Skift Travel News Blog

Scandinavian airline SAS has voluntarily filed for chapter 11 bankruptcy protection in the U.S., to try and secure time and flexibility to reorganize its capital structure, reduce costs, and complete a financial restructuring under the supervision of the U.S. court system.

SAS expects to complete its court-supervised process in the U.S. in 9-12 months.

The airline wants to reach agreements with key stakeholders, restructure the company’s debt obligations, reconfigure its aircraft fleet, and emerge with a significant capital injection, while continuing to run the airline.

It said operations and flight schedules would remain unaffected by the chapter 11 filing. “SAS will continue to serve its customers as normal, although the strike by SAS Scandinavia pilots’ unions will impact the flight schedule,” the airline said.

On Monday, SAS pilots decided to go on strike affecting 50 percent of flights and 30,000 passengers per day.

The debt-ridden airline has been struggling to improve its cost structure and financial position for the past few months.

While progress has been made, the ongoing strike has made an already challenging situation even tougher, said Anko van der Werff, president and CEO.

“The chapter 11 process gives us legal tools to accelerate our transformation, while being able to continue to operate business as usual. We will continue to build back the network connectivity, products and service our customers expect, and we will continue to do so throughout this process and beyond,” he said.

EasyJet’s Peter Bellew has resigned as chief operating officer, following weeks of turmoil at the airline.

He has now left “to pursue other business opportunities” the airline said in a statement on Monday, effective July 1, as other European airlines prepare for a difficult summer ahead — including SAS which will now face widespread strikes after pilots voted on Monday to take industrial action.

Airport caps will also contribute to an already challenging period.

For now, David Morgan, easyJet’s director of flight operations, will lead the operations function in an interim role, reporting to CEO Johan Lundgren.

“The board would like to thank Peter for his hard work over the last two and half years and wishes him well in his future endeavours,” the airline said, adding it continues to operate up to 1,700 flights each day, carrying up to 250,000 passengers.

Meanwhile, pilots at beleaguered Scandinavian carrier SAS Airlines will be going on strike after their wage talks with the management failed to yield any results.

The strike is expected to impact 50 percent of all flights, or 30,000 passengers per day. Flights operated by SAS Link, SAS Connect and SAS’ external partners will not be affected.

“The decision to go on strike now demonstrates reckless behavior from the pilots’ unions and a shockingly low understanding of the critical situation that SAS is in,” said Anko van der Werff, the airline’s president and CEO, in a statement.

A strike at this point is also devastating for debt-ridden SAS which is in dire financial straits as a result of hefty debts.

Headquartered in Stockholm, Sweden, the airline has its hubs in Copenhagen, Stockholm and Oslo. Sweden and Denmark both have 21.8 percent stakes in SAS. However, following the latest financial crisis, Sweden had refused to inject more money into the airline.

American Airlines proposed a 16.9 percent pay raise to pilots in a contract offer to the Allied Pilots Association (APA) union, CEO Robert Isom said Thursday.

The raise would bring pay for pilots at American in line with rates for their counterparts at United Airlines, Isom said in a video message that was first reported by CNBC and independently confirmed by Skift. The two-year contract proposal, which would replace an agreement that became amendable in January 2020, also includes increases in per diem and training pay.

Based on American’s math, a captain flying narrow-body jets, like the Airbus A321 or Boeing 737-8, would earn up to $340,000 a year and one flying wide-body aircraft, like the Boeing 777 and 787, up to $425,000 a year, Isom said. That represents annual increases of up to $45,000 and $64,000, respectively.

The offer comes days after pilots at United began voting on a tentative accord that would give them a headline 14.5 percent raise over two years. However, the net increase would only be 9.5 percent after 5 percent that was previously promised. Skift understands that some pilots oppose the deal over what they view as a “substandard” raise, and concerns over quality of life issues.

Pilots at American’s regional affiliates Envoy, Piedmont Airlines, and PSA Airlines all received significant pay increases earlier in June that brought starting rates to the same level, $90 an hour, as their counterparts at American.

American is offering the APA and pilots “incentives” to ratify a new agreement by September 30. The union has yet to agree to the proposal.