SAS staff accept lower pay and shorter working hours to save jobs

In early 2002, white-collar staff and pilots employed at the Scandinavian airline SAS have accepted a 5% reduction in pay and working time in order to maintain jobs at the crisis-affected company. Negotiations continue with other employee groups. Nevertheless, large-scale redundancies are still expected.

The joint Norwegian-Swedish-Danish airline company Scandinavian Airlines System (SAS) is seeking – as with many other airlines – to reorganise in the light of the extensive crisis in aviation since the terrorist attacks on the USA in September 2001. At the start of the crisis, SAS declared that 2,500 jobs had to go. Since then, the figure has been reduced through agreements with staff organisations and trade unions. Some 1,700 white-collar staff have thus accepted having their pay and working hours reduced by just over 5% in order to save jobs. In addition, they will also refrain from claiming wage increases in 2002. Voluntary leave schemes and part-time arrangement are being introduced and the employees have accepted the loss of a number of fringe benefits. The Danish white-collar employees' union at SAS, Luftfartsfunktionærerne (LFF), had hoped for a guarantee against dismissals, but in spite of joint efforts the management has given no such commitment.

Pilots and cabin staff were facing job losses in the order of 160 jobs in each job category, but it turned out also in this case that jobs could be maintained if they accepted a reduction in salaries and working hours. It seems that 83 Danish SAS pilots and a similar number from Sweden and Norway can now keep their jobs and thus their very important flight certificate. The young pilots who were otherwise due to leave SAS under the initial plan will only be working part-time in future, but this means that they may quickly return to full-time work when the economic situation becomes more favourable.

Like their white-collar colleagues, the older pilots accepted a 5% reduction in their salaries and a similar reduction in the number of flight hours. This procedure is unusual among pilots and should be seen in the light of the current serious crisis. If too many pilots were dismissed, the continuity among fully-operational pilots in the company would be lost. Some trade unionists argue that the salary reduction for pilots is not very drastic, as the pilots negotiated an increase in salaries of 13% in the spring of 2001 - the biggest increase for several decades.

The negotiations in SAS technical divisions have not yet come to a conclusion. It is a decisive point for the mechanics that they will not have to surrender the pre-flight inspection of planes on the ground to the pilots, as proposed in the planned retrenchment scheme. All occupational groups must have concluded their agreements concerning cutbacks by 1 February 2002. In spite of the flexible initiatives taken so far, large-scale dismissals are still expected if SAS is to reach its cost-reduction targets.

The last quarter of 2001 was the worst in SAS's history in all respects. The 2001 deficit of DKK 1.5 billion was the result of the last quarter of the year, when SAS – in addition to the general economic recession – also involuntarily contributed to the increasing fear of flying through the tragic accident during take-off in Milan where an SAS passenger aircraft collided with a German business jet.