Airline SAS cuts up to 5,000 jobs due to pandemic

STOCKHOLM: Scandinavian airline SAS (SAS.ST) said on Tuesday it could reduce about half its workforce as it struggles to survive the coronavirus outbreak.

Big airlines across the world are cutting costs and anouncing layoffs over plunging demand and travel restrictions due to the pandemic.

British Airways (ICAG.L) said earlier this month it would suspend more than 30,000 cabin crew and ground staff, while Lufthansa (LHAG.DE) said two-thirds of staff will work reduced hours after it grounded much of its fleet.

SAS said in Tuesday’s statement that it expected limited activity during the key summer season and could cut up to 5,000 full-time positions.

The company said last month it would temporarily lay off up to 10,000 employees, or 90% of the total workforce, as the coronavirus brought international travel to a near standstill in March, while domestic travel has also been severely impacted.

SAS CEO Rickard Gustafson said demand would probably be substantially lower this year and in 2021, while more normal levels could be reached in 2022.

“That’s the scenario we are working towards, and it’s the best estimate we can give,” he told Reuters.

“It will take time before the world opens up and people feel confident to get out there and travel again.”

Rival Norwegian Air (NWC.OL) has warned it could run out of cash by mid-May and last week said 4,700 staff would lose their jobs after four Swedish and Danish units filed for bankruptcy while U.S. and European staff contracts were cancelled.

Norwegian is now seeking to convert debt to equity in a bid to qualify for state aid as it seeks to survive the crisis.

SAS, part-owned by Sweden and Denmark, added that the potential reduction of the workforce would be split with approximately 1,900 positions in Sweden, 1,300 in Norway and 1,700 in Denmark.

SAS shares were down 3.4% at 0830 GMT. They are down around 40% this year.

Source: Reuters, Reporting by Helena Soderpalm; editing by Niklas Pollard and Angus MacSwan

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