Scandinavian Airlines System (SAS) has called its pilots to return to the negotiating table, so both parties can continue talking and reach an agreement. Earlier this week, the carrier filed for Chapter 11 bankruptcy protection in the US after the pilots voted in favor of strike action.
Back to negotiating
This week, SAS has become the latest airline to file for a Chapter 11 proceeding in the United States. The airline has cited material concerns regarding the impact of its pilots’ recently-announced strike, which it says “has a negative impact on the liquidity and financial position of the Company.” According to certain analysts, this strike could have prompted SAS to go bankrupt.
Nonetheless, since the Chapter 11 was announced, neither part has returned to the negotiating tables.
In an interview with the Swedish newspaper Dagens Nyheter, SAS CEO Anko van der Werff, said he couldn’t explain why the negotiating rooms were still empty. He added,
“To be honest, I’m not entirely sure. I think what has to happen is a shift in the positions (of everyone involved).”
In recent days, SAS pilots pointed out that the airline never wanted to reach an agreement and that the strike was the excuse the management needed to justify the Chapter 11 filing.
Anko van der Werff said these accusations are not true and that the Chapter 11 proceedings were always in the plans of the project SAS FORWARD.
SAS FORWARD is a program that looks to implement measures aimed at securing the long-term competitiveness of the airline.
SAS has called its pilots to return to the negotiating table. Photo: Getty Images
Helping stranded passengers
In the midst of the negotiations and strikes by SAS pilots, the pilot unions have offered the airline an exemption to pick up charter passengers from certain vulnerable destinations.
This exemption is for a couple of weeks to address the urgent crisis, and the pilots will not fly any new passengers to these destinations as they risk being put in the same difficult situation.
Martin Lindgren, President of SAS Pilot Group, said,
“We feel a great responsibility towards our passengers. We understand that it is inevitable that our passengers will be affected by a strike, but we pilots are always focused on behaving responsibly with passenger safety as our top priority.”
Earlier this week, SAS filed for a Chapter 11 bankruptcy proceedings. Photo: Getty Images
SAS FORWARD and Chapter 11
The SAS FORWARD plan includes a US$720 million reduction in annual costs and a widespread transformation of the airline’s fleet and digital operations.
This plan also looks to raise at least US$903 million in new equity capital as well as reduce or convert nearly US$2 billion of debt into common equity.
To achieve this, the airline filed for a Chapter 11 bankruptcy in the United States.
A Chapter 11 bankruptcy is known as a reorganization bankruptcy because the company is allowed to continue operating while restructuring its debts over a period of time. This means the airline does not go into liquidation and does not disappear. Moreover, this proceeding allows a non-US company to reorganize in the United States as long as they have a place of business or property in this country. SAS operates around 57 weekly flights from Stockholm, Copenhagen, and Oslo to the United States.
What do you think about SAS’s current Chapter 11 process and its negotiations with pilots? Let us know in the comments below.
Source: Dagens Nyheter.