Scandinavian Airways (SAS) is voluntarily submitting for chapter 11 chapter safety within the US, as a strike by its pilots has grounded half of the provider’s flights as a consequence of an ongoing pay dispute.
The airline careworn that the chapter 11 transfer was a part of its monetary restructuring plan, referred to as SAS Ahead, and that it was working its schedule as regular, aside from the direct influence of the strike by pilots, which began on Monday (4 July).
SAS mentioned it may meet its enterprise obligations within the “close to time period” with a money stability of round $750 million on 30 June. However the airline warned the pilots’ strike would have a “destructive influence on the liquidity and monetary place of the corporate and, if extended, such influence may turn out to be materials”.
Carsten Dilling, chairman of SAS’s board, mentioned: “We now have been working intently with the SAS administration workforce to progress SAS Ahead. As a part of that course of, SAS has additionally been getting ready for the choice to utilise court docket restructuring proceedings with the intention to handle the corporate’s monetary scenario.
“The continued strike poses vital challenges to our capacity to succeed with our transformation. The board has concluded that authorized instruments are required to make progress in our ongoing negotiations with key stakeholders, and in the end to reach making SAS a aggressive and financially robust enterprise.”
The corporate and pilots’ unions have been locked in talks in latest weeks however these negotiations have to this point proved to achieve success resulting in the strike, which can cancel round 50 per cent of SAS’s flights and have an effect on an estimated 30,000 passengers per day.
Anko van der Werff, president and CEO, mentioned: “A strike at this level is devastating for SAS and places the corporate’s future along with the roles of hundreds of colleagues at stake.
“The choice to go on strike now demonstrates reckless behaviour from the pilots’ unions and an incredibly low understanding of the important scenario that SAS is in.”
Flights operated by SAS Hyperlink, SAS Join and exterior companions usually are not affected by the pilots’ strike.
Van der Werff mentioned of the transformation course of: “We’re making progress, however lots of work stays and the continued strike has made an already difficult scenario even more durable.
“The chapter 11 course of offers us authorized instruments to speed up our transformation, whereas with the ability to proceed to function the enterprise as common. We are going to proceed to construct again the community connectivity, merchandise and repair our clients anticipate, and we’ll proceed to take action all through this course of and past.”
Main US-based carriers have used the chapter 11 chapter safety course of to efficiently restructure their companies in latest many years.
Van der Werff careworn that SAS was “able to resume mediation as quickly as doable” with the pilots’ unions to attempt to attain “an settlement that’s viable to safe the long-term competitiveness and monetary sustainability of the corporate”.
“We presume that the SAS Scandinavia pilots’ unions realise what’s at stake and select to proceed the work to seek out an settlement,” he added.