Key Points:

  • The Swedish pilots' union, Svensk Pilotförening (SPF), has filed a lawsuit against Scandinavian Airlines (SAS) for purported labor law violations.

  • SPF alleges SAS employed pilots and cabin crew through a Dubai-based company without union consultation, leading to inferior employment conditions.

  • SAS, which recently received approval for a rescue plan from a New York bankruptcy court, faces ownership changes with Air France-KLM and Castlelake as new stakeholders.

SAS Embroiled in Legal Dispute with Pilots' Union

Scandinavian Airlines (SAS), currently undergoing Chapter 11 proceedings, is facing legal challenges from the Swedish pilots' union, Svensk Pilotförening (SPF). The union has initiated legal action against the airline, citing alleged violations of labor laws. This legal move comes in the wake of a recent decision by an American judge to approve a rescue plan for the beleaguered airline.

SPF's primary contention is that SAS has been employing pilots and cabin crew through a Dubai-based entity, a move they claim was done without proper consultation with the unions. According to the SPF, this arrangement subjects the staff to the employment laws of the United Arab Emirates, resulting in conditions that are less favorable than those in Scandinavia.

Allegations of Unfair Employment and Tax Fraud

The union further alleges that SAS's employment strategy involves Smartlynx, an ACMI company based in Latvia, for the hiring of foreign crew members. In addition to the labor law violations, the Swedish pilots' association accuses Smartlynx of engaging in tax fraud. At this time, SAS has not publicly responded to these allegations.

Meanwhile, the Scandinavian airline recently secured a crucial victory with the approval of its rescue plan by a bankruptcy court in New York. This plan includes a significant investment from Air France-KLM, positioning the airline group, along with investor Castlelake, as the new owners of SAS. This approval marks a turning point for SAS as it navigates through its financial challenges, even as it contends with the legal issues raised by the Swedish pilots' union.