Scandinavian airline SAS has requested bankruptcy protection in the US due to the strike by its pilots.
Even though the strike has grounded roughly half of the carrier’s flights, the action will allow it to continue operating.
According to SAS, the airline had brought forward plans to restructure its finances as a result of the strike action.
The coronavirus pandemic had a severe impact on the aviation industry as travel demand plummeted.
Airlines and airports, which lost thousands of jobs due to the pandemic, have battled in recent months to deal with the uptick in air traffic.
The chief operating officer of EasyJet resigned on Monday as a result of several flight cancellations and other issues the airline has been experiencing lately.
Staff shortages have contributed to some of the sector’s disruption, but as workers fight for higher pay, numerous airlines face the possibility of strike action this summer.
In an argument about proposals to reduce their pay as part of the airline’s restructuring strategy, SAS pilots are on strike.
Money talks have “advanced”
A business can reorganize its debts while still operating under court supervision via the Chapter 11 bankruptcy system.
According to SAS, negotiations to raise $756 million to fund its current operations are “far advanced.”
Other non-US airlines have sought Chapter 11 protection while renegotiating contracts and financial arrangements with important suppliers, notably Aeromexico and Philippine Airlines.
In a statement, SAS stated that it hoped to “achieve agreements with key stakeholders through this process, restructure the Company’s Debt Obligations, rearrange its Aircraft Fleet, and emerge with a large capital injection.”
According to the airline, the pilots’ strike “is projected to result in the cancellation of about 50% of all planned SAS flights,” which will impact 30,000 passengers daily.
In 2020, SAS eliminated 5,000 positions, or 40% of their staff, to lessen the financial impact of the pandemic.