SAS threatened by crew conflict

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Long-troubled Scandinavian Airlines (SAS) now appears threatened by conflicts within its own ranks of flight attendants. Those based in Norway and Sweden fear demands made by their Danish colleagues can be “fatal” for the airline, and some analysts agree.

SAS is trying to get off the ground. PHOTO: SAS

Newspaper Aftenposten reports that the Danish flight attendants’ union CAU seems to be backing out of an agreement signed by all airborne employees in SAS that they will jointly cut costs by SEK 500 million. The cuts are crucial for the success of a planned new stock issue aimed at saving the airline from bankruptcy.

Norway’s minister for business and trade, Trond Giske, has made it clear that the Norwegian state won’t contribute NOK 575 million in new capital for the stock issue unless the cost cuts are in place.

The cuts, he told news bureau NTB last month, “will be tough for (the employees), but it’s much tougher to lose your job.” Giske said the cuts must be agreed quickly “because this is a condition for our participation in the stock issue.”

Now the Danish flight attendants are demanding protection of their own jobs. They only want Danish flight attendants to be able to work from SAS’ hub at Kastrup Airport in Copenhagen.

That’s infuriated their Swedish and Norwegian colleagues. “The 1,000 flight attendants in CAU are holding 15,000 other employees as hostage,” fumed the leader of the Norwegian flight attendants union NKF. “And in a setting where we all have said we’ll work together to face the future best prepared to meet the competition.”

‘Entire stock issue in danger’
Hans Erik Jacobsen, an analyst at First Securities, told Aftenposten the conflict among SAS’ unions may permanently ground the airline, which long has suffered from the high costs of their unions, a series of strikes and inability to meet the competition from low-cost, low-fare airlines.

“This can put the entire stock issue in danger and lead to dissolution of the company,” Jacobsen said. “Either the union has to give up its demand, or the state must accept that not all employees will contribute to the cost cuts and supply new capital anyway.” The lack of cost-cutting will make it difficult if not impossible to attract new capital from private investors.

SAS announced heavy losses in February and has struggled to retain passengers in the face of competition from low-fare airlines. By contrast, Norwegian Air, for example, has been flying high, and rival Finnair just reported passenger growth on its flights from Norway in February.

Views and News from Norway/Nina Berglund

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