Scandinavian airline SAS on Tuesday announced plans to lay off up to 40 percent of its workforce in Sweden, Denmark and Norway.
SAS said it would “initiate processes to reduce the size of its future workforce by up to 5,000 full-time positions”, as it anticipated it would take years before demand returns to pre-coronavirus levels.
The airline, which furloughed around 90 percent of its staff in mid-March, said the potential layoffs would affect up to 1,900 full-time positions in Sweden, 1,300 in Norway and 1,700 in Denmark. It said it would negotiate solutions with unions and stakeholders in the hope of reducing the number of actual layoffs.
“The workforce in SAS has notice periods with a mean of six months. The uncertainty regarding demand and the time it takes to adapt the organisation means that SAS must act proactively. This gives SAS the flexibility to ramp up the business quickly if demand returns, but also to take further actions if recovery takes longer than currently envisaged,” it said in a statement on Tuesday morning.
“Given the current [travel] restrictions, SAS expects limited activity in the important summer season. In addition, it will most likely take some years before demand returns to the levels seen before Covid-19.”
SAS CEO Rickard Gustafson credited government help, such as for example Sweden’s state support for furloughing workers, with already having saved “thousands of jobs” in the company. But he said SAS needed to look to the future and prepare to adjust its workforce to reduced demand in the wake of the pandemic.
“Covid-19 has created a global crisis for society at large and for the airline industry in particular,” Gustafson told Swedish news agency TT.
Sweden and Denmark, SAS’ two largest shareholders, announced on March 17th they would provide more than 275 million euros in credit guarantees to protect SAS from the economic impact of the crisis.
The airline said on Tuesday it was currently operating only “a very limited domestic network in Norway and Sweden”.