Airline SAS starts jobs, wages talks with unions

Thu Nov 15, 2012 9:01am EST

* Loss-making SAS starts vital talks with unions

* Airline hurt by low-cost rivals, high fuel prices, downturn

By Simon Johnson

STOCKHOLM, Nov 15 (Reuters) - Loss-making Scandinavian airline SAS began talks on Thursday with unions to agree up to 6,000 redundancies and wage cuts it says are vital to keep the airline flying.

The airline wants unions to agree by Sunday 3 billion Swedish crowns of cost cuts.

SAS - half-owned by Sweden, Norway and Denmark - has struggled for years against competition from low-cost carriers such as Ryanair and regional rival Norwegian as well as surging jet fuel costs and the global downturn.

Without union backing, lenders, including the three governments, could withdraw a pledge of 3.5 billion Swedish crowns ($516 million) in new loans, which has to tide SAS over until 2015.

"The Danish Pilot Association says yes to negotiations and no to an ultimatum," Lars Bjorking, chairman of the Danish Pilot Association, was quoted by Danish news agency Ritzau as saying.

As of September, SAS had 2.4 billion crowns in cash.

SAS said on Monday it planned to slim down its 15,000 workforce to around 9,000 through job cuts and asset sales.

Any cutbacks at the airline would also hit staff at its suppliers, handlers and the airports of Arlanda in Stockholm, Kastrup in Copenhagen and Gardemoen in Oslo.

Banks are also exposed, but Sweden's SEB denied a report it faced a loss of up to 4 billion crowns from credit card guarantees as "grossly exaggerated".

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