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Scandinavia's largest airline, SAS is much closer to the abyss than previously thought - Reports

Thursday, 15 November 2012
Yesterday, the perception was that airliner, SAS was making progress and would remain buoyant in the future, but things don't seem to look as rosy as the company would have wanted. It has emerged late yesterday from Danish sources that SAS is much closer to bankruptcy than had been known thought of.

The driver for that is that there in not enough money for the company to run throughout to the end of the year and with its restructuring plan being blocked by disagreement with workers union, SAS can fail in a few weeks, according to inner sources close to the company.

The Danish daily, Politiken, has had inside information from several sources that supposes that the airliner has already developed detailed emergency plans at several hundred pages that outlines how the company should go bankrupt. There are also plans for how stranded passengers should be handled, as well as waiting queues at the Scandinavian airports.

Unless the unions agree to SAS crisis plan, the airliner could bankrupt airline. And if management does not get through with a purchase plan, the company's survival is counted in just a few weeks, writes Politiken.
"It is true that there not enough cash in the bank to manage to the year end, "said a central SAS source to the newspaper.

The paper went further to add that it is estimated that the Danish state compared to the other Nordic countries have the greatest interests at stake because of the thousands of jobs and infrastructure associated with the Copenhagen Airport. The Danish government is also concerned about the impact on jobs in the Copenhagen area and in the capital's infrastructure.

Should SAS goes bankrupt, it will means a loss of Skr1 billion for bank SEB, which hold SAS tickets purchased with card, write the Swedish newspaper Svenska Dagbladet. The paper understands that the Bank's commitment to take in customer card payments, those who bough tickets to fly with SAS can amount to Skr4 billion - money that largely risk be lost if the SAS fails. SEB would not comment on the newspaper's information.

On Monday, SAS management said that the unions have a week to accept lower wages and worse working conditions if the company was to survive. This is because the banks and other lenders had rejected to loan more money to SAS until these tight rules where met.
The Norwegian and Danish pilot union has rejected the terms of the proposal presented by SAS. They had said that their sacrifices in the past years was enough and are not willing to see more salary cuts.

Without the agreement with the worker union, SAS is finished.
On Thursday, at midday, Swedish time, SAS will be once more in negotiations with the eight unions representing flight personnel. From the union side there is great irritation over how SAS wants to dictate the terms of the debate. The company had said on Monday that the unions must accept crisis plan in its entirety, including wage cuts for the company to survive.
"It is an ultimatum that is light years away from how things usually work," says Tommy Larsson, who is negotiating with Swedish Pilot Union (SPF).
By Scancomark.com Team

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