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ANALYSIS: Why is the SAS strike happening now?

The strike by SAS pilots over working conditions at the Scandinavian airline is a remarkable one, but not unexpected, according to an industry analyst.

Published: 26 April 2019 11:22 CEST
Updated: 26 April 2019 12:36 CEST
ANALYSIS: Why is the SAS strike happening now?
Passengers waiting at Copenhagen Airport on April 26th. Photo: Philip Davali/Ritzau Scanpix

A total of 170,000 passengers are expected to be affected this weekend after SAS pilots walked off the job in Sweden, Denmark and Norway early on Friday, initially stranding 70,000 travellers as more than 600 flights were cancelled.

Although the situation is extraordinary, it has been on the cards for some time, one analyst said.

“It is remarkable, in a situation where there is a lack of pilots across Europe, that SAS has not seen loss of staff to other companies, if pilots are so dissatisfied with the package they currently have with SAS,” Jacob Pedersen, a stock market analyst with Sydbank who specializes in the aviation industry, told Danish news agency Ritzau.

“Having said that, these pilots have had to put up with an incredible amount over the last 20 years in the form of various types of cutbacks,” Pedersen added.

Over 1,400 pilots in Denmark, Norway and Sweden began striking on Friday after failing to reach a collective bargaining agreement with the company.

After negotiations broke down, members of the SAS Pilot group walked out on April 26th in all three countries. The group represents almost all (95 percent) of the airline's pilots in Scandinavia.

Salary increases are a major sticking point but the union has said that the biggest issues relate to working hours and scheduling.

The SAS Pilot group said that their salary requests are in line with the market rate, while one SAS negotiator called their requests “unreasonable and extreme”.

READ ALSO: Here's what you need to know about the SAS strike

Pedersen noted that SAS cabin crew and pilots are primarily employed under Scandinavian-style contracts agreed with unions (overenskomst in Danish and kollektivavtal in Swedish), making staff a larger overhead for SAS relative to other airlines.

The strike could have serious – and costly – consequences for SAS if the company is to meet the demands of the striking pilots, according to the industry analyst.

SAS was under considerable economic strain throughout the 2000s, but recovered after a policy of cuts was introduced in 2012.

The company has turned a profit in each of the last four years.

“SAS looks like delivering a profit again this year, but this is all propped up by the cuts the company is making,” Pedersen said.

“And if that trend comes to an end, whereby SAS can save money every year, it won’t take many quarters before SAS is once again in the red and fighting for its future,” he added.

SAS posted a net loss of 469 million Swedish kronor in the first quarter of 2019, compared to 249 million a year earlier, but forecast a full-year profit.

Sydbank on Friday predicted the strike would cost SAS 60 to 80 million kronor per day, AFP reports.

READ ALSO: Latest updates on the SAS strike

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TRAVEL NEWS

German train strike wave to end following new labour agreement

Germany's Deutsche Bahn rail operator and the GDL train drivers' union have reached a deal in a wage dispute that has caused months of crippling strikes in the country, the union said.

Published: 26 March 2024 09:55 CET
German train strike wave to end following new labour agreement

“The German Train Drivers’ Union (GDL) and Deutsche Bahn have reached a wage agreement,” GDL said in a statement.

Further details will be announced in a press conference on Tuesday, the union said. A spokesman for Deutsche Bahn also confirmed that an agreement had been reached.

Train drivers have walked out six times since November, causing disruption for huge numbers of passengers.

The strikes have often lasted for several days and have also caused disruption to freight traffic, with the most recent walkout in mid-March.

In late January, rail traffic was paralysed for five days on the national network in one of the longest strikes in Deutsche Bahn’s history.

READ ALSO: Why are German train drivers launching more strike action?

Europe’s largest economy has faced industrial action for months as workers and management across multiple sectors wrestle over terms amid high inflation and weak business activity.

The strikes have exacerbated an already gloomy economic picture, with the German economy shrinking 0.3 percent across the whole of last year.

What we know about the new offer so far

Through the new agreement, there will be optional reduction of a work week to 36 hours at the start of 2027, 35.5 hours from 2028 and then 35 hours from 2029. For the last three stages, employees must notify their employer themselves if they wish to take advantage of the reduction steps.

However, they can also opt to work the same or more hours – up to 40 hours per week are possible in under the new “optional model”.

“One thing is clear: if you work more, you get more money,” said Deutsche Bahn spokesperson Martin Seiler. Accordingly, employees will receive 2.7 percent more pay for each additional or unchanged working hour.

According to Deutsche Bahn, other parts of the agreement included a pay increase of €420 per month in two stages, a tax and duty-free inflation adjustment bonus of €2,850 and a term of 26 months.

Growing pressure

Last year’s walkouts cost Deutsche Bahn some €200 million, according to estimates by the operator, which overall recorded a net loss for 2023 of €2.35 billion.

Germany has historically been among the countries in Europe where workers went on strike the least.

But since the end of 2022, the country has seen growing labour unrest, while real wages have fallen by four percent since the start of the war in Ukraine.

German airline Lufthansa is also locked in wage disputes with ground staff and cabin crew.

Several strikes have severely disrupted the group’s business in recent weeks and will weigh on first-quarter results, according to the group’s management.

Airport security staff have also staged several walkouts since January.

Some politicians have called for Germany to put in place rules to restrict critical infrastructure like rail transport from industrial action.

But Chancellor Olaf Scholz has rejected the calls, arguing that “the right to strike is written in the constitution… and that is a democratic right for which unions and workers have fought”.

The strikes have piled growing pressure on the coalition government between Scholz’s Social Democrats, the Greens and the pro-business FDP, which has scored dismally in recent opinion polls.

The far-right AfD has been enjoying a boost in popularity amid the unrest with elections in three key former East German states due to take place later this year.

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