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Scandinavian airline SAS said on Friday it had buried the hatchet with its Danish unions and that four organizations had pledged to work for a «no-strike situation» after 2007 wage negotiations.

The carrier, hard hit by fierce competition from low-cost carriers and higher fuel costs in recent years, has had hundreds of flights grounded this year at a cost of millions of dollars due to strikes at its Danish and Swedish units.

«It's a strong initiative and the beginning of a cultural breakthrough in the company. Through these initiatives we should be able to avoid strikes,» SAS Chief Executive Mats Jansson told a news conference.

The airline, half-owned by the governments of Sweden, Denmark and Norway, launched its latest turnaround plan in June. It will focus on core businesses in northern Europe and aims to boost pretax profit to around SEK4 billion Swedish kronor (USD$575 million) annually by 2011 from SEK292 million in 2006.

In a statement, the four Danish unions acknowledged that strikes undermined customer confidence in SAS and were damaging for the business.

The unions said they were convinced that with cooperation they and SAS could «move toward» a time when SAS would not be hit by strikes.

«There are still a lot of unsolved issues. For five years there has been no cooperation and management has dictated (terms). We hope there will now be an open dialogue,» said Nicolas Fischer, a representative for the LFF ground crew union, which has 1,500 members.

SAS said it would reverse a decision that SAS traffic between Copenhagen and Oslo and between Copenhagen and Stockholm would be staffed solely with Norwegian and Swedish crews. It took this decision earlier this year in response to a three day strike by Danish cabin crews in April.

(Reuters)