The 5 1/2 year agreement will also allow SAS to move ahead with financing talks after it filed for bankruptcy protection in the US earlier in July, the carrier said in a statement. It expects to finalize the funding process within a few weeks.
“We now have come to an agreement with all four pilot unions for SAS Scandinavia and the strike has ended,” SAS Chief Executive Officer Anko van der Werff said. “Finally, we can resume normal operations and fly our customers on their much longed-for summer holidays.”
Van der Werff last week described the walkout as “devastating.” The airline estimates that the strike cost it up to 130 million Swedish kronor ($12.5 million) a day in lost revenue and costs. About 3,700 flights were canceled, affecting some 380,000 passengers.
SAS said the agreement with unions includes costs savings related to pilots’ terms and conditions as the carrier looks to cut annual costs by 7.5 billion kronor. Pilots have agreed to withdraw litigation against the airline, according to the statement.
The carrier said it would rehire 450 pilots as it ramps up operations. The agreements are subject to approval by union members as well as a US federal court because SAS is undergoing financial restructuring.
Airlines globally have struggled with labor issues as a faster-than-expected recovery in travel has exposed staff shortages after many workers were laid off during the pandemic. That’s given disgruntled staff more power to make demands, just as the peak summer vacation period arrives.
SAS is in negotiations with investors over bridge financing of up to $700 million as well as a $3 billion restructuring of its balance sheet involving new equity and the conversion of existing debt into shares.
“The pilot talks were just one of the pieces in the puzzle that management is working on to save SAS,” Jacob Pedersen, head of equity research at Sydbank, said in a note. “We expect that the new deal will keep potential investors interested.”
The Swedish and Danish governments each have a 21.8% stake in the airline. While the Danish government said it is open to adding to its holdings, Sweden’s government indicated it will accept a conversion of debt into equity but that contributing new capital is not an option.
Some traffic disruption will continue in the coming days as normal traffic is resumed, SAS said.