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November 16th, 2012

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As the weekend arrives with no agreement between SAS employees and leadership on the 2.8 billion kroner annual savings plan meant to save the airline from bankruptcy, the business minister, Annette Vilhelmsen (Socialistisk Folkeparti) warns that there is no way to save the company other than accepting the plan.

“SAS is in a very serious situation,” Vilhelmsen told Ritzau news bureau. “But there is a solution – specifically, the savings plan that is currently on the table and being negotiated. One must be realistic and say that there is no ‘Plan B’.”

SAS leadership gave employees until Sunday to accept the plan, which will eliminate 800 jobs and force employees to take an average 12 percent pay cut. If they don’t accept it, SAS’s managing director Rickard Gustafson has warned that the company will be forced to go into bankruptcy. 

In an internal email that was obtained by Politiken newspaper, Gustafson said that the plan “is crucial for SAS’s survival” and then if it is accepted as-is and in its entirety, the airline will continue. If it is not accepted, Gustafson warned, the company will begin liquidation procedures. 

The pilots’ union Dansk Pilotforening, which represents some 500 Danish SAS pilots, has already rejected the plan and members of the 1,400 member-strong Cabin Attendants Union (CAU) refused to take part in a meeting earlier in the week because of their dissatisfaction with SAS leadership applying pressure on employees via the media. CAU, however, came back to the negotiating table on Thursday.

Airline officials and employees’ unions have been huddled up at Copenhagen Airport these past two days, attempting to negotiate an agreement before the Sunday deadline. According to the Swedish financial newspaper Dagens Industri (DI), the tone of the negotiations had softened some on Friday. DI reported that the SAS leadership told the unions that the demands on the employees were not an ultimatum. The official word from both sides, however, is that neither has budged.

Also on Friday, Ritzau news bureau reported that a Norwegian buyer has been found for Widerøe airlines, a Norwegian subsidiary of SAS.  

With no deal reached on Friday, many analysts expect that the negotiations will come down to the wire. If the savings plan is accepted, it is expected to go into immediate effect. If it is rejected, or if no agreement is reached by the deadline, it is uncertain what SAS’s next step will be. But many fear that it could mean the end of the airline.

“If one is to believe SAS’s own words, then it is over for the airline,” Tommy Larsson, the chief negotiator for the Swedish pilots’ union Svensk Pilotforening, told DI.

The Danish government reportedly has a contingency plan ready should the partially state-owned airline go bust.