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Wednesday, June 19, 2024

SAS in ‘crisis,’ its travellers in despair

“We are travellers,” has Scandinavian Airlines (SAS) declared in its recent promotional campaigns. SAS’ employees and not least its passengers were instead facing more spoiled travel plans and financial losses as a pilots’ strike dragged into its fifth day, for many the eve of what was supposed to be another long holiday weekend.

SAS’ chief executive Rickard Gustafson wouldn’t comment on his own recent executive pay raises, but still claims its striking pilots’ demands are impossible to meet. Thousands of SAS flights have been cancelled since the strike began Friday morning. PHOTO: SAS

With both sides digging in their heels, there’s been no progress in resolving the labour conflict that began Friday morning. SAS has cancelled nearly 3,000 flights since, stranding hundreds of thousands of passengers.

SAS’ management claims it’s impossible to meet its pilots demands for more predictable work schedules, higher pay and renewal of agreements regarding career development and seniority. The pilots counter that they helped SAS avoid bankruptcy several years ago through pay freezes, cuts and work changes. Now that the airline is profitable again, they want their share of renewed profitability.

“We have managed to turn the company around, to an historically good result last year,” acknowledged SAS spokesman Knut Morten Johansen to TV2 Nyhetskanalen earlier this week. “If we meet the pilots’ demands now, we’ll be forced back to the start. That would be irresponsible towards the other employee groups in the company.”

Little sympathy for pilots’ pay hike demands
By Monday Johansen was openly admitting that the strike itself had thrust SAS into a “crisis” situation that threatened all the progress made in restructuring the airline over the past several years. Passengers were arguably suffering the most, with both business and pleasure travel plans ruined and potential financial losses mounting while they waited for hours on end for rebookings. Complaints were pouring in to both SAS and Norway’s state consumer protection agency from highly irritated customers left sitting in airports or at home on the phone.

While many sympathize with the pilots’ demands for more predictable work schedules, there’s little if any sympathy over their reported demands for a 13 percent pay hike. Other labour union leaders refused to comment on it, while many passengers who’ve received pay hikes of 3 percent of less were indignant.

Executive pay hikes ‘worse’
It didn’t help when news broke in Scandinavia on Tuesday that SAS chief executive Rickard Gustafson received a 35 percent pay hike in 2016 when the airline first started returning to profitability. He had taken a 20 percent pay cut when the airline teetered on the brink of bankruptcy in 2012, when other employee groups’ pay was cut as well. Gustafson’s total compensation since has made up for the decline while the pilots’ are lagging. SAS logged a profit of just over SEK 2 billion last year, and that’s what the pilots want to share.

“He has covered all his own losses since 2012,” Christian Laulund of the Norwegian pilots’ union Norske SAS-flygeres forening told Norwegian Broadcasting (NRK). “Then it’s remarkable that we’re told we’re coming with sky-high demands. We just want a small part of the difference.”

Both sides losing customer confidence
Gustafson has asked the pilots’ union to come back to the bargaining table, but made it clear on NRK’s nightly national news Monday evening that “the total cost picture they have put forth will create an explosion of costs. They’re breaking the legs off the opportunity to develop the airline. Companies that don’t manage to remain competitive go under.”

Gustafson refused to comment on his own executive pay development, opting instead to repeat that SAS needs to create a long-term competitiveness in order to survive.

Meanwhile SAS is losing an estimated NOK 90 million (USD 10.5 million) per day. “The strike has already lasted too long, and we’re clearly talking about great economic losses,” Gustafson told NRK, “but the worst is that we’re tearing away our customers’ confidence in us.” No new negotiations were scheduled ahead of Wednesday’s national Labour Day holiday in Europe on May 1st. Berglund



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