Scandinavian Airlines today filed for bankruptcy in the United States, saying that a pilot strike announced on Monday had put the future of the airline in serious jeopardy.
According to SAS, the strike by pilots will affect about 30,000 passengers a day.
The Chapter 11 filing will allow Scandinavian Airlines to restructure its debts under court supervision while continuing to operate, although the labor action has grounded almost 50% its flights.
“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,” Scandinavian Airlines said in a statement.
The airline has filed for court-supervised bankruptcy protection in order to push through the ‘SAS Forward’ restructuring program intended to transform the company into a sustainable operation.
Other foreign air carriers including Aeromexico and Philippine Airlines have used Chapter 11 protection while they worked out their labor contracts and financial arrangements.
The airline industry was seriously hurt by the global COVID-19 pandemic as demand for air travel collapsed.
But recently air carriers and airports have registered some signs of the rebound in air travel.
But all those hopes appeared to be dashed by the summer strikes of the airline pilots and cabin crew.
SAS’ Chapter 11 US filings show that government loans and hybrid bonds make up the most significant unsecured creditor claims against the company.
The carrier’s move will definitely contribute to looming travel chaos across Europe as the summer vacation period begins.