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SAS AIRLINE CRISIS: New deal saves SAS from folding

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Crisis-hit Scandinavian carrier SAS was struggling for survival Monday morning.

SAS AIRLINE CRISIS (UPDATED). Crisis-hit Scandinavian airline SAS was able to secure new agreements with all eight unions on Monday afternoon, local time, thus saving the airline from bankruptcy. The news was expected as only one union remained in negotiations with the company on Monday morning. SAS shares soared 25 percent as stock markets opened after the weekend.

In a nerv-wrecking game of late night-negotiations, SAS battled unions on the early hours of Monday to finish the agreement that would give the debt-burdened company new air under its wings. The midnight deadline for the negotiations came and went without any final deal, and on the Internet travelers expressed worries during the weekend about whether their flights would take off on Monday morning.

However, early on Monday, nothing but a few morning flights that were cancelled indicated any major problems for travelers at SAS’ main flight hubs, the airports of Copenhagen, Stockholm and Oslo.

 

SAS’ CEO Rickard Gustavson.

The SAS management’s “last call” for SAS came a week ago, when CEO Rickard Gustavson said unions had to agree to lower wages and re-negotiated pension plans in order for the airline to survive. During the week, the company and its many unions sat in multiple meetings, which eventually boiled down to a few dramatic hours on Sunday night when a complete deal was to be finished.

At last, on Monday morning, it seemed success was near when two of the eight unions, one of which was the Norwegian Cabin Crew Union (SNK), were able to sign deals with the employer. In Copenhagen, where SAS’ management and board members had gathered in the company’s headquarters, reports of joy came through local media websites.

SAS main owners are the governments of Sweden, Denmark and Norway, with Sweden being the largest owner.

 

The general feeling regarding the struggling airline earlier on Sunday, through, was more somber, with bankruptcy as a likely result if the negotiations did not produce significantly lower costs for SAS. Experts told newspaper Svenska Dagbladet on Sunday that the best option for the company would be to put it in bankruptcy anyway, with the possibility to save the profitable parts in a new company, dubbed “SAS 2.0” on the newspaper’s website.

SAS shares its fate with many European airlines, struggling with fierce competition from low cost-airlines and high costs. Multiple airlines have folded during the last few years. Earlier in 2012, the small Skyways Airlines of Sweden filed for bankruptcy, and Danish Sterling, Austria Airways, and a number of others have ended up the same way.

 

→ Check your SAS departure (Arlanda Airport, Stockholm) here

 

The editor of the Traveling Reporter works as a business news editor, and is a frequent traveler. When not doing any of that, he spends time on his boat and tries to figure out where to travel next. Two of his top destinations are the Philippines and San Francisco. Email Erik! Follow the Traveling Reporter at Stumbleupon, Tumblr, Chime In, Pinterest, Google+, Weibo, Storify, Facebook, Traveldudes, Myspace.