SAS aims for final union deal in survival fight



Reuters

Published — Tuesday 20 November 2012

Last update 20 November 2012 2:04 am

| نسخة PDF Print News | A A

COPENHAGEN/STOCKHOLM: Scandinavian airline SAS yesterday sought a deal with the last union opposing its plans for severe cost cuts aimed at avoiding bankruptcy and securing the airline's long-term future.
SAS, half owned by the governments of Sweden, Denmark and Norway, said it had secured a deal with seven of eight unions on wage cuts, working schedule changes and pensions and had only the cabin crew union of Denmark to go.
The airline, hit by competition from lower-price rivals, last week announced plans to cut some salaries by up to 17 percent and lower overall staff to about 9,000 from 15,000 as it shrinks its business. That prompted media speculation SAS faced bankruptcy if it failed to get unions to agree to the cuts.
But even if a deal is reached, analysts have questioned whether the airline can survive on its own in the long term as it faces competition from Ryanair and regional rival Norwegian Air Shuttle, both of which have lower operating costs.
“We have successfully negotiated seven of eight collective (union) agreements, which is gratifying,” SAS Chief Executive Rickard Gustafson told journalists during talks with unions at the main airport in the Danish capital Copenhagen.
“But there remains one union and we must have it on board too. That is a condition for carrying out our plan.”
The airline needs to get agreement from all eight unions as a condition of a 3.5 billion Swedish crown ($515 million) loan from the governments and six banks.
Progress in the talks sent SAS shares soaring.
By 1024 GMT, the stock was up 25 percent at 6.95 Swedish crowns. Since the start of 2011, the stock has lost 69 percent of its value to be worth under 2 billion Swedish crowns.
Gustafson said management aimed to conclude negotiations as soon as possible.
Although the airline had set a deadline of Sunday for an agreement, talks continued all night and into Monday.
SAS has reached deals with unions for pilots from Norway, Denmark and Sweden plus unions for cabin staff in Sweden and Norway.
“It has been a very grueling process,” said Espen Pettersen, deputy leader of the main Norwegian cabin union.
“We have made big concessions in this agreement. We are not very happy, but we felt we had no other choice but to sign to secure the jobs and the company,” he added.
Raising fears of a possible bankruptcy, SAS told crews on Sunday to ensure airplanes were fully fueled to be able to return home if needed.
The airline was also giving cash to flying staff to ensure they could get access to hotels.
SAS has declined to say how long its cash would last if it failed to secure a loan.
The airline aims to reduce costs by about 3 billion Swedish crowns ($ 441.05 million) a year. In January-September it had combined payroll and other operating costs of about 30 billion crowns.
Asset sales would strengthen the balance sheet another by 3 billion crowns.

What's happening around Saudi Arabia

JEDDAH: Social media is abuzz with the news of an 80-year-old man who has been relieved of his duties after working for four decades at the Prophet’s Mosque. Citizens have launched a campaign for the man, identified as Moqtada by publishing his photo...
DAMMAM: The World Heritage Committee of the UN Educational, Scientific and Cultural Organization (UNESCO) has added the rock art in Hail to the World Heritage List. The addition was made during the committee’s 39th session in Bonn, Germany, and becam...
Huge projects change the faces of cities and great ambitions help create such projects. Madinah had its date with a quantum leap to usher in a new era of urban development. Such huge projects help achieve formidable civilization advancements and sign...
RIYADH: The Japanese ambassador to the Kingdom, Noriheiro Okoda, has held a meeting with Hashem Abdullah Yamani, president of the King Abdullah City for Atomic and Renewable Energy (K.A.CARE), and discussed bilateral cooperation in the fields of atom...
AL-BAHA: Forty three percent of Al-Baha cannot be developed easily because of the region’s mountainous terrain.This is the view of Khaled Al-Sayegh, undersecretary for construction at the municipality, who was speaking at an event held at the College...
JEDDAH: An official at the Council of Saudi Chambers said the council’s members are discussing a regulation to submit to the Ministry of Labor and other government agencies to deny a number of privileges to companies that force its labor to work unde...
ABHA: With many families wanting new furniture during Ramadan, furniture and interior decorating shops are raising prices to more than double what they were before the month.Homeowner Zaina Mohammed says she used to change her home furniture every Ra...
RIYADH: Saudi Commission for Tourism and National Heritage (SCTNH) President Prince Sultan bin Salman described the first visit by Custodian of the Two Holy Mosques King Salman to Madinah as “historic.”In his comments following the visit which saw th...
MADINAH: Economists expected the volume of investments in Madinah’s economies during the coming few years to reach SR500 billion.The forecasted growth in the population, to reach 2.6 million people after 25 years, and the number of visitors to 12.2 m...
JEDDAH: It seems that many Saudi families are gradually coming to terms with the new reality of living in apartments, as building villas is not possible due to shortage of appropriate land.With the increasing display of housing units by the Ministry...
RIYADH: Migrant rights advocacy group Migrante-Middle East (M-ME) has lambasted their country’s leadership over the claim that the number of overseas Filipino workers are declining due to sustained economic growth in the Philippines.The group has cal...
RIYADH: A charitable foundation called “Smile” will be launched on Sunday night at the Al-Hokair Land in the Saudi capital to make people happy. “The foundation will be launched to make Saudi Arabia a center of smiles,” well-known television host and...
MAKKAH: The Kingdom has seen a sharp rise in the number of Umrah pilgrims to around 6 million from 1.5 million in the last 16 years. Moreover, the number of pilgrims overstaying their visas has come down to about 1 percent. The Ministry of Haj has be...
RIYADH: The King Khalid Foundation (KKF) said here recently that it has financed small enterprises (SMEs) run by 130 widows in some of the Kingdom’s provinces.KKF hosted an iftar party last week for local media at its headquarters in Riyadh at which...
JEDDAH: Prince Abdullah bin Abdul Aziz bin Musaed, governor of the Northern Borders province, has died.He will be buried after Taraweeh prayers in Jeddah on Saturday, the Royal Court said in a statement carried by the Saudi Press Agency. No other det...

Stay Connected

Facebook