Scandinavian Airlines (SAS) resumed talks with unions on Friday as a pilot strike caused by a pay dispute enters its twelfth day and threatens the future of the carrier.
In a statement released on Thursday the carrier said the strike has “severely impacted the liquidity and overall financial position” of the company and is hampering attempts to raise “critically needed” capital.
The airline said the strike had so far caused 2,550 flight cancellations, affecting 270,000 passengers and cost the carrier between €94 million and €123 million.
The airline, which was reportedly suffering financial difficulties prior to the pandemic, filed for chapter 11 bankruptcy protection in the US on 5 June, a day after pilots walked off the job.
Major US-based carriers have used the chapter 11 bankruptcy protection process to successfully restructure their businesses in recent decades. The airline said access bridge financing under this process is contingent in its ability to “successfully demonstrate” a roadmap to achieve €710 million (SEK 7.5 billion) in annual cost savings, a key aspect of its ‘SAS FORWARD’ financial plan.
SAS president and CEO Anko van der Werff, said: “The strike also has a severe impact on our possibilities to succeed with SAS FORWARD. We must reach an agreement and end the strike as soon as possible. That will require us to find us a solution that is acceptable to all stakeholders that have expressed their intention to support SAS, conditioned on the company succeeding with SAS FORWARD. The strike is putting the success of the chapter 11 process and, ultimately, the survival of the company at stake.”
The carrier previously stated that it had sufficient liquidity to meet business obligations in the near term without accessing new forms of capital, but that a prolonged strike would “quickly erode” its limited cash reserves.
Flights operated by SAS Link, SAS Connect and external partners are not affected by the pilots’ strike.