Scandinavian airline SAS yesterday sought a deal with the last union opposing its plans for severe cost cuts aimed at avoiding bankruptcy and securing the airline’s long-term future.

There remains one union and we must have it on board too

SAS, half-owned by the governments of Sweden, Denmark and Norway, said it had secured a deal with seven of eight unions on wage cuts, working schedule changes and pensions and had only the cabin crew union of Denmarkto go.

The airline, hit by competition from lower-price rivals, last week announced plans to cut some salaries by up to 17 per cent and lower overall staff to about 9,000 from 15,000 as it shrinks its business. That prompted media speculation SAS faced bankruptcy if it failed to get unions to agree to the cuts.

But even if a deal is reached, analysts have questioned whether the airline can survive on its own in the long term as it faces competition from Ryanair and regional rival Norwegian Air Shuttle, both of which have lower operating costs.

“We have successfully negotiated seven of eight collective (union) agreements, which is gratifying,” SAS chief executive Rickard Gustafson told journalists during talks with unions at the main airport in Copenhagen.

“But there remains one union and we must have it on board too. That is a condition for carrying out our plan.”

The airline needs to get agreement from all eight unions as a condition of a $515 million (€403 million) loan from the governments and six banks.

Gustafson said management aimed to conclude negotiations as soon as possible. Although the airline had set a deadline of Sunday for an agreement, talks continued all night and yesterday. SAS has reached deals with unions for pilots from Norway, Denmark and Sweden plus unions for cabin staff in Sweden and Norway.

Raising fears of a possible bankruptcy, SAS told crews on Sunday to ensure airplanes were fully fuelled to be able to return home if needed. The airline was also giving cash to flying staff to ensure they could get access to hotels.

SAS has declined to say how long its cash would last if it failed to secure a loan. The airline aims to reduce costs by about $441.05 million a year.