Employees come to terms with SAS

Bookmark and Share

Financially strapped Scandinavian Airlines (SAS) announced Friday that it has come to terms with its employees’ labour unions after they agreed to slash pay and benefits in another round of major cost cutting. The Danish flight attendants’ union CAU also went along, ending a conflict that had threatened to sink SAS’ entire bailout plan.

SAS flight attendants agreed to cost-cutting. PHOTO: SAS

SAS executives were full of praise for the flight attendants and pilots, who will give up pay and retirement benefits valued at SEK 500 million a year. It was the only way, SAS officials had claimed, to keep the airline flying in the face of tough competition from cut-rate carriers.

The employee cost cuts were also a condition for a new stock issue for SAS aimed at raising SEK 5 billion in fresh capital for the airline. SAS’ owners, including the governments of all three Scandinavian countries, had refused to go along with the bailout unless employees also agreed to make themselves less expensive.

The agreement involved four labour organizations representing flight attendants and the four unions representing pilots. The Danish flight attendants’ union CAU, however, had balked at the deal, initially saying they were willing to absorb their share of the cost cuts but only if Danish jobs would be protected.

That infuriated their fellow unions who claimed the Danes were threatening the future of the airline itself. Details remained unclear but in the end, the Danes went along even though a union spokesman claimed they did win the job security they sought.

There still seemed to be bad blood among the various unions, though, with a Danish union spokesman telling Norwegian Broadcasting (NRK) Friday morning that the other unions failed to show any signs of solidarity with the Danes’ concerns. The Norwegian union had accused the Danes of the same thing.

Jon Lyng, leader of the Norwegian cabin crews on SAS (Norsk Kabinforening), nonetheless said it was “a joyful day” for SAS. “Everyone has gone along with the savings plan as agreed,” Lyng told news bureau NTB. “Now it’s up to the owners and the management to continue work on an offensive business plan. We support that fully.”

All told, SAS’ employees have agreed to cost cuts totalling SEK 2.1 billion in the past two years. The Norwegian government will contribute about NOK 500 million to SAS’ new stock issue.

Views and News from Norway/Nina Berglund

Join our Forum if you’d like to comment on this story.