SAS Files For Bankruptcy In U.S. Court As Pilots Strike

Scandinavian airline SAS filed for bankruptcy protection in the United States on Tuesday to help accelerate restructuring preparations, saying that pilot strike action has harmed its financial position and liquidity, CNN reported.

Photo Insert: The company confirmed in a statement that it will continue to serve its clients during the bankruptcy process, despite the fact that the pilot strike is affecting its flying schedule.

Wage discussions between SAS and its pilots broke down on Monday, sparking a strike that would add to travel disruption across Europe as the peak summer vacation season begins.

This has accelerated the airline's decision to seek Chapter 11 bankruptcy protection in the United States, according to Chief Executive Anko van der Werff, who spoke at a press conference on Tuesday.

The company confirmed in a statement that it will continue to serve its clients during the bankruptcy process, despite the fact that the pilot strike is affecting its flying schedule. It stated that the filing with a U.S. federal court was made to expedite a reorganization plan revealed in February.

"Through this process, SAS aims to reach agreements with key stakeholders, restructure the company's debt obligations, reconfigure its aircraft fleet, and emerge with a significant capital injection," SAS said in a statement.

It plans to finish the Chapter 11 process in nine to twelve months. SAS shares dropped as much as 6% after the petition was disclosed, and were trading 2% lower at 0728 GMT (0228 a.m. ET; 3:28 p.m. in Manila).

During the pandemic, other non-US airlines including Avianca, Aeromexico, and Philippine Airlines have used the Chapter 11 process to renegotiate contracts with key suppliers like aircraft lessors while continuing to operate.

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