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Scandinavian airline SAS has applied for bankruptcy protection in the US as a result of its ongoing pilots’ strike.
Despite the strike having grounded approximately half of its flights, the action will allow the carrier to continue operating.
According to SAS, the airline’s plans to restructure its finances were made public because of the strike action.
Due to the drop in travel demand, the coronavirus pandemic severely impacted the aviation industry. Airlines and airports, which lost thousands of jobs due to the pandemic, have struggled to keep up with the increase in air traffic in recent months.
Following a string of delays and cancellations at the airline over the past several weeks, EasyJet’s COO announced his resignation on Monday.
Staff shortages have contributed to some of the industry’s disruption, but numerous airlines face the possibility of strike action this summer as employees fight for higher pay.
The SAS pilots are on strike because the airline’s restructuring plan calls for them to get lower pay.
A business can continue to function while reorganizing its debts under court supervision using the Chapter 11 bankruptcy system.
SAS stated that negotiations to raise $756 million were “far advanced” in order to fund its immediate operations.
While they renegotiate contracts and financial arrangements with important suppliers, other non-US airlines, including Aeromexico and Philippine Airlines, have used Chapter 11 protection.
The company’s debt obligations will be restructured, its aircraft fleet will be reconfigured, and SAS hopes to emerge from this process with a sizable cash injection, according to a statement from SAS.
According to the airline, about 30,000 passengers per day would be impacted by the strike by pilots, which was “expected to result in the cancellation of about 50% of all planned SAS flights.”
In an effort to lessen losses brought on by the pandemic, SAS slashed 5,000 employees in 2020 or 40% of its staff.
