LDN - Business

SAS pilots strike, travel plans of 170,000 passengers at risk

[April 26, 2019] OSLO/COPENHAGEN/
STOCKHOLM (Reuters) - SAS pilots in Norway, Sweden and Denmark went on strike on Friday as wage talks broke down, threatening the travel plans of some 170,000 passengers over the weekend.

The airline canceled around 70 percent of its flights on Friday and Saturday.

SAS is in the midst of renewing an ageing fleet after spending years cutting costs in the face of competition from budget carriers such as Norwegian Air Shuttle and Ryanair.

At airports across Scandinavia stranded passengers were queuing at SAS counters to get help.

"This strike delays everything," said Mexican tourist Carmen Sosa, 50, who was stranded at Oslo's Gardermoen airport.

SAS, whose shares traded 4.7 percent lower in Stockholm on Friday, said it hoped to resume negotiations and reach an agreement as soon as possible.

"As a consequence of the strike, domestic, European and long-haul flights have been canceled, and thousands of travelers will be affected," it said in a statement.

SAS said it was prepared to continue to negotiate, but that if the pilots' requirements were to be met, they would have "very negative consequences" for the company.

Analysts at Sydbank expect the strike to cost SAS 60-80 million Swedish crowns ($6.3-$8.4 million) per day. The strike would wipe out an expected net profit for the year if it lasts for two weeks, they said.

"The SAS pilots' strike is surprising to us and makes it clear that SAS is more vulnerable than we previously expected," Sydbank analysts said.

Labor unions this month called for 1,500 SAS pilots to go on strike on Friday if no agreement was reached on wages and other issues after an earlier round of talks failed.

In total, 1,409 pilots across the three countries went on strike on Friday.

"The strike could have been avoided, if SAS had shown a real willingness to meet us halfway," said Rene Arpe, chairman of the Danish pilot union.

"Instead, we see a SAS management that thinks their employees must accept worse working conditions, unpredictable working hours and insecurity about their jobs," Arpe said.

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Press manager at SAS in Denmark Mariam Skovfoged is seen as SAS pilots go on strike at Copenhagen Airport in Kastrup, Denmark April 26, 2019. Philip Davali/Ritzau Scanpix via REUTERS

The aviation industry's employer body in Sweden said pilots held onto their "extreme wage claims", demanding a 13 percent wage increase despite what it calls already high average wages of 93,000 Swedish crowns ($9,759.89) a month.

"We had wished that the pilots had taken a greater responsibility in this situation," said Torbjörn Granevärn, head of negotiation at the Swedish Confederation for Transport Enterprises.

The strike does not affect flights operated by SAS partners, which make up approximately 30 percent of all departures, the airline said.

The SAS Pilot Group, a union representing 95 percent of the airline's pilots in Denmark, Norway and Sweden, said in a statement it had tried to gain greater transparency about working hours.

Most pilots don't have fixed schedules and in some situations risk working seven weekends in a row, the group said, adding that pilots were prepared for a "prolonged" strike.

Close to bankruptcy in 2012, SAS was forced to sell assets and cut wages and thousands of jobs in return for a life-saving credit facility. It has posted a net profit in each of the last four years.

But fuel costs are rising in line with crude prices and European airlines face continued overcapacity and currency volatility, factors that have toppled several smaller players in the past year.

Labor tensions have also risen in the past two years as the industry faces a global pilot shortage.

That has bolstered pilots' bargaining power, as seen at other airlines including Ryanair, Lufthansa and Air France.

(Reporting by Terje Solsvik and Gwladys Fouche in Oslo, Jacob Gronholt-Pedersen in Copenhagen and Esha Vaish in Stockholm; editing by Jason Neely)

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