Scandinavias main airline SAS AB is cutting as many as 5,000 jobs or about 40% of its workforce, becoming the first major European airline to permanently slash staff numbers as travel demand collapses.
The Stockholm-based carrier said on Tuesday it is initiating redundancies now because employees have an average notice period of six months and the carrier needs to prepare for what may be years of sluggish demand.
The job cuts provide a taste of things to come at European airlines, which have suffered one of the biggest hits from the coronavirus pandemic, with 90% of capacity grounded. Government furlough programs have generally avoided firings in the short-term, with thousands of workers layed off temporarily.
Its a painful message to give, SAS Chief Executive Officer Rickard Gustafson said in a phone interview, "We are prepared to shift if demand returns more quickly and pull back some of the announced cuts".
SAS rival Norwegian Air Shuttle ASA said last week it had placed four pilot and cabin-crew companies in Denmark and Sweden into bankruptcy protection, saying it was unable to pay salaries with its entire fleet grounded. The move will affect about 1,500 pilots and more than 3,000 cabin crew.
Furlough programs have affected tens of thousands of airline employees across Europe, with British Airways alone sending home 30,000 employees after grounding almost all of its passenger fleet.
SAS, which had already laid off 90% of employees, will split the permanent job cuts across its three home nations, with about 1,900 posts going in Sweden, 1,700 in Denmark and 1,300 in Norway.
Gustafson said the airline has yet to receive money from a bailout announced last month under which it will get 3 billion kronor ($300 million) in loan guarantees from Sweden and Denmark and $146 million from Norway.
The European Union gave the go ahead for the payments Friday, he said, and SAS is now working intensively to gain access to these facilities.