Ailing Scandinavian airline SAS has new hopes for recovery after it reached a deal with labour unions early on Monday morning. The carrier, which is partially owned by the governments of Sweden, Denmark and Norway, will reportedly utilise the agreement as backing for fresh financing. The deal has been given the green light by eight different unions, and includes changes to working conditions and wages, according to reports.
The news comes as the firm continues to struggle amid fierce competition from regional budget airlines.
Rickard Gustafson, the airline’s chief executive, said in a statement on Monday, “We now have a plan for long-term profitability. We have built a strong base. These were very big sacrifices … from the unions.”
Last week, reports said the airline was on the verge of filing for bankruptcy, and officials drew heavy fire from trade unions after announcing that the carrier would seek to trim staffing levels by nearly 40 percent. This prompted intense negotiations that lasted through the weekend.
The new deal will allow the full-service airline to carry on for now, but experts question whether or not the company will be able to withstand competition from the low-cost market in the long term.
Kenneth Sivertsen, an analyst from Oslo-based Arctic Securities, told Reuters, “Although they are lowering their costs by three billion crowns, they will still be a high-cost company. I think they will be taken over. As a stand-alone company they will be squeezed between low-cost airlines and the huge flight carriers, such as Lufthansa and Air France.”