Contributor - Europe

Cathy Buyck

SAS has started to reinstate its full flight schedule after it reached agreement on new collective bargaining agreements with representatives of pilots’ unions in Denmark, Norway, and Sweden late Thursday evening.&nbsp;The deal, brokered by a national mediator, ended the pilots’ industrial action, which started April 26 and forced the cancelation of 4,015 flights. The strike affected up to 360,000 passengers, according to the airline.

 


The four unions—representing almost 95 percent of the airline's pilots in Scandinavia—called the strike after talks with management over job security, more predictability of the working schedule, and salaries broke down. Negotiations began in March.

 


SAS said the new three-year agreements address all three issues and re-introduce the previously canceled agreements concerning collaboration and career paths. The collaboration agreement, which the SAS Pilot Group said the airline canceled unilaterally, was a main concern for the pilots. “The most important thing for us has been to ensure that our members do not lose the job and have employment security,” noted Christian Laulund, head of the SAS pilots at the Norwegian pilot association Norsk Flygerforbund. The two cooperation agreements are now included as part of the collective agreement, he said. “We have also put in place a rotation system that provides a more predictable working day. The proportion of pilots in the group with a predictable rotation system will increase from 40 percent to 60 percent.”

 


The collective bargaining agreements, which still need endorsement from the unions’ members, provide for a pay increase of 3.5 percent in 2019, 3 percent in 2020 and 4 percent in 2021 for SAS pilots in Denmark, Norway, and Sweden; pilots of SAS Ireland and SAS’s ACMI providers, which operate almost a third of the airline’s short-haul flights, did not take part in the strike.&nbsp;

 


SAS president and CEO Rickard Gustafson expressed relief that the conflict was over, though he cautioned that the airline operates “in a highly competitive market.”

 


“With these agreements, we now need to intensify our work to build a long-term profitable and sustainable SAS,” he said, adding that he could not provide an estimate of the financial effects at this early stage.

 


SAS Group—which almost went bankrupt in 2012—widened its net loss in the three months ending January 31 to 469 million Swedish kroner ($49.1 million), compared with&nbsp;a 249 million kroner loss in the year-ago period, citing higher jet fuel prices and a weak Swedish currency. It maintained its outlook at the end February to deliver a positive result before tax and exceptional for the financial year ending October 31, though that assumed no unexpected events—such as the seven-day pilots’ strike—occurring during the year.

 


Airlines across Europe continue to report deepening losses for the winter owing to overcapacity in the market and high fuel prices. Air France-KLM on Friday was the latest to do so, joining the ranks of other legacy and low-cost carriers including Lufthansa, Norwegian Air Shuttle, Finnair, and Virgin Atlantic. The Franco-Dutch group’s first-quarter net loss widened to €320 million ($359 million) from €269 million a year earlier, and all three airline brands—Air France, KLM, and Transavia—posted a deeper operating loss. “As anticipated, the first quarter has been challenging for the European airline industry including the Air France-KLM Group, as substantial industry capacity growth in the off-peak business period led to unit revenue pressure,” said chief executive Ben Smith.

 


Earlier in the week, Lufthansa CFO Ulrik Svensson confirmed the German group’s “weak” first quarter through March 31 and “overcapacities, especially on short- and medium-haul European routes,” substantially depressing first-quarter earnings. The company’s net loss deepened to €342 million, from a €39 million loss in the January to March quarter of 2018, on a 3 percent year-over-year increase in revenue to €7.9 billion.

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