The SAS CEO before the winter season: – All airlines need as much cash as possible

The SAS CEO before the winter season: – All airlines need as much cash as possible
The SAS CEO before the winter season: – All airlines need as much cash as possible

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The case is updated.

When the pilots’ strike in SAS was called off this summer, it was said that the cabin crew’s unions would enter into negotiations in September. By then, these had already been postponed, and suddenly a deadline for these negotiations appeared in a court in New York – where SAS is going through bankruptcy proceedings.

In the course of this refinancing, SAS is dependent on bridging loan financing of around NOK seven billion, and lender Apollo Capital Management has set as a requirement that there should be peace of mind within the company. The payment from Apollo is outlined in two partial payments, where SAS has received the first of SEK 3.5 billion, but where a deadline was set for receiving the second transfer.

Apollo’s demand is that all agreements with the unions should be concluded during the autumn, but the deadline at the end of October was extended. If that wasn’t enough, winter is approaching. In a few weeks, the Christmas holidays will arrive, which for any airline in Northern Europe is the last bright spot before the two-month long winter season arrives. As everyone is expected to run a deficit.

– I hope that the cabin crew unions don’t just leave the clock ticking for tactical reasons to put pressure on us. We are completely dependent on a good agreement with them so we can assure our financial investors that SAS is a company worth investing in, says CEO Anko van der Werff.

“As much cash as possible”

– We got an agreement in place with the pilots for 5.5 years, and we depend on a similar agreement with the cabin crew and that it comes into place quickly, adds van der Werff.

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He states to DN that he personally does not spend much time on the negotiations in Norway, as he is closely tied up in the work with the leasing companies and other creditors.

– I have to spend my time cutting our debt and getting agreements in place with the leasing houses. We now negotiate literally with the whole world.

– And when we negotiate with the whole world, the cabin crew also have to agree to a solution.

Only a couple of long weekends will be the vacation time van der Werff has taken after the harrowing conflict with the pilot unions in July. The reason is the severely pressured financial situation SAS finds itself in. At the same time as the debt is to be cut, it is urgent to get the bridging loan in place, which has the special characteristic and in financial terminology in the USA is referred to as debtor-in-possession (DIP).

– We must have cooperation between SAS and the cabin crew so that we can get access to the second part of the DIP loan which can finance us through the restructuring. I hope the cabin crew see that this is a real financial restructuring that we are doing in the USA, where we will cut one billion Swedish kroner in annual expenses for the leasing houses.

– How long can SAS last without the second part of the bridging loan?

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– I cannot go into that, as we are in a quiet period before we report our next quarterly figures. But let it be said: All airlines are dependent on as much cash as possible before the winter season arrives.

No update for two weeks

From what DN understands, it is perceived from both sides that the negotiations on the cabin side are dragging on. Two weeks have already passed since the national mediator gathered the Norwegian trade unions and the SAS management for a voluntary negotiation without any new updates.

– The last negotiations have gone a year overtime, so we are used to it taking time. No deadline has been set by the company, says the head of the SAS Norway Cabin Association, Martinus Røkkum.

He has previously stated to DN that “the dialogue has been good, but we are far apart”. Røkkum then added that the cabin crew in SAS were “very far behind in terms of pay” compared to other companies in Norway and that much of the disagreement with the management was about pay.

– Since the voluntary mediation, we have had some dialogue with the management, but no new negotiations are planned at the present time, says Røkkum.

The Ombudsman is connected

Ombudsman Mats Wilhelm Ruland, who was central to the negotiations between the SAS management and the four pilot associations from Denmark, Sweden and Norway this summer, has not yet responded to DN’s inquiry on Thursday. Ruland assisted the parties – the local SAS management in Norway and the two Norwegian cabin associations – when they met in mid-November. Then the initial rounds of talks had not produced the desired result.

– In order for forced mediation to be relevant, there must first be a notice of resignation, and that has not been submitted yet, Ruland said two weeks ago.

A notice of termination must be submitted 14 days before any strike can begin.

At the beginning of the year, van der Werff launched the rescue plan SAS Forward, which includes a cost program with the aim of cutting 7.5 billion Swedish kroner in annual costs.

For the time being, only the two Norwegian cabin associations will enter into voluntary mediation, as they relate to a collective agreement which is open. It runs until the parties agree on a new one, but in Denmark and Sweden the dates for the agreements are not yet known as they last until March next year.

Want electric planes and hydrogen

On Thursday, the SAS chief was in Oslo to participate in the Zero conference where he was to help promote hydrogen investment in aviation. As DN wrote in mid-September, SAS has signed a letter of intent for the delivery of two new electric aircraft with delivery in 2028.

– First and foremost, this is about the role of aviation in society and we want to show the younger generation that we are investing in future mobility solutions, van der Werff told DN then.

When asked how many such aircraft – which, with a range of 400 kilometres, can cover shorter routes inland on the Norwegian and Swedish coasts – van der Werff replied that he envisions that electric aircraft could make up 20-25 per cent of the fleet.

This autumn, SAS has a fleet of 100 small and large jets, in addition to other aircraft that it leases from third parties. However, the negotiations in the American bankruptcy court may lead to the fleet being trimmed, which will probably affect older models and long-haul aircraft.(Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links, which lead directly to our pages. Copying or other forms of use of all or part of the content may only take place with written permission or as permitted by law. For further terms see here.

The article is in Norwegian

Tags: SAS CEO winter season airlines cash

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