SAS in talks with unions amid “fight for survival”

In his first interview with Danish media since becoming chief executive of SAS Scandinavian Airlines (SK, Copenhagen Kastrup) this summer, Anko van der Werff has told the online news site Finans that the Covid-hit carrier has launched talk with unions to discuss further cost cuts and greater flexibility.

“SAS is fighting to survive. When I see how the market is now, how our customers are changing, and the size of our debt, it is completely clear,” he told Finans, which is run by the newspaper Jyllands-Posten. “The biggest problem for SAS is costs, so that’s where we have to start. Other airlines have cut costs and can fly more flexibly and efficiently. We need to be able to do that too.”

The deadline for the negotiations to ensure “flexibility, efficiencies, and lower costs” among the airline’s high-cost Scandinavian personnel comparative to its competitors is three months.

The slump in business travel, with expectations that it may not recover for the foreseeable future as many meetings continue to be held online, is another major challenge for SAS, as such travellers have been a key market for the carrier, van der Werff said.

“This requires understanding and willingness from everyone, and the negotiations have a purpose. SAS must be competitive so that we can survive, grow, and create jobs. I want to do this with the unions, but it takes two to tango,” he said. After the three months are up, “I need to know where we stand.”

The summons comes as pilots and cabin crew have been demonstrating in recent weeks against SAS establishing new production platforms – SAS Connect and SAS Link – with less-costly contracts, under which redundant employees no longer automatically have the right to be reemployed.

“I understand that many want to return to the world the way it was. It just doesn’t exist anymore and it will not come back. Other companies have been successful with several platforms, and that will also work for SAS,” van der Werff stressed.

During the pandemic, the Swedish-Danish-Norwegian flag carrier has had to take on debts and liabilities equivalent to SEK27 billion Swedish kronor (USD3.14 billion), according to Finans, and this will weigh on the company for many years to come. Most recently, it included further support from the governments of Sweden and Denmark, its two biggest shareholders, which provided a SEK3 billion (USD350 million) credit line.

“We are not going to make money in 2022 and we will also have challenges with 2023,” the chief executive said. “The pandemic will have an effect for at least three to four years, and that underlines the importance of us changing.”

Henrik Thyregod, chairman of the Danish Pilot Association and deputy chairman of the SAS Pilot Group, told Finans that he also wants to find a solution “but the challenges must be solved with the pilots and cabin crew that SAS has laid off and promised reemployment. It is completely wrong of SAS to sign agreements in secret with a third party and hire others than those terminated.”

He pointed to a recent Eurocontrol forecast that European air traffic would fully recover in 2023, adding: “In reality, no one knows if businesspeople will return to the planes, so the picture is not quite as gloomy as it is painted.”