The US has granted bankruptcy protection to SAS, a Scandinavian airline. It was hit by a strike of its pilots and its financial difficulties.
Although the strike has halted about half of the airline's flights, the move will allow them to continue their operations.
SAS stated that the industrial action had meant that the airline had presented plans to restructure its finances.
As demand collapsed for travel, the coronavirus pandemic hit the aviation sector hard.
However, airlines and airports have struggled to adapt to the recent rebound in air travel in recent months.
After a string of cancellations and disruptions at EasyJet in recent weeks, the airline's chief operating office resigned Monday.
The sector is experiencing some disruption due to staff shortages. However, many airlines face the possibility of striking over the summer as workers push for better pay.
SAS pilots have been striking back at plans to reduce their salaries in the restructuring of the airline.
Chapter 11 bankruptcy allows companies to restructure their debts while still being able to operate.
SAS stated that discussions to raise $756m for its immediate operations are "well advanced".
Aeromexico, Philippine Airlines and other non-US airlines have also used Chapter 11 protection to renegotiate key financial and contract arrangements with suppliers.
SAS stated in a statement that it aims to reach agreements and restructure its debt obligations. SAS also plans to reconfigure its aircraft fleet. SAS hopes to emerge with a substantial capital injection.
According to the airline, the strike of pilots would cause cancellation of about 50% of scheduled SAS flights. This will affect approximately 30,000 passengers per day.
SAS eliminated 5,000 jobs in 2020 to try and reduce losses from the pandemic.