Scandinavia’s SAS looking at ways to end pilot strike

A Scandinavian Airlines, known as SAS, Airbus A320-200 airplane takes off from the airport in Palma de Mallorca July 29, 2018. — Reuters pic
A Scandinavian Airlines, known as SAS, Airbus A320-200 airplane takes off from the airport in Palma de Mallorca July 29, 2018. — Reuters pic

STOCKHOLM, April 29 — The CEO of Scandinavian airline SAS has told negotiators to thrash out what concessions the company could make to end a pilots strike that has disrupted travel plans for hundreds of thousands of passengers.

Well into the fourth day of the strike, neither SAS nor unions in Sweden, Denmark and Norway have contacted the other side, and no new talks are scheduled, SAS and the unions said.

SAS pilots went on strike on Friday as wage talks broke down, grounding around 70 per cent of the airline’s flights and affecting about 280,000 passengers, including cancellations set for today and tomorrow.

SAS Chief Executive Rickard Gustafson told Reuters the dispute was damaging the airline, which is part-owned by the governments of Sweden and Denmark, with big financial consequences.

“We simply have to put an end to this conflict. It is deeply damaging to the company, and it erodes our customers’ confidence in the company,” Gustafson said in an interview.

“I have instructed our negotiation team to continue to work on (our proposals) and see what more we can do to find constructive solutions within reason. We also need to survive after the conflict,” he added.

Sydbank analysts have estimated the strike is costing the airline 60-80 million Swedish crowns (RM26-RM34.7 million) per day, a rate that would wipe out the expected net profit this year in just two weeks.

SAS shares were down 1.8 per cent at 1250 GMT, while the broader market in Stockholm was roughly unchanged.

SAS pilots in the three countries went on strike after talks over wages, careers and work schedules broke down. The Swedish union has said pilots were seeking around a 13 per cent pay hike.

The aviation industry’s employer body in Sweden says pilots already have high wages, averaging 93,000 crowns last year. The Swedish pilots union disputes the figure, saying salaries start at 34,000 crowns, rising over 25 years to 98,000.

SAS has been cutting costs for years amid competition from low-cost rivals such as Norwegian Air and Ryanair

Close to bankruptcy in 2012, SAS sold assets and cut wages and thousands of jobs in return for a life-saving credit facility. It has been profitable in the last four years but fuel costs are rising and overcapacity is still squeezing the sector.

“We can’t have a cost explosion in the company. That would leave us with no competitive power,” Gustafson said.

A growing global pilot shortage has meanwhile bolstered pilots’ bargaining power, as seen at other airlines including Ryanair, Lufthansa and Air France.

The Cockpit Association of Norway and the Swedish Airline Pilots Association said they were willing to resume negotiations if approached by the employer.

Meanwhile, regional rival Norwegian Air said it was adding flights to its schedule in response to extraordinary demand.

A search on Norwegian’s booking site showed flights to many destinations were sold out, while others cost three to four times more in the coming days than in subsequent weeks. — Reuters

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