Scandinavian carrier SAS has filed for Chapter 11 bankruptcy reorganization in the wake of a decision Monday by SAS pilots to strike.
The carrier said the move will speed up a recapitalization plan called SAS Forward, which it announced in February. Flight operations will continue as normal during the bankruptcy proceedings, though operations are being impacted by the strike.
"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," the carrier said. "SAS expects to complete its court-supervised process in the U.S. in 9 to 12 months."
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SAS, which is based in Norway, Sweden and Denmark, added that it is in advanced negotiations with potential lenders for up to $700 million in financing.
The labor union SAS Pilot Group called a strike on Monday -- a move that SAS estimates will lead to the cancellation of 50% of flights the carrier operates, impacting approximately 300,000 passengers per day.
Origins of the pilots strike
The strike followed the labor union's formal warning on June 16. SAS Pilot Group accuses SAS of using subsidiary companies SAS Link and SAS Connect to work around contractual requirements that the airline rehire pilots laid off during the pandemic before bringing on new hires.
In a statement Monday, SAS CEO Anko van der Werff said the strike puts the airline's future at stake.
"The decision to go on strike now demonstrates reckless behavior from the pilots' unions and a shockingly low understanding of the critical situation that SAS is in," he said.
SAS said Tuesday that it has $740 million in cash on hand, which it will use to meet obligations, including payroll, as the strike continues.
Under SAS Forward, the carrier is striving to reduce costs by $710 million annually, raise at least $900 million in new financing and reduce or convert $1.9 billion of debt into equity.
SAS' U.S. destinations include Boston, Chicago, Los Angeles, Miami, Newark, San Francisco and Washington. The carrier is part of the Star Alliance.