring plan aimed at ensuring the survival of the company, and the firm’s decision not to re-hire pilots laid off during the Covid-19 pandemic.

The summer is shaping up to be difficult overall for European airlines and airports, who are faced with staff shortages that is affecting air traffic.

After widespread job losses linked to Covid-19, airlines and airports are struggling to recruit new staff in many countries.

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‘Weak numbers’: Scandinavian airline SAS files loss in latest result 

Economic headwinds are continuing for Scandinavian airline SAS, which has posted a loss of 2.7 billion Swedish kronor for the first quarter of this year.

‘Weak numbers’: Scandinavian airline SAS files loss in latest result 

Scandinavian airline SAS has posted a loss of 2.7 billion Swedish kronor (1.8 billion Danish kroner) for the last three months ending in January.

The loss is around 300 million kronor more than the one registered in the same period last year, Danish news wire Ritzau reports.

The result covers the period from November to January.

Although revenue increased by 2.3 billion kronor compared with 12 months earlier, profit did not keep pace due to higher costs.

SAS has been in a restructuring process since summer 2022 as part of its SAS Forward plan, and has applied for Chapter 11 bankruptcy protection in the US.

CEO Anko van der Werff cited an increase in passenger numbers by 48 percent compared to last year as a positive element of the result.

“We are happy that so many passengers are returning to SAS,” he said in the statement.

Around 4.5 million passengers flew with SAS in the last quarter. A year prior, travel was still largely restricted due to the coronavirus pandemic.

But SAS’ failure to raise its profit amid the increase in passengers is disappointing for the airline according to stock market analyst Jacob Pedersen of Sydbank.

“You would think that SAS would earn more money when their passenger numbers go up by almost 50 percent but they didn’t,” Pedersen told Danish news wire Ritzau.

“In that sense these are really weak numbers,” he said.

But the company is showing self-confidence by raising its economic forecast for this year, he also said.

“Especially when you consider that there’s an outlook for in recession in Europe later this year,” he said.

“Things don’t usually go well for airlines during periods of recession,” he said.

SAS expects its revenues next year to approach the level seen prior to the pandemic.

In 2025 the company expects to earn “more than 49 billion Swedish kronor” according to its latest financial report. That is an adjustment upwards from previous expectations.