A view of SAS Airbus A321 and A320neo planes at Kastrup airport parked on the tarmac, after Scandinavian Airlines pilots went on strike, in Kastrup, Denmark July 4, 2022. TT News Agency/Johan Nilsson via REUTERS

Join now for FREE unlimited access to Reuters.com

Register

STOCKHOLM, July 5 (Reuters) – Scandinavian airline SAS (SAS.ST) has filed for bankruptcy protection in the United States to help speed up restructuring plans, it said on Tuesday, warning that the pilots’ strike had an impact on its financial situation and liquidity.

Wage negotiations between SAS and its pilots collapsed on Monday, triggering a strike that is adding to the chaos of travel across Europe as the peak summer vacation period begins. Read more

This hastened the airline’s decision to file for Chapter 11 bankruptcy in the United States, the airline’s chief executive, Anko van der Werff, told a news conference on Tuesday. .

Join now for FREE unlimited access to Reuters.com

Register

The company said in a statement that it would continue to serve customers through the bankruptcy process, although the pilots’ strike is impacting its flight schedule.

He said the purpose of the filing in US federal court was to expedite a restructuring plan announced in February.

“Through this process, SAS aims to reach agreements with key stakeholders, restructure the company’s debts, reconfigure its aircraft fleet and emerge with a significant injection of capital,” SAS said in a statement. .

It expects to complete the Chapter 11 process in nine to 12 months, he added. SAS shares fell 6% after the announcement of the filing and were trading down 2% at 07:28 GMT.

During the pandemic, other non-US airlines, including Avianca (AVT_p.CN), Aeromexico (AEROMEX.MX) and Philippine Airlines have used the Chapter 11 process to renegotiate contracts with key suppliers like aircraft lessors. while continuing to operate.

Rival Norwegian Air (NAS.OL) emerged from bankruptcy protection involving courts in Dublin and Oslo last year. Read more

“It means nothing to normal operations. They are trying to fix the engine while driving,” Sydbank analyst Jacob Pedersen told Reuters of the SAS case.

“This is happening because SAS has been unable to accomplish the changes through negotiations.”

SAS needs to attract new investors and said that to do this it needs to cut costs across the business, including for staff and for leased aircraft that sit idle due to the closure of Russian airspace and of a slow recovery in Asia. Read more

The airline said on Tuesday that its cash balance of 7.8 billion Swedish krona ($756 million) was sufficient to meet its short-term business obligations.

SAS said discussions with lenders for additional funding of $700 million to support its operations during the restructuring were “well advanced”.

He added, however, that the strike “is having a negative impact on the company’s liquidity and financial situation and, if prolonged, this impact could become significant”.

Nordnet analyst Per Hansen said the app showed SAS needed a fresh start and he believed the strike would drag on forever.

“Chapter 11 protection is coming early,” he said. “Management and the board want to make it absolutely clear to all stakeholders that the situation is very serious.”

($1 = 10.3216 Swedish crowns)

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Anna Ringstrom and Stine Jackobsen; Additional reporting by Essi Lehto, Agata Rybska in Gdansk, Jamie Freed in Sydney; Editing by Kim Coghill and Jan Harvey

Our standards: The Thomson Reuters Trust Principles.