Scandinavian airline SAS has filed for bankruptcy protection in the US as a strike by its pilots added to its financial woes.
The move will allow the airline to continue operations despite the strike grounding about half of its flights.
SAS said the industrial action means the airline has frontloaded plans to restructure its finances.
The airline industry has been hit hard by the coronavirus pandemic as demand for travel plummeted.
In recent months, however, airlines and airports, which have lost thousands of jobs during the pandemic, have struggled to cope with the air travel recovery.
EasyJet’s chief operating officer resigned on Monday after a series of flight cancellations and disruptions at the airline over the past few weeks.
Some of the disruption in the industry has been caused by staff shortages, but several airlines face a strike over the summer as workers push for higher wages.
SAS pilots are going on strike one after another over plans to cut their salaries as part of the airline’s restructuring plan.
The Chapter 11 bankruptcy mechanism allows a company to restructure its debts under court supervision while continuing to operate.
SAS said talks were “well advanced” to raise $756 million to continue immediate operations.
Other non-US airlines, including Aeromexico and Philippine Airlines, have sought Chapter 11 protections while renegotiating contracts and financial arrangements with key suppliers.
“Through this process, SAS aims to reach agreements with key stakeholders, restructure the company’s debt obligations, reconfigure its aircraft fleet and emerge with a significant capital injection,” SAS said in a statement.
The airline said the pilots’ strike “is estimated to result in the cancellation of about 50 percent of all scheduled SAS flights,” affecting about 30,000 passengers a day.
SAS cut 5,000 jobs – 40% of its workforce – in 2020 as it tried to cut losses caused by the pandemic.
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