Struggling SAS averts further strike as pilots agree to new pay deal

Scandinavian Airlines (SAS) has managed to avert further damaging strike action as Norwegian, Danish and Swedish members of the pilots’ unions have voted to accept a collective bargaining agreement that was reached last month.

In July the loss-making Scandinavian carrier had to cancel 3,700 flights during a financially disastrous 15-day strike which is estimated to have cost SAS over US$145 million during what would normally be one of the most profitable periods of the year. While the new deal involves lower wages and longer hours for pilots, SAS has agreed to rehire pilots that were laid off during the COVID-19 pandemic. Additionally, Dansk Metal, the union representing Danish pilots, said in a statement that pilots have been given a guarantee that SAS will not set up new subsidiaries on different terms than what has now been agreed.

However, the avoidance of further strike action does not mean that SAS is out of the woods where its future is concerned. The carrier has struggled to compete against other low-cost airlines and in addition to cutting costs, it needs to raise further capital to survive. While the Swedish government has rejected the company’s plea for more cash, Denmark says it might inject fresh funds if SAS also finds support from private-sector investors. SAS filed for U.S. bankruptcy protection on the second day of the strike, so the new collective bargaining deal between the airline and Swedish, Danish and Norwegian unions will need approval by a U.S. court handling creditors’ interests in the Chapter 11 process.