Thousands Stranded As SAS Continues In Its Fifth Day

As the SAS pilots strike continues into a fifth day, the number of passengers affected has increased past the quarter of a million mark. With no resolution to the conflict in sight, how long will this SAS strike take?

It was last Friday when more than 1,400 pilots walked out on SAS. Pilots from Sweden, Denmark and Norway refused to work anymore until SAS improved their working conditions and salaries.

At least 70% of flights have had to be cancelled as a result.

With an estimated 280,000 passengers affected, SAS could be looking at a large bill for compensation, on top of the loss of revenue as a result of the strike.

Under EU regulations, all passengers are entitled to a €600 compensation payment if their flights are delayed for more than three hours.

However, SAS have said they will reject these claims, citing extraordinary circumstances as a reason not to pay. SAS’s information manager Morten Johansen said:

Passengers are not entitled to compensation when the delay is caused by a strike, as that is considered an extraordinary circumstance that is outside the airline’s actual control.

However, it’s unlikely that this stance will be challenged going on previous outcomes of strikes.

When Ryanair refused to pay compensation following strike action, the Civil Aviation Authority (CAA) said that the airline must settle these claims and are taking the Irish carrier to court to make them pay.

The short answer is not any time soon. Even the mediators are losing hope of a resolution.

Mediator Jan Sjölin on Tuesday morning said: We are in constant contact with the parties, but there are no negotiations scheduled today. Things can of course change quickly, but at the moment nothing is booked in,

The parties remain fixed in their positions. It makes no sense to meet and repeat the same things all over again. We are on standby to get to work again whenever, but things have to change from what they were when talks broke down.

Apparently, it’s not that SAS aren’t keen to talk. It is, after all, in their best interests to get things moving as soon as possible.

Their CEO, Richard Gustafson said that both he and SAS have been creative in trying to resolve the situation.

We have made attractive offers that they have turned down. We’ll have to see what else we can do, he said.

However, the Swedish Pilots’ Association doesn’t think they’re doing enough. Rawaz Nermany, chairman of the Association, is quoted as saying:

The way forward is that SAS shows a genuine will to sit down and negotiate. If they do that, I am convinced that we can resolve this. I think SAS has to take responsibility,”

The Association is demanding a 13% pay raise for pilots, as well as better working hours and more predictable shift patterns. SAS are offering a 2.3% pay rise, but the union has apparently said that it’s more about the working conditions than the pay.

So, it seems that negotiations have reached a deadlock. With even the mediators lacking hope for a swift resolution, it looks like the strike action could go on a lot longer than initially thought.

Since the strike started late last week, it is estimated to have led to almost 3,000 cancellation, disrupting the travel plans of more than 280,000 passengers.

SAS said that the action by its pilots is having a very negative effect on our customers and our business.

DnB Markets lowered their rating on SAS shares as the strike entered the fifth day. Their analysts have halved their 2019 earnings per share estimate since the start of the strike. They’ve also warned that these may be cut further if the issue is not resolved by Wednesday.

Estimates are that the strike is costing SAS as much as 100 million Swedish Crowns ($10.5m) each day it drags on. Share prices have dropped by over 9% since before the strike.

The airline had previously targeted a 3bn Crown cost saving by 2020 in the face of rising fuel prices and stiff competition, but that target is looking increasingly unattainable in light of the current situation.


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