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SAS shares plummet after analysts warn it risks going bankrupt

An analyst report predicting that SAS is on the brink of bankruptcy sent the Scandinavian airline's share plunging more than 25 percent.

a SAS flight
Photo: Tony Webster/Flickr.com

The dramatic fall came after analysts at Norwegian bank DNB updated their sell recommendation, noting that the company’s debts of 40 billion kronor ($4.35 billion) are “unsustainable” and that “restructuring” is “needed to avoid bankruptcy”.

Since the start of the pandemic the airline has lost around 80 percent of its market value.

While many of the Covid-19 restrictions that have plagued the airline industry have now been lifted, SAS ran into new troubles in recent days when a baggage handler strike in Copenhagen caused delays and cancelled flights.

In 2020, the ailing airline cut 5,000 jobs – representing 40 percent of its workforce – and in May 2021 announced a credit line of three billion kronor ($350 million) from the Danish and Swedish governments, its main shareholders, to get through the crisis.

The company has received billions in financial support from the Swedish and Danish state, the two main owners.

In October last year, the airline said it was fighting to change the company “so that we have a future”.

The company is scheduled to publish on February 22nd its earnings for the three months ending in December.

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SAS

SAS pilot unions delay strike for three days of extra talks

Sweden’s pilot union has agreed to postpone the strike planned for Wednesday by three days in the hope of striking a last minute deal with the SAS airline.

SAS pilot unions delay strike for three days of extra talks

The strike, due to start on June 29th, has been pushed forward until just after midnight on July 1st, to provide time for extra negotiations with the Scandinavian airline’s management over a new collective bargaining agreement. 

After weeks with intensive negotiations over a new agreement between SAS leadership and 1,000 of the airline’s pilots, both sides are now willing to continue discussions, pushing back the deadline by three days. 

“SAS and the Norwegian pilot union are in agreement that we will continue negotiations for three days,” Norwegian national mediator Mats Wilhelm Ruland said. “There’s been intensive work towards finding a solution.”

Karin Nyman, Swedish press officer for SAS, said that the company was glad to have been given more time.

“It means above everything else that our customers will be able to travel over the next few days,” she told Swedish newswire TT.

Martin Lindgren, chairman of the Swedish SAS branch of the Swedish Air Line Pilots Association (SPF), would not comment on the content of the negotiations, but said that it was worth continuing to try and reach an agreement.

“We feel a great responsibility towards both SAS and our members, but above all towards our passengers,” he said in a press statement.

“Although we have gone to great lengths to come to an agreement, many issues remain unsolved. The strike can only be avoided if SAS show a real will to meet us. As of now, we’re choosing to give the other side yet another chance to do that.”

The airline’s Danish press officer, Alexandra Kaoukji, wrote in a statement to Danish newswire Ritzau that mediators believe “there is a possibility of reaching consensus” on a new agreement between the airline and pilots.

“The new 72-hour deadline means that our passengers will be able to travel,” she told the newswire. “We’re very happy about that. Our hope is therefore that we can find a solution and that passengers will not be affected.”

Nyman was also hopeful that both sides would be able to come to an agreement without resorting to strike action.

“We can only state that we’ve had constructive talks in recent days in our negotiations, and obviously the mediators have then made the assessment that there is a chance of reaching an agreement,” she said.

Pilots are unhappy that SAS is hiring new pilots on cheaper contracts in their two subsidiaries, SAS Link and SAS Connect. If the two parties cannot come to an agreement, up to 30,000 SAS passengers could be affected per day, the airline said on June 27th.

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