Wage talks between Scandinavian airlineSASand its pilots broke down today, sparking a strike that put the airline's future in jeopardy and intensified travel across Europe as the peak summer season begins confusion.
The action is the first major airline strike to take place as the industry seeks to capitalize on the first full post-pandemic rebound in leisure travel.
Months of bickering between staff and management have been ongoing as the airline tries to recover from the impact of the lockdown without taking on costs it believes cannot compete with lower-cost rivals.
Meanwhile, workers across Europe are battling soaring living costs and are demanding pay rises.
Sydbank analyst Jacob Pedersen calculated that the strike could costSASaround DKK 800-90 million ($11.2 million to $12.6 million) a day, and the company's ticket sales for future flights would be affected.
"! A strike at this time is devastating forSASand puts the company's future and the jobs of thousands of colleagues at risk," SAS Chief Executive Anko van der Werff said in a statement.
"The decision to strike now demonstrates the reckless behaviour of the pilots union and an alarmingly low understanding of the critical situation SAS is in."
Union leaders blamed SAS.
"We finally realized that SAS didn't want to make a deal," Martin Lindgren, chairman of the SAS Pilot Group, told reporters."SAS wants to strike."
Lindgren said the pilots were ready to resume talks, but called on employers to change their stance.
"We hope we can get back to the negotiating table to meet, but that will require action from employers," he said.
Nearly 1,000 pilots in Denmark, Sweden and Norway will join the strike, the union said, in one of the largest strikes by airline workers since British Airways pilots grounded most of the airline's flights over a pay dispute in 2019 .
Further disruptions loomed in June as British Airways staff at London's Heathrow Airport voted to strike, threatening disruption at one of Europe's busiest aviation hubs.
In addition, Spanish crews at Ryanair and easyJet plan to strike this month to demand better working conditions, and staff at Paris-Charles de Gaulle airport stopped work over the weekend, forcing the cancellation of about 10% of flights.
Loss-making SAS is looking to restructure its business by slashing costs, raising cash and converting debt into equity.
"It's all about finding investors. How exactly did the strike help find and attract investors during the busiest week in the past 2.5 years?" Van der Werf told reporters.
It is estimated that the strike will result in the cancellation of around 50% of scheduled SAS flights, affecting around 30,000 passengers per day.
Part-owned by the Swedish and Danish governments, the airline averaged 58,000 passengers a day last month.It serves destinations in Asia, Europe and the United States.
Denmark has offered to inject more cash and write off debt on condition that the airline also attracts private investors, while Sweden has refused to inject more.
Norway sold its stake in 2018 but still holds the airline's debt and has said it may be willing to convert the debt into equity.
Sweden's industry minister did not immediately respond to a request for comment.
Danish Finance Minister Nicolai Wammen said in emailed comments to Reuters he hoped the parties would reach a solution soon.
"The collective agreement issue is between SAS management and SAS employees and their organization," he said.
The collective agreement between the airline and the SAS Pilot Group union expired on April 1.Months of negotiations that began last November failed to reach a new deal.
SAS' decision to hire new pilots through two new subsidiaries, Connect and Link, rather than first rehire former employees who were laid off during the pandemic, when almost half of SAS' pilots lost their jobs, angered pilots.
The strike will include all pilots at parent company SAS Scandinavia, but not Link and Connect, a union that organizes 260 pilots attached to two units.
It also won't affect SAS' external partners Xfly, Cityjet and Airbaltic, the company said.
The company has already cancelled many flights ahead of the summer, part of a broader trend in Europe that, in addition to the upheaval in strike action, has seen operators react to staff shortages caused by slow rehiring in the wake of the pandemic.
