COPENHAGEN/STOCKHOLM (Reuters) - Troubled Scandinavian airline SAS (SAS.ST) and unions held vital talks on Sunday aimed at ensuring the company’s survival and avoiding bankruptcy, but no deal had been reached by the evening.
The Scandinavian airline, hit by competition from lower-price rivals, last week announced plans to cut some salaries by up to 17 percent and reduce overall headcount to about 9,000 from 15,000.
A newspaper said board members were meeting banks in Stockholm after talks with unions that began on Thursday at SAS headquarters at the main airport in Copenhagen.
SAS spokeswoman Elisabeth Manzini declined to confirm whether a meeting with banks was taking place.
Fueling fears aired widely in the Scandinavian media that the lack of a deal might lead to an immediate bankruptcy application, she said the airline had told crews to make sure airplanes were fully fueled to return home if necessary.
The airline was also giving cash to flying staff to ensure they could get access to hotels if there was a bankruptcy.
“Due to the fact that this is a very serious situation for SAS right now it is our responsibility as a company and employer to secure our assets, regarding staff as well as planes,” she said.
However, she declined to say how long SAS’s cash would last if the loans with the banks were not agreed to.
The airline had set Sunday as the deadline for a deal, giving no precise time for when that had to be met.
Manzini said the board still intended to have a meeting on Sunday, but could give no time for that.
The labor unions, meanwhile, said they met the airline’s demands.
“We have compromised with SAS on all parameters - wages, pensions and productivity,” Lars Bjorking, chairman of the Danish Pilots Union said in a statement on behalf of the Danish, Swedish and Norwegian pilots’ unions.
Analysts have said they doubt the measures will anyway secure the independence of the airline in the long term as it has a structure designed more to secure jobs and Nordic solidarity than to generate profits.
SAS is half-owned by the governments of Denmark, Sweden and Norway. The governments and six banks have said they will lend SAS about 3.5 billion Swedish crowns ($515 million) if the airline can secure a deal with the unions to slash costs.
SAS expects cost cuts to improve earnings by 3 billion crowns while asset sales would strengthen the company’s balance sheet another by 3 billion crowns.
($1=6.8020 Swedish crowns)
Reporting by Anna Ringstrom and Johan Ahlander, writing by Patrick Lannin; editing by David Cowell, Gary Crosse