The Scandinavian airline SAS is struggling with major problems: The crisis in the industry requires a tighter cost structure, but the staff, who are supposed to accept salary cuts, are fighting back. SAS is now applying for voluntary bankruptcy protection in order to reorganize its finances.
The ailing Scandinavian airline SAS has filed for bankruptcy protection in the United States. The application is part of a business restructuring plan and is voluntary under Chapter 11 of the US bankruptcy laws, the company said. It is a financial restructuring procedure under judicial supervision. SAS linked the move to heightened problems amid a pilots’ strike.
Operations and flight schedules are not affected, the company said. However, almost 1000 pilots in Denmark, Sweden and Norway are on strike at SAS after the failed collective bargaining, which means that half of the flights have to be cancelled. According to SAS, 30,000 passengers are affected every day. The pilots are on strike because they say their salaries should be cut by up to 30 percent. Collective bargaining talks failed on Monday.
“In the past few months we have been working hard to improve our cost structure and strengthen our financial position. We are making progress, but much remains to be done and the ongoing strike has exacerbated an already difficult situation,” said CEO Anko van der Werff according to the announcement. He called for an end to the strike.
SAS announced an austerity program earlier this year. According to the company, it assumes that it will be able to meet its obligations from ongoing business in the near future. The airline’s cash on hand as of June 30 was SEK 7.8 billion (EUR 724 million). Discussions were also being held with several potential lenders.
