SAS Reaches Deal With Pilots to End Seven-Day Labor Conflict

(Bloomberg) --

Scandinavian Airlines operator SAS AB reached a deal with pilot unions to end a seven-day strike that left hundreds of thousands of customers in the lurch and may have wiped out profit for the Nordic carrier this year.

SAS and the Danish, Norwegian and Swedish pilots agreed on a new three-year wage and labor deal late on Thursday after two days of mediation in Oslo, it said in a statement. The agreements "concern predictability of scheduling, job security and salaries" and also saw the reintroduction of previously canceled agreements about collaboration and career paths. The pilots will now resume their work, with traffic expected to normalize in the next few days.

The strike that started on April 26 disrupted some 4,000 flights and affected more than 350,000 passengers. SAS Chairman Carsten Dilling told newspaper Jyllands-Posten that investors need to brace for the possibility that the company won’t generate a profit this year because of the strike, while Norwegian lender DNB ASA has estimated that the conflict could cost SAS between 75 million kronor ($7.8 million) and 100 million kronor a day.

SAS has now agreed to wage increases for the pilots of 3.5 percent in 2019, 3 percent in 2020 and 4 percent in 2021, according to the Swedish Air Line Pilots Association. The pilots had demanded a raise of 13 percent but said what has been most important for them in the negotiations has been job security and predictable working hours. The terms of the Swedish three-year agreement are on par with the industrial benchmark for the Swedish labor market, SAS said.

"SAS operates in a highly competitive market and with these agreements we now need to intensify our work to build a long-term profitable and sustainable SAS," Chief Executive Officer Rickard Gustafson said in the statement.

The airline said it’s too early to provide an estimate of the financial effects of the strike, but will provide details in its second-quarter report on May 28.

To contact the reporters on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net;Sveinung Sleire in Oslo at ssleire1@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

©2019 Bloomberg L.P.