Unions succumb to SAS reform


SAS chief Rickard Gustafson ponders the future of the independent airline. Image: Reuters

Scandinavian Airlines’ (SAS) future is still uncertain, even though unions have finally agreed to wage reductions and job cuts as part of the recently-approved 4Excellence Next Generation recovery plan.

The deadline for employee union negotiations was Sunday but deliberations continued through the night, according to Reuters.

Although implementation of the new cost-cutting strategy is underway, analysts have questioned the likelihood of SAS continuing as an independent carrier.

“Although they are lowering their costs by 3 billion crowns, they will still be a high-cost company,” Arctic Securities analyst Kenneth Sivertsen said.

“I think they will be taken over. As a stand-alone company they will be squeezed between low-cost airlines and the huge flight carriers, such as Lufthansa and Air France.”

SAS has recognised that employees will suffer financially as part of the 4Excellence campaign.

“These were very big sacrifices… we now have a plan for long-term profitability. We have built a strong base,” SAS chief executive Rickard Gustafson said.

SAS negotiations garnered support from all eight employee unions, while parliamentary approval will be required for the government and banks to approve a 3.5 billion kroner loan.

“We have made big concessions in this agreement. We are not very happy, but we felt we had no other choice but to sign to secure the jobs and the company,” Norwegian Cabin Union deputy leader Espen Pettersen said.

The Next Generation recovery campaign aims to improve overall cost flexibility by providing new union agreements for personnel, centralising administrative functions, reducing compensation to market levels, outsourcing call centres and ground handling and altering pension terms.

SAS has not reported how long its cash roll would last if the loan approval was not granted.

Source = e-Travel Blackboard: P.T
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