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SAS Chairman Warns Pilot Strike Sets Stage for 2019 Loss

SAS Pilot Strike Triggers Warning of Profit Downgrades Ahead

(Bloomberg) -- SAS AB may be facing a loss in 2019 as the airline company weighs up the cost of a protracted pilot strike.

The walkout, which has already disrupted the plans of hundreds of thousands of passengers, will continue into Thursday, with SAS saying it’s been forced to cancel another 280 departures across Scandinavia. The two sides were due to meet in Oslo on Wednesday to talk through their differences.

“It is positive that the parties now return to the negotiating table, it is the only way the conflict can be solved,” SAS spokeswoman Karin Nyman said in a statement. “As the parties now meet, we have the aspiration that it will lead to a constructive dialogue.”

SAS Chairman Carsten Dilling says it’s too early to estimate the full cost of the strike, but told Jyllands-Posten that investors need to brace for the possibility that the company won’t generate a profit this year. SAS has tried to curb the fallout by sending layoff notices to Norwegian cabin crew, but labor laws prevent it from doing the same in Denmark and Sweden, Jyllands-Posten reported.

Shares in SAS fell about 4.3 percent in Stockholm on Tuesday, ahead of the May 1 holiday. In Copenhagen, the only market in which SAS shares were trading on Wednesday, the stock gained about 6 percent on news of the resumed talks.

The standoff underscores the challenges facing airlines as they try to cut costs amid competition from discount rivals against a backdrop of overcapacity across Europe. 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.

Since starting late last week, the strike already looks set to have caused well over 3,000 cancellations, affecting about 350,000 passengers.

Rickard Gustafson, chief executive officer of SAS, said he is “deeply concerned that the pilot strike hasn’t been resolved and that it is continuing to affect our customers,” in a statement on Tuesday.

“The demands made by the pilots’ unions entail significant cost increases for SAS that would threaten the company’s long-term competitiveness and consequently, the jobs of all SAS’s employees,” he said.

Read More: SAS Drops After Pilot Strike Leads to Flight Cancellations

--With assistance from Hanna Hoikkala.

To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net

To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net

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