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UPDATE: SAS and pilots resume negotiations on new agreement

On Sunday morning, SAS resumed negotiations on a new agreement with several of the airline's pilots.

Published: 3 July 2022 10:38 CEST
UPDATE: SAS and pilots resume negotiations on new agreement
It is hoped SAS will reach an agreement with pilot's unions before noon on Monday. Photo: JANERIK HENRIKSSON/SCANPIX SWEDEN/AFP

On Sunday morning SAS resumed negotiations with pilots in the hope of finding a solution before the extended deadline of midday on Monday. If not, it could mean that as many as a thousand pilots will go on strike.

The pilots are employed by SAS’s parent company, SAS Scandinavia, and have announced strike action because they are not satisfied with their salary and working conditions at SAS.

In addition, the pilots are dissatisfied with the fact that instead of re-employing old SAS pilots, priority is given to hiring new pilots on cheaper agreements in the two subsidiaries SAS Link and SAS Connect.

On Saturday morning, when the parties stated that they would continue the negotiations up until and including Monday at 12 noon, there was hope of being able to land an agreement.

This is according to Keld Bækkelund Hansen, head of negotiations at Dansk Metal, who is involved in the negotiations on behalf of the pilots. “The aviation industry is complicated, and therefore we need extra time to get it to the finish line,” he told TV 2. “We will do everything to ensure that we get a breakthrough.”

If the parties do not succeed in landing an agreement before the midday deadline on Monday, then there is an opportunity to choose to postpone the deadline again and continue the negotiations, something that has already happened three times in the last week.

READ ALSO: Direct talks raise hopes SAS strike can be avoided

Another possibility is that the pilots choose to strike. This will mean that a significant part of SAS’s flights will be affected by delays or cancellations.

However, pilots in SAS Link and SAS Connect are not part of the strike notice and will continue their work. SAS will, therefore, be able to continue flights.

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MONEY

Swedish central bank lowers interest rate for first time in eight years

Sweden's Riksbank central bank has lowered the country's main interest rate by 0.25 percentage points to 3.75 percent, down from 4 percent. This is the first time the bank has lowered the rate since 2016.

Published: 8 May 2024 09:31 CEST
Swedish central bank lowers interest rate for first time in eight years

The decision to lower the so-called policy rate was widely expected, as the central bank itself indicated in a policy rate prognosis from March that it could lower rates between five and six times before the end of 2025, starting in either May or June this year.

“Monetary policy and diminishing supply shocks have contributed to inflation falling, and now it’s nearing the target,” the bank wrote in a press statement.

The bank’s inflation target is 2 percent. In March, inflation was just 2.2 percent.

“If the inflation outlook remains the same, the policy rate could be lowered at least two more times in the second half of the year,” the bank wrote, adding that new information since its most recent monetary policy report was published in March “strengthens the picture of inflation also being closer to the target in the slightly longer term”.

This effectively rules out the possibility of a further rate cut in June.

It also warned that the outlooks for inflation are “uncertain”, highlighting the strong American economy, geopolitical unrest and the krona’s exchange rate as risk factors which could cause inflation to rise again.

“Changes to monetary policy should therefore be taken carefully, with gradual cuts to the policy rate.”

Thursday’s announcement is crucial, as the policy rate is the bank’s main monetary policy tool. It decides which rates Swedish banks can deposit in and borrow money from the Riksbank, which in turn affects the banks’ own interest rates on savings, loans and mortgages.

If bank interest rates are high, it’s expensive to borrow money, which means people spend less and as a result inflation drops.

This cut to the policy rate won’t immediately lower the cost of your mortgage, but it’s likely to have a knock-on effect.

At its last meeting before the cut, the bank chose to keep rates the same at 4 percent, where they stood since September last year – the highest policy rate seen in Sweden since 2008, and the end of almost a year and a half of interest rate hikes.

The bank predicted in March that the policy rate could drop to as low as 2.75 percent, a drop of 1.25 percentage points, by the end of 2025. If mortgage rates also drop by the same amount, it would reduce the cost of a 3 million kronor mortgage by around 3,000 kronor a month.

The new rate will come into effect on May 15th.

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