COPENHAGEN, Denmark (AP) — Scandinavian Airlines on Tuesday submitted for personal bankruptcy in the United States, warning a walkout by 1,000 pilots a working day before had place the upcoming of the carrier at possibility.
The move provides to the probability of vacation chaos throughout Europe as the summer season vacation time period commences.
The Stockholm-centered SAS airline team reported it had “voluntarily filed for Chapter 11 in the U.S., a legal method for monetary restructuring executed under U.S. federal court supervision.”
Submitting for Chapter 11 in New York places civil litigation on maintain though the company reorganizes its funds.
SAS claimed that its operations and flight timetable will be unaffected by the announcement.
CEO Anko van der Werff explained that the pilots’ strike accelerated the shift. “I feel we have been really crystal clear that this could occur,” he claimed.
“The important matter is that this is about bankruptcy defense, it is not about a personal bankruptcy, but it is about fiscal reconstruction,” van der Werff mentioned.
The carrier claimed it is “in well sophisticated discussions with a range of possible loan companies … to help its functions all through this court-supervised method.”
A rescue prepare introduced in February was aimed at securing prolonged-phrase competitiveness. SAS shares dropped far more than 9% to .56 kronor ($.05) on Tuesday.
The pilots reacted strongly to the information of the Chapter 11 submitting. Roger Klokset, head of the SAS pilots union, explained the group “had stretched negotiations and mediation from November previous yr right until the working day before the application, devoid of at any time owning the intention of moving into into an arrangement with the SAS pilots.”
The pilots in Denmark, Sweden and Norway walked out on Monday, citing inadequate pay and functioning ailments and expressing dissatisfaction with the conclusion by the carrier to retain the services of new pilots to fill vacancies at its subsidiary airlines, SAS Website link and SAS Connect, fairly than rehire former pilots who were laid off owing to the pandemic.
Van der Werff explained the strike was “devastating for SAS and puts the company’s future jointly with the positions of countless numbers of colleagues at stake.”
The walkout is believed to guide to the cancellation of around 50% of all scheduled SAS flights and impact close to 30,000 travellers per working day. Flights operated by SAS Backlink, SAS Connect and SAS’ exterior partners are not influenced.
The airline is part-owned by the governments of Sweden and Denmark. In 2018, Norway marketed its stake but holds credit card debt in the airline, and has reported it may be ready to convert that into fairness.
“Right now, it is tricky to assess the importance of the Chapter 11 request for duration of the pilot strike,” chief analyst Jacob Pedersen of Denmark’s Sydbank said. On the other hand, “it’s doubtful no matter if it will bring (the pilots) again to the negotiating table.”
The transfer by SAS was “not surprising” but came “faster than we anticipated,” Pedersen reported in an examination. “Although SAS is now under personal bankruptcy protection, it is not a seaside vacation for the firm.”
Jari Tanner in Helsinki contributed to this report.
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