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- Pilot strike grounding hundreds of flights
- SAS to start Chapter 11 proceedings in New York
- Airline expects Chapter 11 to allow restructuring
- SAS shares slide 11% just after deep losses this 7 days
STOCKHOLM/COPENHAGEN, July 7 (Reuters) – Hundreds of SAS (SAS.ST) flights were cancelled on Thursday as the airline wrestled with a strike by pilots at its major SAS Scandinavia arm, overshadowing a traffic surge all through June.
Talks in between the airline and pilots more than a new collective bargaining agreement collapsed on Monday, prompting a strike which adds to travel chaos in Europe and deepens the economic disaster at SAS, which approximated it would floor half its flights.
The troubled airline, whose most significant entrepreneurs are the Swedish and the Danish states, submitted for Chapter 11 individual bankruptcy protection in the United States on Tuesday.
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SAS on Thursday produced its 1st look in U.S. personal bankruptcy courtroom in Manhattan, where by it gained permission to preserve program enterprise functions this sort of as honoring gas source contracts and paying staff wages. SAS expects the U.S. individual bankruptcy procedure to take among 9 and 12 months. go through additional
Tuesday’s site visitors figures highlighted what SAS was now missing in the peak summer time interval, with the airline flying 1.9 million passengers in June, a 220% maximize on the year.
Information from flight tracker FlightAware showed 202 flights, 66% of the airline’s everyday whole, were being cancelled on Thursday.
The Swedish pilots union claimed that the pilot associations had proposed generating an exception for numerous weeks to SAS in purchase to repatriate stranded constitution passengers.
Charter corporations have warned 1000’s of persons could be stranded unless a remedy for their return flights, which were due to be operated by SAS, could be arrived at.
“Some of our destinations are inaccessible and lack other alternatives for tourists to get house,” the union stated in a statement, introducing that it was extending “a helping hand”.
SAS did not straight away reply to a request for remark.
The airline’s stock has lost a lot more than a quarter of its benefit given that the strike started and has tumbled far more than 60% due to the fact the commence of the calendar year as the Ukraine conflict disrupted Asian routes and the menace of strike motion clouded the outlook.
Shares in SAS, which has struggled with a large charge foundation relative to very low-fare rivals, shut down 11% on Thursday.
SAS has reported the strike will charge it $10 million to $13 million for each day and accelerated its decision to seek bankruptcy security, which it reported will aid it speed up restructuring strategies, like deep price tag cuts, declared in February.
The placing pilots have said they would take into account pay back cuts, but cannot take SAS employing new pilots by means of two new subsidiaries, under what unions say are even worse terms.
Talks, which ended on Monday, have however to restart, although unions reported they had offered concessions.
“They must arrive back again, it is really completely insane,” Keld Baekkelund, main negotiator for the Dansk Metallic union, reported, including: “It pretty much charges additional to strike (for) a person working day than what divided us.”
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Extra reporting by Anna Ringstrom and Dietrich Knauth in New York Enhancing by Alexander Smith and Bernadette Baum
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