STOCKHOLM (Dow Jones)--A wildcat strike by pilots of SAS AB (SAS.SK) stranded hundreds of passengers at Oslo and Copenhagen airports Monday morning, an action which could cost the airline at least $1 million a day.
Protesting job cuts and the company's reorganization, Danish pilots staged a strike which affected all flights going out of Copenhagen, SAS said. At the same time, more than 50 Norwegian pilots called in sick, canceling between 60 and 70 flights out of Oslo.
SAS director of corporate communications, Bertil Ternert said the strike, which is illegal according to union agreements, was started by individual pilots independently of the Danish pilots' union Dansk Pilotfoerening.
The union wasn't immediately available for a comment. Nor was there sign whether the pilots would carry on their work stoppage into a second day.
Analysts warned that SAS faces rising costs if the disruptions to flight schedules continued.
"This is clearly negative and could result in large costs," says Handelsbanken analyst Ann Bowers. She added the strike could negatively affect the result for the first quarter, which is already the slowest period of the year for the company.
Last time there was similar strike in Denmark, the company said action would cost DKK10 million a day in a worst-case scenario.
At 1206 GMT, SAS shares were trading down 3.7%, or SEK4, at SEK105, underperforming a lower broader market.
Reacting to fierce competition from budget airlines, SAS has initiated several cost saving plans during the past few years, straining the relationship with unions and employees. Between 2002 and 2005 SAS ran a savings program which cut costs by SEK14 billion and included 5,500 job cuts.
Recent negotiations concerning the layoff of further SAS pilots are deemed to be the reason for Monday's wild cat strike.
Since the strike was launched at 0700 GMT, it has stalled all flights going out of Copenhagen, currently numbering more than 70.
Ternert said the strike was started to protest against the transfer of Danish pilots' employment to Scandinavian Airlines Denmark, from the SAS group.
The pilots are the last of all staff groups to be transferred as part of the company's reorganization whereby the Danish, Norwegian and Swedish units will operate as individual subsidiaries under the SAS group. The reorganization was launched in 2002 in conjunction with the company's savings plan.
SAS said it couldn't rule out a connection between the large number of sick absences among pilots at Norwegian subsidiary SAS Braathens Monday, and the ongoing strike in Denmark.
Between 60 and 70 of the total 440 flights going out of Oslo are estimated to be canceled during the course of the day.
Flights going out from Sweden weren't affected by the dispute.
Sydbank analyst Jacob Pedersen, who has a neutral rating on the stock, said the strikes are unlikely to have big impact on company's long-term prospects.
Company Web site: http://www.sasgroup.com
-By Malin Rising, Dow Jones Newswires; +46 8 545 130 95; [email protected]
(END) Dow Jones Newswires
