BREAKING NEWS

BREAKING NEWS

SAS lifted by reports of impending deal to end pilot strike

SAS lifted by reports of impending deal to end pilot strike
Reporters and photographers gather outside the office of Norway's national mediator after Scandinavian Airlines SAS and pilot unions resumed talks yesterday in attempt to end the strike, in Oslo, Norway May 2, 2019. NTB Scanpix/Heiko Junge via REUTERS -
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By Gwladys Fouche and Anna Ringstrom

OSLO/STOCKHOLM (Reuters) - Scandinavian airline SAS and unions are close to reaching a deal to end a week-long strike by pilots that has grounded 380,000 passengers, Norwegian media reported.

SAS shares closed up 9 percent, reaching levels seen just before the strike began on Friday, supported by the reports of progress by daily newspaper VG, public broadcaster NRK and business daily DN, which all cited unidentified sources.

However, a spokeswoman for employer group the Swedish Confederation of Transport Enterprises, which is negotiating on behalf of the Swedish pilots, later told Reuters that mediation between the parties was still ongoing.

The airline declined to comment, while the pilot unions were not immediately available for comment.

SAS has cancelled more than 4,000 flights since pilots went on strike on April 26 over wages and working conditions. Talks have been going on in Oslo since Wednesday to try to resolve the dispute and get SAS planes flying again.

"The will is there to solve the situation," Norwegian Pilots' Union President Yngve Carlsen earlier told reporters on his way in to the Norwegian state mediator's office, where the parties talked overnight.

"I am more optimistic now than I was yesterday," Carlsen added, but declined to offer a timeline for ending the strike.

Close to bankruptcy in 2012, SAS sold assets and cut wages and thousands of jobs in return for a life-saving credit facility. It has been profitable in the last four years but fuel costs are rising and overcapacity is still squeezing the sector.

The Swedish union has said pilots were seeking around a 13 percent pay hike, to make up for the 2012 wage cuts.

SAS, which is part-owned by the Swedish and Danish governments, has said that would entail significant cost increases that would seriously damage competitiveness.

The aviation industry's employer body in Sweden says pilots already have high wages, averaging 93,000 crowns last year. The Swedish pilots union disputes the figure, saying salaries start at 34,000 crowns, rising over 25 years to 98,000.

Analysts estimate the stand-off over wages and other demands by pilots in Sweden, Norway and Denmark could cost SAS as much as $10.5 million a day, threatening to wipe out the airline's annual profit in short order.

(Reporting by Gwladys Fouche, additional reporting by Oslo, Copenhagen and Stockholm newsrooms, writing by Anna Ringstrom; Editing by Niklas Pollard, Jason Neely and Alexander Smith)

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