Scandinavian Airlines files for bankruptcy amid pilots strike

July 5 (UPI) -- A pilots union strike prompted Scandinavian Airlines to file for bankruptcy in the United States on Tuesday.

The carrier filed for Chapter 11 bankruptcy in New York City, arguing that the walkout by the pilots on Monday and a protracted strike could cripple its finances in an industry that's still recovering from the impact of the COVID-19 pandemic.

Negotiations between the airline, also known as SAS, and the union broke down Monday. As a result, about 50% of all flights operated by the carrier were canceled.

The strike involves about 900 pilots across Scandinavia, some of whom are based in Norway. SAS is the flag carrier of Sweden, Norway and Denmark.

"Becoming a more competitive airline will require a full team effort and burden-sharing from all stakeholders," Scandinavian Airlines CEO Anko van der Werff said in a statement. "We urge SAS Scandinavia pilots' unions to end their strike and engage constructively as part of this process."

In response, the pilots union said it's not surprised at the bankruptcy filing -- but was a bit surprised that it happened so soon.

"We have finally realized that SAS doesn't want an agreement," SAS Pilot Group Chairman Martin Lindgren said according to SimplyFlying.com. "SAS wants a strike. We hope we will be able to return to the negotiating table and meet, but it requires that the employer makes a move."

SAS said the decision to file for bankruptcy, however, won't affect its operations -- but added that the strike is having a "negative impact on the liquidity and financial position of the company."

The Stockholm-based carrier said it expects to complete the bankruptcy process within 12 months. While the airline is in bankruptcy, all legal civil matters cannot proceed.

SAS is one of the largest airlines in Europe and the largest carrier in Sweden and Denmark.