July 6, 2022: -On Tuesday, SAS filed for bankruptcy in the United States, the Scandinavian airline said, warning strike action by pilots is impacting its financial position and liquidity.
On Monday, Salary talks between SAS and its pilots tumbled, triggering a strike that added to travel chaos across Europe as the peak summer vacation period began.
The company said it would continue serving its customers throughout bankruptcy, although the pilot strike moved its flight schedule.
It said the purpose of the filing is to accelerate a restructuring plan announced in February.
“To proceed with the implementation of key elements of the plan, SAS and certain of its associates have willingly filed for chapter 11 in the U.S., a legal process for financial restructuring conducted under U.S. federal court supervision,” it said.
SAS needs to attract recent investors and has said that to do that, it must slash costs across the company, including staff and leased planes that stand idle because of finished Russian airspace and a slow recovery in Asia.
On Tuesday, the airline said it assessed that it has sufficient liquidity to meet its business obligations in the near term.
It added, however, that the strike “harms the liquidity and financial position of the company and, if long, like impact, could become material.”
Nordnet analyst Per Hansen said the application showed SAS needs a fresh start and that it believes the strike will haul on.
“Chapter 11 security comes early,” he said. “Management and the board want to clarify for all stakeholders that the situation is dire.”
During the pandemic, several airlines, such as LATAM and Philippine Airlines, filed for Chapter 11 safety in the United States. Philippine Airlines has exited, while LATAM anticipates exiting in the second half of this year.
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