SAS has sounded a warning after negotiations with pilot unions over cost cuts broke down.
The Scandinavian airline presented an SEK7.5 billion cost-cutting plan on February 22, 2022, dubbed SAS Forward. It said that it needs all stakeholders in the company, including employees, unions, investors, lessors and shareholders, to play their part in the restructuring.
On March 29, 2022, however, SAS said pilot unions walked out of the negotiation room on the second day of talks.
“By doing so, they are putting the entire company at stake, including thousands of colleagues’ jobs and careers,” SAS commented.
The airline said that it was in a “more severe situation than ever” and could only move into the future with a plan that makes SAS more competitive.
SAS says it needs to cut costs and adapt to new travel trends, in particular that more of its revenue will come from leisure travel than business travel as a result of the COVID-19 pandemic.
Leisure travel has bounced back faster than business travel, but SAS has traditionally got over half of its business from corporate travelers. Furthermore, the airline is facing increased competition for leisure travelers from local rivals.
“We have a difficult journey in front of us, but we fully believe the SAS FORWARD plan is the right way forward to give us a solid financial platform that will ensure a strong, competitive and sustainable SAS for many years to come,” the airline concluded.
The airline has history with pilot unions in pay talks. Pilots staged seven days of strikes in 2019 after wage talks broke down, leading to over 4,000 flight cancellations and costing the company millions.
The airline also announced on March 30, 2022 that it has appointed Erno Hildén as its new chief financial officer. Finnish national Hildén has previously worked as CFO and COO at Finnair, and recently held the position of executive vice president for privatization at Saudia Airlines.
Hilden will start in April, taking over from Magnus Örnberg , who will leave during the spring after handing over the role.
“I am excited to be part of SAS FORWARD and am looking forward [to] enabling the changes necessary to secure the long-term success of SAS,” commented Hildén.
