UPDATED: SAS warns survival at stake as pilots strike over wages

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STOCKHOLM, July 4 (Reuters) – Wage talks between Scandinavian airline SAS  and its pilots collapsed on Monday, triggering a strike that puts the future of the carrier at risk as the summer vacation period begins.

After months of acrimony between employers and unions across Europe, the action is the first major airline strike to hit when the industry is seeking to capitalise on the first full rebound in leisure travel following the pandemic.

“This is very bad news,” SAS CEO Anko van der Werff told reporters.

A strike could cost SAS some 80 million to 90 million Danish crowns ($11.2 million-$12.6 million) per day, Sydbank analyst Jacob Pedersen calculated, and the company’s ticket sales for future flights will suffer. Shares in SAS fell 7% by 1128 GMT.

“A strike at this point is devastating for SAS and puts the company’s future, together with the jobs of thousands of colleagues, at stake,” the airline said.

Close to 1,000 pilots in Denmark, Sweden and Norway will join the strike, according to the unions. 

“We blame this on SAS. We have finally realised that SAS doesn’t want an agreement,” SAS Pilot Group chairman Martin Lindgren told reporters. “SAS wants a strike.”

Loss-making SAS is seeking to restructure its business by undertaking large cost cuts, raising cash and converting debt to equity. 

It estimated the strike would to lead to the cancellation of around 50% of scheduled SAS flights and impact around 30,000 passengers per day.

The carrier last month averaged 58,000 passengers per day and serves destinations in Asia, Europe and the United States.

Union leaders and management have negotiated since November and the collective agreement between the airline and the SAS Pilot Group union expired on April 1.

Pilots were angered by SAS’ decision to hire new pilots through two new subsidiaries – Connect and Link – instead of first rehiring former employees dismissed during the pandemic, when almost half of its pilots lost their jobs.

A strike would include all pilots from parent company SAS Scandinavia, but not Link and Connect, a union that organises the 260 pilots attached to the two units. Neither would it affect SAS’ external partners Xfly, Cityjet and Airbaltic, the company has said.

(Reporting by Anna Ringstrom; editing by Niklas Pollard)

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