SAS Files Chapter 11
 

SAS has formally filed for Chapter 11 Bankruptcy today through the U.S. court system. Even though a foreign company, as long as they have an official office within the United States, they can avail themselves of the U.S. Chapter 11 bankruptcy process. SAS has been hampered by a high cost structure and yesterday the pilots of SAS Scandinavia (as opposed to the pilots of SAS Connect, SAS Link, and the affiliate companies such as Cityjet) went on strike.

https://live.euronext.com/en/node/11066450

I saw today that after the 15 day strike, the pilots and company reached an agreement. The article I read didn't have much in the way of details; it only said the company agreed to rehire the furloughed pilots back to mainline. What else is in the deal?

All pilots employed at SAS, SAS Connect*, and SAS Link, are now integrated in to the SAS seniority list and covered under the new SPG agreement. Pilots across all platforms will now be able to bid all available positions within all three companies based on systemwide seniority. The remaining unemployed SAS pilots will now be offered available positions within either of the three companies, and be covered under the one union agreement. More details expected within a few days as the agreement is not official until voted on by the four unions which make up the SAS Pilot Group.

*(SAS Connect is formerly SAS Ireland. Crews based in LHR are employed by CAE on a contract basis. SAS Connect crews based in CPH and ARN are employed by the SAS group and are now brought fully in to the SAS pilot group. LHR crews will not be covered under the agreement, and cannot bid across all SAS group flying.)

So as far as the pilots and bidding are concerned, they're all essentially one company now?

What about pay and QOL?

From a pilot group perspective, yes, with the exception of the LHR based pilots who are contracted from CAE. There have not been any details about how the LHR pilots will be handled, so that is the big question mark right now. The LHR base has been stable in size since prior to the pandemic, so the thinking is that base is essentially frozen for now, with at least no growth. There were two main issues that SAS pilots were upset about, and rightfully so. First, that SAS Connect and SAS Link were being used to undercut the collective bargaining agreement, which they clearly were. The second was that despite the union agreement that furloughed SAS pilots were guaranteed jobs back at SAS, they were instead having to compete with non SAS pilots for jobs at Connect and Link, and under worse terms and conditions. So the strike, and the new agreement eliminates both of those issues, and guarantees jobs for the furloughed SAS pilots back within the SAS pilot group based upon their seniority. Laws in the Scandinavian countries prevent people already hired at SAS Connect and SAS Link from being terminated or downgraded, so even with lower seniority, those pilots are protected in their current seats. Bidding for any future openings or vacancies will based on systemwide seniority. But basically a newly hired direct entry A320 captain at SAS Connect is protected in his or her seat and base and is now a part of the SAS pilot seniority list and working under the terms of the new CBA.

Regarding full terms and conditions, the unions will put out all details next week so members can vote. But what has been divulged so far is that there is an across the board 5% pay cut for all pilots, but with increases in production allowed by the CBA, it can effectively be up to a 25% pay cut. It also introduces pretty severe restrictions on summer vacation. For the SAS Main pilots, this new CBA represents worse terms and conditions. For the pilots at SAS Connect and SAS Link, this generally represents an improvement in terms and conditions.

SAS has been in pretty significant trouble for several years now, hence the chapter 11 filing. Like many of the European legacy airlines, they existed for most of their history as monopolies, and developed a very bloated and top heavy corporate structure. SAS has been kind of a late comer to feeling the pressure from outside competition from other airlines, particularly the LCCs. But over the past decade, the competition within Scandinavia has increased dramatically. Norwegian has grown significantly in Oslo, Stockholm, and Copenhagen, and then its long haul experiment really hurt SAS. Although long haul is gone, Norwegian is still a sizable and formidable competitor for SAS within the European short haul market. Stockholm has been particularly difficult, with Ryanair expanding rapidly over the last few years, and Finnair setting up a secondary hub in Stockholm, even with long haul flights. Eurowings has also expanded rapidly in Stockholm and has launched a large recruitment campaign. So SAS needs a major overhaul if it is going to survive.

SAS is headed down the same path Alitalia did. Their hub structure is extremely inefficient and they need to do some serious reimagining if they want to survive without government help.

"Run by the Swedes, funded by Norwegians, to benefit the Danish".