Stockholm (Reuters) – The Scandinavian airline SAS entered its third day of a devastating pilot strike on Wednesday, cancelling well over half of its flights as it prepared for the first court hearing in its bankruptcy procedures later in the week.
The airline, whose largest shareholders are the Swedish and Danish governments, filed for bankruptcy protection in the United States on Tuesday in an effort to reduce its debt while warning that a pilot’s strike had exacerbated its financial situation.
Talks between SAS and pilots in its major SAS Scandinavia business regarding a new collective bargaining agreement broke down on Monday, resulting in a strike that has added to the travel havoc in Europe and sparked a heated blame game between management and unions.
SAS has estimated that the strike will cost it between $10 million and $13 million per day, which hastened its decision to seek Chapter 11 bankruptcy protection in order to restructure its loss-making business.
FlightAware data revealed that 196 SAS flights were cancelled on Wednesday, representing a cancellation rate of 63%. The airline has stated that the strike will affect around fifty percent of its regular flights.
At Stockholm’s Arlanda Airport, which is regularly bustling with SAS flights, ground-handling workers were doing their best to deal with the situation, according to Martin Johansson, chairman of the white-collar Unionen labour union’s local branch.
“They are anxious,” he stated. “Ground handling takes the first hit—we are always the first people that travellers encounter here.”
They have little choice except to send people home.
The airline stated that filing for bankruptcy was intended to expedite a restructuring plan revealed in February. A court document revealed that the initial hearing was planned for Thursday in New York City.
SAS anticipates completing Chapter 11 within nine to twelve months.
Since November, union officials and management have been negotiating, and the collective agreement between the airline and the SAS Pilot Group union expired on April 1. The terms for rehiring pilots have been the primary source of contention.
Instead of rehiring old personnel laid off during the pandemic, when nearly half of the airline’s pilots were let go, SAS has decided to hire new pilots through two new companies—Connect and Link—under what unions say are worse terms. This has outraged pilots.
The walkout includes all pilots from SAS Scandinavia’s parent company, but not those from Link and Connect, which are represented by a different union. The strike has no effect on external partners of SAS, including Xfly, Cityjet, and Airbaltic.