SAS Plans Up To 5,000 Redundancies As COVID-19 Crushes Demand

Scandinavian Airlines (SAS) has announced plans to lay off 5,000 full-time staff representing about 40% of its total workforce.

The airline said the cuts are a consequence of the COVID-19 crisis and warned demand is expected to be significantly affected for the remainder of 2020.

“Regretfully, we are forced to adapt our workforce to lower passenger demand,” SAS CEO Rickard Gustafson said April 28.

The Star Alliance member expects it will take years before demand returns to the levels experienced before the outbreak. Therefore, it needs to adapt the business to a lower demand environment. SAS had already furloughed around 90% of its staff in mid-March.

The coronavirus outbreak, which has removed most of the demand for air travel, means SAS is operating a very limited domestic network in Norway and Sweden. Given the current restrictions, SAS expects only limited activity in its crucial summer season. European carriers normally generate most of their revenue during this period.

Uncertainty regarding demand and the time it will take for the organization to adapt mean that the carrier must act proactively to have the flexibility to ramp up the business quickly if demand returns, SAS said. The airline will have to take further actions if recovery takes longer than currently envisaged.

The potential reduction of the workforce by up to 5,000 will be split between its main markets. As many as 1,900 full-time positions in Sweden could go with a further 1,700 in Denmark and 1,300 in Norway.

SAS said the redundancy processes will be implemented in accordance with the labor law practices in each respective country. The airline plans to actively engage with its unions and other stakeholders to seek solutions to reduce the number of actual layoffs across the group, as well as exploring other productivity enhancements.

“COVID-19 has forced SAS to face a new and unprecedented reality that will reverberate not only in the coming months, but also during the coming years," Gustafson said.

“We need to adapt our cost base to the prevailing circumstances.”

SAS’ two largest shareholders, the Swedish and Danish governments, announced on March 17 they would provide the airline with more than €275 million ($298 million) in credit guarantees.

SAS carries 30 million passengers annually, operating from its three main hubs—Copenhagen Kastrup, Denmark; Oslo, Norway; and Stockholm Arlanda, Sweden—to over 125 destinations in Europe, the U.S. and Asia.