Airline SAS says unions agree to last-ditch plan

All eight unions have reached agreements with Scandinavian airline SAS over what has been dubbed the troubled company's "final call" restructuring plan, the group said on Monday.

"Eight of eight union agreements have been signed November 19. The Danish Pilot Union Agreement is conditional upon approval by one third of its members," the company said in a statement.

In order to stay afloat, SAS has reached an agreement to increase its existing 3.1 billion kronor ($457 million; 358 million euros) revolving credit facility to 3.5 billion, provided by seven banks and the three Scandinavian governments -- Sweden, Denmark and Norway -- that together own 50 percent of the company.

But the financing has hinged on reaching agreements with the unions, as well as getting parliamentary approval for the plan.

The Danish cabin crew union was the last to sign an agreement.

Credit rating agency Standard & Poor's (S&P) on Monday downgraded the company to CCC plus from BB minus, arguing that the ongoing restructuring "has damaged customer and supplier confidence in the group, which we believe could take some time to recover."

"Demand in the airline industry is highly correlated with customer confidence and we see a risk that the uncertainty surrounding the restructuring could lead to a material decrease in ticket sales over the coming months," it said.

The company on Sunday told crews on long-haul flights to ensure aircraft had enough fuel to return home, should the group have to file for bankruptcy, Swedish daily Aftonbladet wrote.

The carrier is thought possibly to be heading for its fifth annual loss in a row after a restructuring programme last year failed to turn the company around.

In recent years, SAS has come under increasing pressure from low-cost rivals such as Oslo-based Norwegian, Europe's third largest budget airline.

Asset disposals and further outsourcing means the group's total number of employees would fall to 9,000 from 15,000 under the new plan.

Shares in SAS soared on Monday and were up by 23.21 percent at 1510 GMT on the Stockholm bourse. The main OMX Stockholm 30 index, in which the stock is not included, was 1.98 percent higher.

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