SAS and pilot unions unable to reach deal, talks to resume Thursday

Scandinavian airline SAS (SAS.ST) and unions representing striking pilots were unable reach a collective bargaining agreement on Wednesday, with negotiations to resume on Thursday as a crippling strike will enter its 11th day.

The 75-year old carrier was struggling even before the pandemic hit in 2020 due to high costs and growing competition from low-cost carriers.

The pilots strike, which started in July 4, cost $10 million to $13 million a day and forced SAS to cancel more 1,200 flights at the peak of the summer travel season.

“We have decided to stop tonight and we continue tomorrow,” Roger Klokset from the union representing Norwegian SAS pilots, told Norwegian daily VG.

“I am not interpreting this as anything more than it takes the time it takes. As we said, these are big, complete problems we are discussing and this takes time,” he added.

The carrier, whose main owners are the governments of Sweden and Denmark with stakes of 22% each, on Wednesday cancelled 242, or 75%, of scheduled flights, according to FlightAware.

“I can’t say what happens in the mediation but there is a reason why the parties have stayed as long as they have. We have been together for ten hours now,” SAS negotiator Marianne Hernaes told Norwegian daily Dagens Naeringsliv. “I am hopeful that we can find a solution.”

SAS last week filed for U.S. bankruptcy protection seeking breathing space to restructure its business, saying the strike had hastened the filing.

The Swedish pilots union said last week that their latest bid included pilots taking a 5% pay cut, working more hours per week, working part-time in winter with a reduced salary and foregoing summer vacation.

Unions are also demanding that pilots dismissed during the pandemic are rehired at SAS Scandinavia, rather than having to compete with external applicants for jobs at newly started SAS Link and Ireland-based SAS Connect.

In addition to affecting hundreds of thousands of travellers, the strike is putting stress on Northern Norway’s health system as staff have not been able to fly in on time for some surgeries.

Norwegian authorities can stop a strike if they believe it poses an acute danger to life and health. On Tuesday, they said the strike did not pose such a risk.

SAS shares closed 9% higher on Wednesday but are down 48% this year.