ANALYSIS: Why is the SAS strike happening now?

The strike by SAS pilots over working conditions at the Scandinavian airline is a remarkable one, but not unexpected, according to an industry analyst.

ANALYSIS: Why is the SAS strike happening now?
Passengers waiting at Copenhagen Airport on April 26th. Photo: Philip Davali/Ritzau Scanpix

A total of 170,000 passengers are expected to be affected this weekend after SAS pilots walked off the job in Sweden, Denmark and Norway early on Friday, initially stranding 70,000 travellers as more than 600 flights were cancelled.

Although the situation is extraordinary, it has been on the cards for some time, one analyst said.

“It is remarkable, in a situation where there is a lack of pilots across Europe, that SAS has not seen loss of staff to other companies, if pilots are so dissatisfied with the package they currently have with SAS,” Jacob Pedersen, a stock market analyst with Sydbank who specializes in the aviation industry, told Danish news agency Ritzau.

“Having said that, these pilots have had to put up with an incredible amount over the last 20 years in the form of various types of cutbacks,” Pedersen added.

Over 1,400 pilots in Denmark, Norway and Sweden began striking on Friday after failing to reach a collective bargaining agreement with the company.

After negotiations broke down, members of the SAS Pilot group walked out on April 26th in all three countries. The group represents almost all (95 percent) of the airline's pilots in Scandinavia.

Salary increases are a major sticking point but the union has said that the biggest issues relate to working hours and scheduling.

The SAS Pilot group said that their salary requests are in line with the market rate, while one SAS negotiator called their requests “unreasonable and extreme”.

READ ALSO: Here's what you need to know about the SAS strike

Pedersen noted that SAS cabin crew and pilots are primarily employed under Scandinavian-style contracts agreed with unions (overenskomst in Danish and kollektivavtal in Swedish), making staff a larger overhead for SAS relative to other airlines.

The strike could have serious – and costly – consequences for SAS if the company is to meet the demands of the striking pilots, according to the industry analyst.

SAS was under considerable economic strain throughout the 2000s, but recovered after a policy of cuts was introduced in 2012.

The company has turned a profit in each of the last four years.

“SAS looks like delivering a profit again this year, but this is all propped up by the cuts the company is making,” Pedersen said.

“And if that trend comes to an end, whereby SAS can save money every year, it won’t take many quarters before SAS is once again in the red and fighting for its future,” he added.

SAS posted a net loss of 469 million Swedish kronor in the first quarter of 2019, compared to 249 million a year earlier, but forecast a full-year profit.

Sydbank on Friday predicted the strike would cost SAS 60 to 80 million kronor per day, AFP reports.

READ ALSO: Latest updates on the SAS strike

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‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers.