Scandinavia's flagship airline SAS averted imminent bankruptcy on Monday after all eight unions signed new collective agreements that will see jobs, salaries and pensions cut in the hope of restoring the company's competitiveness and profitability.
Seven pilot and cabin crew unions from Sweden, Norway and Denmark had given their approval to the savings plan after midnight Sunday, but the Danish cabin crew union CAU had held out for the better part of the day.
"I am very happy that we managed to get a deal," said Helge Thuesen, chairman of CAU, which represents over 1,400 cabin attendants in Denmark, adding that he hadn't slept for three days due to the marathon talks. "We have stretched ourselves very, very far to reach out to SAS."
Without the unions' green light, SAS, which is half-owned by the governments of Sweden, Norway and Denmark, would have seen its credit line severed this week — effectively signifying the company's insolvency.
"It has been hard work, and big responsibilities have been taken," Rickard Gustafson, the carrier's CEO, told reporters in Copenhagen. "The great transformation of our company has taken place in a very short period of time, and therefore it has been very intensive."
Last week Gustafson said the company hasn't made money in years and cannot continue operating without profits.
In recent years, SAS has been pinched by competition from regional discount carriers, and the airline says the new round of cost-cutting measures will go far to improve competitiveness and profitability.
The restructuring plan, presented last week, aims to cut costs by $3 billion kronor ($440 million) annually. It proposes slashing 800 administrative positions and eventually reducing staff numbers from 15,000 to 9,000 as thousands of jobs will be outsourced.
The savings plan also includes new union agreements for personnel, centralizing corporate headquarters in Stockholm, and selling assets.
While welcoming the deal, analysts were cautious given that SAS has been through several austerity programs before.
"SAS is creating for itself a platform that can bring the company out of crisis, but it is not certain they will succeed," said Jacob Pedersen, an analyst at Denmark's Sydbank. "SAS has been through saving schemes over the past 10 years, and they are still losing money. So there is a need for more than just a plan before I start clapping my hands."
SAS shares were up more than 24 percent at 6.95 kronor in Stockholm, where the group is headquartered.