SAS Scandinavian Airlines has called out pilot unions who've just walked away from the negotiation table. The Stockholm-based airline is in the middle of a cost savings plan they've tagged “SAS FORWARD” that seeks to cut SEK7.5 billion (US$803.8 million) annually from the airline's running costs. SAS Scandinavian says they need everyone onboard to achieve this - but the pilots look like being reluctant restructuring passengers.

In a sharply worded statement issued on Tuesday, SAS Scandinavian said it was "worrisome" the pilots union ended negotiations and in doing so, they are risking the airline's future and their jobs.

"The success of SAS FORWARD is relying on all stakeholders’ participation including all employee groups," the statement says. "Therefore, it’s worrisome that the pilot unions after the second day of negotiations chose to walk out of the negotiation room. By doing so, they are putting the entire company at stake, including thousands of colleagues’ jobs and careers."

SAS's troubled history with pilot unions continues

Like most airlines, SAS has experienced a tough two years. While passenger demand is now returning across its Scandinavian home base countries, the airline struggled over the 2021/22 winter and posted a higher than expected Q4 2021 loss of US$276 million. Predating the pandemic is a fraught relationship with pilots unions. In 2019, SAS Scandinavian's problematic labor relations frequently hit the headlines.

Fast-forward to 2022, and last month the airline said it needed to transform its business, including its network, fleet, labor agreements and other cost structures to achieve that targeted US$800 million plus cut in annual operating costs.

“The biggest problem for SAS is costs - that’s where we have to start," Chief Executive Officer of SAS Scandinavian Airlines Anko van der Werff has said. "Other airlines have cut costs and can fly more flexibly and efficiently. We need to be able to do that too."

Announcing the SAS FORWARD restructuring plan late last month, SAS Scandinavian said it will "proactively adopt a full transformation of its business, including its network, fleet, labor agreements and other cost structures via a broad and comprehensive transformation plan."

Pilots unconvinced SAS FORWARD is the way forward

Key elements of the announced plan include the aforementioned annual operating cost savings, a redesigned fleet, network and product offerings, digital transformation, positioning as a leader in sustainable aviation, operating platform acceleration, and strengthening SAS Scandinavian’s balance sheet by deleveraging and raising new capital.

Redesigning the fleet, a polite term for a fleet reduction, isn't great news for SAS pilots. But it seems the airline's expectation of full participation and cooperation in reducing annual costs is what has really upset the pilots' unions. This week the pilot unions walked out on the second day of negotiations.

"SAS is in a more severe situation than ever, but we owe our lenders, owners, employees, and not the least our customers – as well Danish and Swedish taxpayers – to secure a place for SAS on the future market," SAS Scandinavian said in response to that. "We can only do this by moving forward with a plan that ensures a future competitive SAS.

"We have a difficult journey in front of us, but we fully believe the SAS FORWARD plan is the right way forward to give us a solid financial platform that will ensure a strong, competitive and sustainable SAS for many years to come."

However, the airline appears yet to convince its pilots SAS FORWARD is the way forward.