Pilots’ strike hastened SAS’s decision to file for Chapter 11, CEO says
STOCKHOLM: SAS has filed for bankruptcy in the United States, the Scandinavian airline announced on Tuesday, warning that the pilots’ strikes had impacted its financial situation and liquidity.
Wage negotiations between SAS and its pilots collapsed on Monday, triggering a strike that is adding to the chaos of travel across Europe as the peak summer vacation period begins.
The company said in a statement on Tuesday that it would continue to serve customers through the bankruptcy process, although the pilots’ strike is impacting its flight schedule.
He said the purpose of the filing was to accelerate a restructuring plan announced in February.
“To proceed with the implementation of key elements of the plan, SAS and certain of its subsidiaries have voluntarily filed for Chapter 11 in the United States, a statutory financial restructuring proceeding conducted under the supervision of a US federal court,” said he declared.
SAS needs to attract new investors and said that to do this it needs to cut costs across the business, including for staff and for leased aircraft that sit idle due to the closure of Russian airspace and of a slow recovery in Asia.
The airline said on Tuesday its assessment was that it had sufficient cash to meet its short-term business obligations.
He added, however, that the strike “is having a negative impact on the company’s liquidity and financial situation and, if prolonged, this impact could become significant”.
Nordnet analyst Per Hansen said the app showed SAS needed a fresh start and he believed the strike would drag on forever.
“Chapter 11 protection is coming early,” he said. “Management and the board want to make it absolutely clear to all stakeholders that the situation is very serious.”
During the pandemic, several airlines such as LATAM and Philippine Airlines have also applied for Chapter 11 protection in the United States. Philippine Airlines is out, while LATAM expects to come out in the second half of this year.