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Loss-making SAS has been in need of an overhaul for several years, but critics look to failed cost-cutting plans of the past and question whether a full turnaround will be possible for the airline.

Scandinavia’s flagship airline SAS averted imminent bankruptcy on Monday after all eight unions signed new collective agreements that will see jobs, salaries and pensions cut in the hope of restoring the company’s competitiveness and profitability.

Seven unions from Sweden, Norway and Denmark had given their approval to the savings plan, but the Danish cabin crew union CAU had held out for the better part of the day.

“I am very happy that we managed to get a deal,” said Helge Thuesen, chairman of CAU, which represents over 1,400 cabin attendants in Denmark. “We have stretched ourselves very, very far to reach out to SAS.”

SAS, which is half-owned by the governments of Sweden, Norway and Denmark, needed the unions to sign off on the restructuring in order to keep owners and creditors satisfied.

In recent years SAS has been pinched by competition from regional discount carriers, and the airline says the new round of cost-cutting measures will go far to improve competitiveness and profitability.

The restructuring plan, presented last week, proposes slashing 800 administrative positions and eventually reducing staff numbers from 15,000 to 9,000 as many services will be outsourced.

While welcoming the deal, analysts noted that SAS has been through several austerity programs before.

“SAS is creating for itself a platform that can bring the company out of crisis, but it is not certain they will succeed,” said Jacob Pedersen, an analyst at Sydbank. “SAS has been through saving schemes over the past 10 years, and they are still losing money. So there is a need for more than just a plan before I start clapping my hands.”

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Tags: labor, sas airlines, sweden

Photo credit: Scandinavian Airlines (SAS) Boeing 737 takes off from Ostersund Airport in Sweden. Ostersund Photography /

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