SAS strike over

After five days and 1,000 cancelled flights, the strike by SAS pilots is finally over. Under the terms of the new agreement, the pilots will receive a pay increase of 2.2%.

For SAS, which is under severe financial pressure, the strike has been inopportune. Experts calculate the cost of the conflict to the airline to between 10 and 25 million kronor per day.

Meanwhile, Infrastructure Minister Anna Johansson (S) said on Tuesday that the government saw no reason to review Swedish strike legislation. Saying she understood the problems experienced by travellers, the minister nevertheless pointed out that, “both strikes and lockouts are weapons that can be used by the parties to put pressure behind their demands”.

SAS CEO Rickard Gustafson expressed relief that the strike was over and said he regretted that so many of the airline’s customers (more than 100,000) had been affected.

Strike could break SAS

The strike among SAS pilots has forced the airline to cancel 240 flights today, which will affect more than 25,000.

The strike could break SAS, suggests SvD. The airline is already struggling on a cut-throat market, and once again there is talk of a takeover by Lufthansa. Above all, however, passengers are losing faith in SAS, and that could cost the airline dear.

The paper also reports that there is some disagreement between the employer and the union over just how much a SAS pilot earns; the employer says the average monthly salary is SKr 78,000 while the union says it is SKr 60,000. The union claims the conflict is about more than money, and that SAS pilots have seen their salaries lag since 2009.

Meanwhile, the strike raises the question as to whether legislation should be introduced to limit the right of pilots to strike, says the Swedish Federation of Business Owners (Företagarna).

“A study should be made into whether industrial action is proportionate to the impact it will have on business and society,” CEO Günther Mårder tells DI.

Carola Lemne, CEO of the Confederation of Swedish Enterprise (Svenskt Näringsliv) agrees and describes the strike as irresponsible and preposterous, both in terms of the pilots’ demands and the impact it could have on the airline.

Pilot strike continues

Scandinavian airline SAS has confirmed that talks with the Swedish Airline Pilots’ Association (Pilotförbundet) have ended in deadlock and that the strike will continue today, Monday. Two hundred and thirty flights will be cancelled today, leaving 27,000 passengers stranded.

SAS CEO Rickard Gustafson is concerned over the chaos the pilots are causing and the consequences of the strike, saying the airline cannot afford wage demands of SKr 100 million per year. “We are not competitive and you have no future if you are uncompetitive in a low-margin industry,” he says.

Daniel Ek: “I don’t intend to sell”

The biggest mistake of Swedish technology entrepreneurs is to sell their companies. This is the message from Spotify founder Daniel Ek as Spotify prepares for a stock market launch. He says, “That is our biggest problem. All these companies could become enormous if they just kept doing what they are doing… I don’t intend to sell.”

Despite the Spotify founder’s appeal to Swedish politicians for better conditions for fast-growing digital companies, Daniel Ek is full of praise for Sweden as an incubator of tech companies: “The Swedish safety net encourages citizens to take risks, which in the long term leads to companies that can thrive and grow”.

Education plug slowing job progress

The shortage of appropriately trained labour has become so large that it is threatening growth and thus the creation of jobs, therefore jobs growth will slow in 2017 and 2018. Both the public and private sectors have personnel shortages. This warning comes from the Swedish Public Employment Service’s (Arbetsförmedlingen) spring forecast, published on Wednesday.

However optimism among employers, in particular in private service companies, remains high. New jobs are being created across the country, mainly in the major urban areas.

Nevertheless the divisions in the labour market continue. In 2017 three quarters of jobseekers are expected to belong to groups long from the labour market. Around 40% of unemployed today are born outside of Europe and that proportion is expected to grow.

Ikea criticised

Several organisations are critical of Ikea after SvD reported the furniture giant’s rug supplier in Egypt had links to the Mubarak regime.

  Kathleen McCaughey from Amnesty says she was shocked by Ikea’s reaction to the reports, that Ikea said it was a good supplier and that one should not get involved in the politics of countries. She believes Ikea’s stance dismisses international regulations and the framework for guiding principles for companies and human rights.

Ericsson stops flights

Telecoms giant Ericsson’s CEO Hans Vestberg’s journeys by private jet, via Blue Chip Jet, owned together with AB Volvo, cost shareholders SKr 50 million per year.

SvD reports that Hans Vestberg’s expensive flying habits stand in stark contrast to the rules for other employees, who must travel economy class. “You feel extremely disappointed when you know that there are completely different conditions for the management and directors. For them there seems to be no limits at all,” reports an anonymous source from Ericsson.

Now Ericsson has taken the decision to close Blue Chip Jet. However Albin Rännar from the Swedish Shareholders’ Association (Aktiespararna) is critical: “It is strange that Ericsson took a very hurried decision to wind this down. If it has now been justified to put in SKr 300 million over the past six years, why is it suddenly not justified now?”

Östling criticises Riksbank

Leif Östling, the new chair of the Confederation of Swedish Enterprise, believes that Sweden’s central bank, the Riksbank, should discard the idea of creating inflation through monetary policy. “The Riksbank is based on an old theory from the 1930s with Keynes that can be scrapped. It is based on having much higher demand than supply. That is not the case today. The rate of price increase will be marginal for many years to come,” he tells SvD, saying he would like to see the benchmark repo raised.

Mr Östling believes that the greatest challenge right now is to get Sweden’s newly arrived immigrants into the education system and into work, and that upwards of half a million jobs will need to be created.

Riksbank shows poor judgement

In its latest Financial Stability Report Sweden’s central bank, the Riksbank, has warned that a drop in house prices may lead to a fall in consumption, which in turn could affect financial stability: “Historically, sharp falls in asset prices combined with extensive private indebtedness have contributed to deep and long-term recessions,” it cautioned.

Measures to counteract household debt are urgently needed, the bank said, proposing a reform of the housing market and taxation system, as well as the introduction of a debt-to-income ceiling.

SvD is troubled by the findings in the report, saying that if the central bank is so concerned over a future recession, then it should take a look at the role it has played in fuelling lending. …

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New rail link estimate

On Tuesday Sweden’s Transport Administration (Trafikverket) specified the cost of a high-speed rail link to SKr 230 billion. Previously the cost of the project had been estimated at between SKr 190 and 320 billion.

Alternatively, said the agency, the existing rail infrastructure could be upgraded, which would cost SKr 100 billion less. However, Director General Lena Erixon was keen to point out yesterday that there is still some uncertainty about the projected cost.

The government will now look more closely at the figures, before making a decision. According to Infrastructure Minister Anna Johansson (S), there are a number of issues that need to be considered, including low carbon transport policy.