Scandinavia Air Grounds Most Flights After Pilots Strike

(Bloomberg) --

SAS AB was forced to abandon the bulk of the airline’s flight schedule as pilots across Scandinavia walked out over pay, disrupting travel plans for tens of thousands of people.

The shares fell more than 5 percent after some 673 domestic, European and long-haul flights were canceled on Friday. The dispute affects Scandinavian Airlines hubs in Sweden, Denmark and Norway, the airline said in statement on Friday.

SAS pilots began the action after rejecting measures proposed by a mediator in talks that have been going on since March. The Stockholm-based company said it still “wishes to continue negotiations and reach an agreement to end the strike as soon as possible.”

Read More: SAS Extends Flight Cancellations to Saturday Due to Strike

The walkout underlines the pressure facing network airlines such as SAS as they seek to bring down costs amid competition from discount rivals and Europe-wide overcapacity that’s weighing on fares. The Nordic region has become a particularly tough battleground, with Iceland’s Wow Air and leisure carrier Primera Air going out of business and Norwegian Air Shuttle ASA scrapping routes and delaying jet orders to help ease its debt burden.

“The competition is tough, and with a European economy moving at a slower pace, SAS may have to fight hard to turn a profit this year,” Jacob Pedersen, an analyst at Sydbank, wrote in a note. He lowered his recommendation on the shares to hold from buy.

The strike will hit 70 percent of flights and about 72,000 passengers, according to SAS. Services operated by partner airlines and the SAS Ireland unit are unaffected.

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