Scandinavian Airways has filed for chapter safety because it warned a crippling pilots’ strike was deepening its long-running monetary troubles.
SAS filed for safety within the US on Tuesday, a course of that may enable it to proceed flying whereas it restructures its funds.
Shares within the group tumbled almost 15 per cent to SKr0.53 by late morning in Stockholm to take its losses for the yr to about 60 per cent.
Anko van der Werff, the airline’s chief government, stated a strike by pilots that started this week had accelerated the choice to enter the chapter course of after it led to a wave of flight cancellations.
“The strike has a unfavourable influence on the liquidity and monetary place of the corporate and, if extended, such influence may grow to be materials,” SAS stated in an announcement.
Van der Werff had warned pilots a day earlier that the strike was “reckless” and would put “the corporate’s future, along with the roles of 1000’s of colleagues, at stake”.
Mark Simpson, an aviation analyst at Goodbody, stated about 30,000 prospects had been anticipated to be caught up within the strike.
“The airline has warned it might battle to rebook all prospects on comparable flights due it being peak summer season season,” he stated.
Carsten Dilling, SAS’s chair, stated the board had concluded “authorized instruments are required to make progress in our ongoing negotiations with key stakeholders”.
The souring industrial relations with pilots got here as SAS stated it wanted to slash prices as a part of a major restructuring following the pandemic.
The warnings over the monetary influence of the strike additionally represented the primary indicators of the harm the disruption to flying throughout Europe this summer season is having on firms’ steadiness sheets.
SAS is one among a handful of airways to enter chapter following the pandemic.
Norwegian Air Shuttle filed for cover from collectors underneath the Irish equal of Chapter 11 as a part of a wide-ranging downsizing that led to it abandoning its long-haul enterprise in late 2020.
Latin America’s largest provider Latam additionally filed for chapter safety in New York earlier that yr because the variety of folks flying collapsed.
For SAS, the choice to enter the chapter course of, which is predicted to take as much as a yr, is the newest a part of a long-running restructuring that’s designed to inject new capital into the enterprise and restructure its debt.
The enterprise has outlined plans to chop SKr7.5bn ($716mn) in prices, elevate SKr9.5bn in new capital and convert greater than SKr20bn of debt into fairness.
The airline stated it might proceed to serve prospects as regular within the meantime when the strike allowed and was in “properly superior discussions” with potential lenders for as much as $700mn of bridge financing to help it by way of the method.
The Swedish and Danish governments every personal 21.8 per cent of SAS, however the authorities in Stockholm final month refused to bail out the airline.