Amid Pilots’ Strike, SAS Airlines Files for Bankruptcy in America

Stockholm — Troubled Scandinavian airline SAS has filed for bankruptcy with a U.S. court, it reported on Tuesday, as the company grapples with an ongoing pilots' strike.

"The board has concluded that legal tools are required to make progress in our ongoing negotiations with key stakeholders, and ultimately to succeed in making SAS a competitive and financially strong business," read a statement.

It noted that bankruptcy proceedings in America, known as Chapter 11, are a "well-established and flexible legal framework."

The proceedings are generally used by companies that seek legal protection while restructuring. A judge oversees the process.

SAS said operations would not be affected. That said, pilots are striking due to failed pay talks, which has led to about half of the airline's flights being grounded. About 30,000 passengers are being affected daily.

“Over the last several months, we’ve been working hard to improve our cost structure and improve our financial position. We are making progress, but a lot of work remains and the ongoing strike has made an already challenging situation even tougher," said SAS president and chief executive Anko van der Werff in the statement.

SAS announced a cost-cutting program at the start of the year. In the statement, it assessed its current liquidity at 7.8 billion kroner ($9.4 billion), but said it expects to still be able to pay obligations out of current funds.

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