Hundreds of pilots based out of Sweden walked off the job on Friday after wage negotiations fell through with Scandinavian airline SAS, the carrier announced.

"The Swedish pilots union has called 400 members on short-haul flights out on strike. Both domestic and European flights from Sweden are cancelled," the Scandinavian airline said in a statement. Long-haul flights were not impacted by the strike.

Around 40 flights based at Stockholm's Arlanda airport were canceled when the strike broke out at 6:00 p.m. local time (16:00 UTC). SAS estimates that around 4,000 passengers were affected, spokeswoman Karin Nyman told Swedish Radio.

After months of negotiations between the pilots and employers, the Swedish pilots' union SPF rejected a 2.2 percent wage increase proposal, pushing instead for a 3.5 percent increase.

The employers claimed that the pilot's overall demands, which include contracts insuring greater job security, would amount to a 10 percent cost increase.

"We want our employees to feel secure in their jobs, but the pilots' wage demands are just too high. We can't afford to pay that much given the competitive (air travel) market," SAS chief executive Rickard Gustafson said Friday prior to the strike.

The Scandinavian carrier - which is mainly owned by the governments of Denmark, Norway and Sweden - faces tough competition from low-cost carriers such as Ryanair and Norwegian Air Shuttle.

Earlier on Friday, SAS announced a drop in second quarter profits, citing tighter competition and higher costs for technical maintenance, as well as currency effects.

SAS averted a pilot strike on Thursday in Norway after mediated talks pushed into overtime.

rs/jm (AFP, dpa, Reuters)