By Anna Ringstrom, Essi Lehto and Supantha Mukherjee
STOCKHOLM (Reuters) -Wage talks between Scandinavian airline SAS and its pilots collapsed on Monday, triggering a strike that puts the future of the carrier at risk and adds to travel chaos across Europe as the peak summer vacation period begins.
The action is the first major airline strike to hit when the industry is seeking to capitalise on the first full rebound in leisure travel following the pandemic.
It follows months of acrimony between employees and management as the airline seeks to recover from the impact of lockdowns without taking on costs it believes would leave it unable to compete.
At the same time, employees across Europe are demanding wage rises as they struggle with surging inflation.
A strike could cost SAS nearly 100 million Swedish crowns ($10 million) per day, Sydbank analyst Jacob Pedersen calculated, and the company's future ticket sales will suffer. Shares in SAS were down 4.7% by 1511 GMT.
"A strike at this point is devastating for SAS and puts the company's future together with the jobs of thousands of colleagues at stake," SAS Chief Executive Anko van der Werff said in a statement.
"The decision to go on strike now demonstrates reckless behaviour from the pilots' unions and a shockingly low understanding of the critical situation that SAS is in."
Sydbank's Pedersen said the strike could erase up to half of the airline's cash flow of more than 8 billion crowns in the initial four-to-five weeks alone in a worst-case scenario, and was bound to leave "deep wounds" among affected travellers.
"SAS has too much debt and too high costs, and is thus not competitive. SAS is in other words a company flying toward bankruptcy," he said in a research note.
TRADING BLAME
Union leaders blamed SAS.
"We have finally realised that SAS doesn't want an agreement," SAS Pilot Group chairman Martin Lindgren told reporters. "SAS wants a strike."
Lindgren said the pilots were ready to resume talks, but called on SAS to change its stance.
The unions said nearly 1,000 pilots in Denmark, Sweden and Norway will join the strike, which is one of the biggest airline walkouts since British Airways pilots in 2019 grounded most of the carrier's flights in a dispute over pay.
Further disruption looms as British Airways staff at London's Heathrow airport in June voted to strike over pay.
In addition, Spanish-based cabin crew at Ryanair and easyJet plan to strike this month to demand better working conditions and workers at Paris' Charles de Gaulle airport stopped work at the weekend to demand a pay rise.