Pilot strike drags SAS net loss further down

Airplanes of the Scandinavian Airlines’ SAS company grounded at the Gardamoen Airport during a strike of pilots to contest wages and working hours in Oslo April 26, 2019. — AFP pic
Airplanes of the Scandinavian Airlines’ SAS company grounded at the Gardamoen Airport during a strike of pilots to contest wages and working hours in Oslo April 26, 2019. — AFP pic

STOCKHOLM, May 28 — Scandinavian airline SAS announced today that its second-quarter earnings were severely impacted by a week-long pilot strike in late April, saying it would lower its forecast for the year.

The carrier incurred a net loss of 933 million Swedish kronor (RM408.5 million) for its second quarter from February to April, compared to a net loss of 349 million for the corresponding period a year earlier.

After months of failed negotiations, 1,400 SAS pilots went on strike on April 26, disrupting domestic, European and long-haul flights.

The airline and the pilots’ union failed to reach an agreement until the evening of May 2, after around 4,000 flights were cancelled, affecting more than 370,000 passengers.

“The total impact on income before tax of the strike is estimated at 650 million kronor, of which 430 million relate to the last five days of the second quarter,” SAS CEO Rickard Gustafson said in a statement.

Since the strike ran into May, the last two days of the strike will also impact the company’s third quarter results.

SAS said that rising jet fuel prices, a weakened krona and decreased demand for domestic travel, especially in Sweden, had also weighed on results.

The airline said it was expecting a “positive” result for the full year, but with the pilot strike and other factors it would be “challenging to reach a positive result”.

SAS shares were down more than six per cent an hour into trading on the Stockholm stock exchange today.

Since the beginning of the strike in April, SAS shares have lost more than 20 per cent of their value. — AFP