Scandinavian airline SAS' deal with pilots and cabin crew to freeze salaries is a key step for its 5 billion kronor rights issue.

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The Danish cabin crew of Scandinavian airline SAS accepted on Friday an eight percent pay cut during negotiations held as part of the company's cost-cutting measures, the CAU union said.

The agreement allows the airline to save 500 million Swedish kronor (51 million euros, 70.8 million dollars) per year, SAS said in a separate statement.

The governments of Denmark, Sweden and Norway collectively owns 50 percent of the Scandinavian group, which posted a loss of 2.95 billion kronor in 2009 after a loss of 6.36 billion kronor the previous year.

The deal removes a hurdle to the planned 5 billion kronor ($700 million) rights offer as the three governments have called for the airline to fix its union agreements before injecting more cash.

“Labor disputes are becoming an almost every-day occurrence for airlines,” Jacob Pedersen, an analyst at Sydbank told Bloomberg, adding that SAS’s deal is key to its future. “The alternative would have been devastating because it would have put a stop to the capital increase.” 

SAS has now signed agreements with Danish, Norwegian and Swedish unions to save 2.1 billion kronor as part of a cost-cutting programme totalling 7.8 billion kronor, the airline said.