A day after its pilots went on strike, SAS, the Scandinavian airline, said on Tuesday that it had filed for Chapter 11 bankruptcy protection in the US, the most recent reverberation in a summer of turmoil for European airlines.
SAS described the filing, made within the U.S. Bankruptcy Court for the Southern District of Latest York, because the “next step” in a reorganization that will address the money-losing airline’s financial difficulties, including cost reductions of greater than $700 million. It said it was in discussions with potential lenders who could provide $700 million in financing to support operations through the Chapter 11 process. It expected to emerge from the method in nine to 12 months.
The corporate said many international airlines have used U.S. courts for bankruptcy proceedings since the Chapter 11 law offers benefits to businesses undergoing restructuring with divisions in numerous parts of the world.
SAS, which is the national airline of Denmark, Norway and Sweden, said it will proceed flying, although on Monday it called the pilots’ strike “devastating” and warned that it could cause the cancellation of half of its flights, affecting about 30,000 passengers each day.
On Monday, SAS canceled 51 percent of its flights, in line with FlightAware. By midday on Tuesday, nearly 80 percent of its flights had been canceled. SAS’s stock price fell about 15 percent Tuesday, extending a 5 percent decline the day before.
“The continued strike has made an already difficult situation even tougher,” Anko van der Werff, the airline’s chief executive, said in an announcement on Tuesday.
SAS’s troubles are available a summer riddled with problems for the air travel industry, attributable to staffing shortages and walkouts by employees unhappy with long hours and low pay that has did not sustain with soaring inflation. Airports across Europe have been scenes of long lines of unhappy passengers, desperate to travel after years of pandemic lockdowns.
Unable to seek out enough baggage handlers, check-in staff, security guards or aircraft crew, airlines and airports have been in a rush to cancel flights.
Last Friday and Saturday, a walkout by employees at Paris’s major airport caused the cancellation of as many as one in five flights. One other walkout is planned for this weekend.
A latest round of cancellations at British Airways has reduced its schedule through October by 11 percent, Bloomberg reported on Tuesday.
Brussels Airlines, a unit of Germany’s Lufthansa, said on Monday it will cancel about 6 percent of scheduled flights in July and August, to avoid strikes and reduce workloads. “Your entire aviation sector is facing a turbulent summer,” the airline said.
A top executive at easyJet, a low-cost carrier based in Britain, stepped down on Monday after a series of flight cancellations. The airline said Peter Bellew, the corporate’s chief operating officer, had resigned and would “pursue other business opportunities.” Crews based in Spain have called for several days of strikes this month at easyJet in addition to its low-cost rival, Ryanair.