Stockholm (Reuters) -SAS stated on Thursday that a pilot strike, now in its eleventh day, posed a threat to the airline’s capacity to acquire bridge funding, without which it could be forced to drastically downsize or fail.
SAS and unions engaged in additional negotiations on Thursday to terminate a strike by the majority of its pilots during the height of the holiday travel season, over circumstances connected to the Scandinavian airline’s emergency plan.
SAS said in a statement, “The strikes imperil the company’s capacity to ultimately raise urgently required near-term and long-term cash to fund its successful reorganisation.”
“In such a scenario, the corporation will need to contemplate selling significant strategic assets under duress, as well as drastically reducing its operations and fleet,“
Jan Sjolin, the mediator, stated that SAS and the pilot unions were scheduled to meet on Thursday until 20:00 GMT.
“We sincerely hope that a deal will be reached today. “These are constructive discussions,” he said.
Wednesday marked the resumption of collective bargaining talks, which had ceased on July 4.
According to FlightAware, the airline, whose primary shareholders are the governments of Sweden and Denmark, cancelled 201 flights, or 64 percent of those booked, on Thursday.
SAS reported that the strike had so far resulted in the cancellation of 2,550 flights, affecting 270,000 passengers, and costing between $94 million and $123 million.
It has warned that its meagre cash reserves will deplete rapidly if the strike persists.
On July 5, the long-suffering SAS filed for U.S. bankruptcy protection, citing the need to cut costs and recruit new investors in order to continue.
The strike threatens the success of the Chapter 11 process and, eventually, the company’s survival, according to CEO Anko van der Werff.
Pilots employed by SAS Scandinavia, a subsidiary of SAS Group, have indicated their willingness to accept minimal wage cutbacks and less favourable terms, but SAS has stated that the concessions made thus far are insufficient for it to implement a February-announced rescue plan.
Unions are also requesting that pilots who lost their employment as a result of the epidemic be rehired by SAS Scandinavia, rather than being forced to compete with foreign applicants for jobs with less desirable terms at the newly launched SAS Link and SAS Connect, situated in Ireland.
Danish mechanics, who had been striking in solidarity with pilots, said on Thursday that they were stopping their strike. This implies that SAS planes in Copenhagen will be maintained and will be able to return to flight quickly once an agreement is made with the pilots.
The Swedish mechanics have not continued their strike. SAS Connect and SAS Link pilots are not on strike either.
$1 is equivalent to 10.6095 Swedish crowns.
