SAS Confirms Deal Reached With Pilots' Unions, Ending 15-day Strike

SAS and pilot unions have reached a wage deal, the Scandinavian airline confirmed on Tuesday, ending a 15-day strike over a new collective bargaining agreement that had grounded 3,700 flights and put the carrier's future in doubt.

Shares in SAS rose more than 12% in early morning trade. They are still down about a third since the beginning of the year.

SAS and a union representing its pilots had said late on Monday that a deal was close.

The airline, which filed for U.S. bankruptcy protection on the second day of the strike, said the industrial action had cost it more than $145 million to date and affected 380,000 passengers in the peak summer travel season.

The labour strife was the latest across Europe's aviation sector as millions of workers struggle with rising costs of living, prompting trade unions to demand wage increases and stage walkouts, disrupting travel.

Even before the pandemic hit, SAS was losing money amid rising competition from low-cost carriers. The company's biggest owners are Swedish and Danish taxpayers.

The airline said the new 5-1/2-year deal with four pilot unions would help it achieve part of the $700 million of annual cost savings set out in a business transformation plan that also includes measures such as handing back unwanted planes to lessors.

"Finally, we can resume normal operations and fly our customers on their much longed-for summer holidays," SAS Chief Executive Anko van der Werff said in a statement. "I deeply regret that so many of our passengers have been impacted by this strike."

Some flight disruptions will continue while the airline works to resume normal traffic, the company said.

REHIRING PILOTS

SAS said the agreement with pilots involved higher productivity, increased flexibility in seasonal capacity and a commitment, as operations ramp up until 2024, to rehire 450 pilots laid off during the pandemic.

A key demand from unions had been that the laid-off pilots be rehired and shouldn't have to compete with external applicants for jobs with less attractive terms at newly started subsidiaries SAS Link and Ireland-based SAS Connect.

"450 pilots who were laid off during the pandemic have been guaranteed re-employment, and the pilot associations' collective bargaining agreements will also apply to the new companies SAS Connect and SAS Link," Swedish Air Line Pilots Association said in a statement.

It was not immediately clear, how the new agreement would apply to pilots currently working in the subsidiaries.

"The pilots have received a guarantee that they are part of the future of SAS, and that SAS will not establish new subsidiaries on terms other than those agreed with the Danish Pilot Association," union Dansk Metal, which counts the Danish pilot union as a member, said in a statement.

The deal will allow the airline to finalise plans in the next few weeks to raise $700 million of fresh financing needed to see it through the bankruptcy protection process, the company said.

SAS added the final deal remained subject to approval by unions and a U.S. federal court. It expected to receive that approval within a few weeks.

The U.S. Chapter 11 bankruptcy protection process is expected to last for nine to 12 months, the airline has said previously.