SAS says as of today, the strike has so far caused over 2,550 flight cancellations which have affected over 270,000 passengers and it believes the estimated financial effect of the strike is up to SEK 130 million per day or roughly SEK 1.0-1.3 billion in costs so far.
The strikes threaten the ability of SAS to successfully raise critically needed near-term and long-term capital to fund the Company’s successful reorganization. Last week, SAS said it had sufficient liquidity for its needs in the short term, however, today it warned that a prolonged strike would quickly erode its limited cash reserves.
The airline is further blaming the striking staff for potentially putting its debtor-in-possession (“DIP”) financing at risk. In such an event, the SAS will need to consider selling valuable strategic assets under duress while also radically downsizing SAS’s operations and fleet. Once those actions are taken, it will be difficult for SAS to rebuild back the size and breadth of its current network and services.
“We deeply regret that our customers are affected by the strike, leading to delays and cancelled flights. The strike also has a severe impact on our possibilities to succeed with SAS FORWARD. We must reach an agreement and end the strike as soon as possible. That will require us to find us a solution that is acceptable to all stakeholders that have expressed their intention to support SAS, conditioned on the Company succeeding with SAS FORWARD. The strike is putting the success of the chapter 11 process and, ultimately, the survival of the Company at stake,” says Anko van der Werff, President & CEO.
Erno Hildén, Executive Vice President and CFO, adds: “Since February 1, 2020 (the quarter when the pandemic started) through April 30, 2022, losses amounted to a total of SEK 19.7 billion (earnings before tax). The current pilot strike, with the consequential liquidity drain, amplifies the already dire situation. Progressing SAS FORWARD is essential in order for SAS to survive and to make the Company strong and investable again”.
The unions have already made concessions, including approving limited wage cuts and had said the talk are ongoing, but that "Hope of a successful resolution is becoming more distant."
