The future of SAS is hanging in the balance after management issued an ultimatum this week to force pilots and cabin crew to accept a wage deal that the lossmaking Scandinavian airline says is crucial to its survival.

The board of SAS, which is owned by the governments of Sweden, Norway and Denmark, will meet on Sunday to discuss whether to push ahead with a restructuring plan under which the workforce would be cut by 40 per cent, or whether to declare bankruptcy. Banks have made a new SKr3.5bn credit facility conditional on all eight unions of flight personnel in the three countries signing up to cuts in wages of up to 15 per cent and pension changes.

Danish unions representing cabin crew and pilots have reacted angrily to SAS discussing the plans with the media before them.

Ticket sales have been falling all week and worried owners of frequent flyer points have been using them up rapidly as concern grows that SAS could be the latest European airline with too high costs to go under.

Danish business is deeply concerned about what the possible end of SAS would mean for its hub in Copenhagen.

“We are very worried about what is going on. Having a regional carrier with a hub in Copenhagen is extraordinarily important for Danish business,” Lars Sørensen, chief executive of drugmaker Novo Nordisk, told the Financial Times.

SAS is looking to cut costs by SKr3bn and sell SKr3bn in assets to boost its competitiveness compared with low-cost rivals such as Norwegian Air Shuttle and Ryanair.

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