SAS pilot strike triggers warning of profit downgrades ahead

A strike by airline pilots across Scandinavia is set to erode profits at SAS AB as investors and passengers await news of a breakthrough in labor talks. Since starting late last week, the strike already looks set to cause almost 3,000 cancellations, affecting about 280,000 passengers. SAS on Monday said the development is having a “very negative effect on our customers and the business.” SAS and the pilot unions are trying to reach an agreement on pay levels and working hours. While the Stockholm-based airline company says it’s still too early to provide an estimate of the cost, analysts have started to do the math. Per Hansen, an investment economist at Nordnet in Copenhagen, says the five days of strikes through Tuesday alone will cost SAS about 500 million kronor ($53m), with no guarantee that the pilots will return to work any time soon. “On top of costs toward compensation, the loss of income from tickets and wage costs for all personnel groups aside from the pilots, SAS is also missing out massively on new ticket sales over the coming one to two weeks,” Hansen said. “No one wants to order a ticket that might end up not being worth anything and where there’s a risk of having to pay more to re-book.” <br/>