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Investing.com — Shares in Scandinavian airline SAS AB (ST:SAS) slumped by more than 12% on Tuesday, after the carrier announced that it filed for bankruptcy protection in the U.S. as a strike action by its pilots threatens a wider restructuring push.
In a statement, SAS said it will look to overhaul its debt obligations and “reconfigure” its airline fleet during the process. Talks with potential lenders over bridge financing of $700 million are also underway to keep operations open, the company added.
SAS said the move was spurred on by a pilot strike that began on Monday after wage negotiations collapsed.
“[T]he on-going strike has made an already challenging situation even tougher,” said SAS president and chief executive Anko van der Werff. “The chapter 11 process gives us legal tools to accelerate our transformation, while being able to continue to operate the business as usual.”
However, SAS reiterated a warning that flight schedules will be disrupted by the strike, adding that the future health of the company will also be at risk if the labor action is prolonged.
In the wake of the strike announcement on Monday, SAS said up to 50% of its flying schedule may be canceled, impacting 30,000 customers per day.
