STOCKHOLM (AFP) - Around 20,000 passengers were stranded on Saturday (June 11) after Scandinavian airline SAS cancelled 159 flights due to a Swedish pilots' strike that entered its second day, SAS said.

"We have done all that's in our power to avoid a strike, but we have unfortunately been unable to come to an agreement. Our main priority now is to take care of our customers and (we) are working vigilantly to do everything we can to assist passengers affected," SAS spokesman Karin Nyman said in a statement.

SAS flights flown by Danish and Norwegian pilots were to operate as normal, she said.

The walkout comes during SAS' peak season, and has hit charter groups hard.

"Many flights are of course fully booked, so the chances of rebooking a flight are not the best. We're doing what we can to help in the best way possible and find alternatives for our travellers," Ms Nyman told news agency TT.

The strike broke out Friday at 6pm local time, after the Swedish pilots union SPF rejected the mediators' proposal of a 2.2 per cent wage increase, insisting on a 3.5 per cent increase.

The employers' organisation insisted however that the pilots' overall demands, including employment contracts offering greater job security, would entail a 10 per cent 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 before the strike broke out.

No date has been set yet for new negotiations.