Negotiation experts always advise to seek win-win solutions – easy to say but not easy to do with airline mergers. Nevertheless it is important to try because one will probably have to work together in the future. The question if one party should be grateful and give up more than the other is difficult, especially if the parties are somewhat equal. In the SAS-BU (Braathens) case the fact remains that SAS bought Braathens.
There are always two sides to a story and the BU pilots claims that their part of the operation was not the cause of BU’s financial trouble and that SAS should appreciate that they were allowed to buy BU. The BU staff trusted SAS’ promises and did not exercise their possibilities to oppose the takeover.
In June 2004, SAS CEO Joergen Lindegaard expressed that it was no secret that BU is a more efficient company. The BU management had over invested in Malmø Aviation and lost lots of money which brought BU into a financial catastrophe. The BU operation and production have always been more cost efficient than SAS. So when we took over and removed what they owed, they paid for themselves in one year. We paid 850 mio. for them which they made as a profit in one year. The purchase of BU was the best corporate deal I have ever made. Said Lindegaard and continued to explain that if we would not have taken over Braathens, how much help would a competitor – such as Norwegian – have gotten in the Norwegian market. That would have been my worst nightmare – that they could get a 50-60% market share.
The SAS pilots are upset, and rightfully so, because they have laid off a lot of pilots while BU have not. The question right now is how to merge the pilots together in a fair way.
When push comes to shove it is always a question about who has the most leverage.
With more than 2000 SAS pilots and less than 400 BU pilots it will be interesting to see if SAS CEO Lindegaard and SAS Corporate management will dare, or can afford to risk a labor conflict with the SAS pilots.