SAS gets $1.5 billion package to survive crisis
Scandinavian Airlines said it is getting an aid package worth 14.25 billion kronor ($1.5 billion) after an agreement with its main shareholders, securing the carrier’s survival amid the COVID-19 crisis. The governments of Sweden and Denmark, which own shares in the airline, were partly financing the recapitalization plan, SAS said in a statement.
The aid package was also financially supported by its third main owner, the Knut and Alice Wallenberg Foundation, a Swedish public and private foundation.
The package includes issuing new shares and converting bonds into shares.
In the statement, SAS said that amid the global travel restrictions caused by the pandemic it had taken measures “to radically reduce costs as a result of the decline in demand, which is not expected to return to pre-COVID-19 levels before 2022.” The recapitalization plan is subject to approvals by a shareholders’ meeting and the European Commission.
SAS Chief Financial Officer Torbjorn Wist told a news conference that he expects approval by the Commission of the Danish and Swedish government aid. Sweden holds nearly 15 percent and Denmark some 14 percent of the shares.
CEO Rickard Gustafson said the COVID-19 crisis will affect aviation demand for years to come. In April, SAS’ seat capacity was down 95 percent and 90 percent of staff were on temporary lay-offs, the airline said.
“In early March, overnight we had a different world to manage,” Gustafson said. “It is a different game now.”
Gustafson said SAS had set a 4 billion-kronor ($429 million) cost cutting plan that includes shedding up to 5,000 full-time positions — roughly half of the total workforce. Environmental activists spoke out against rescuing an industry that emits high levels of climatewarming gases like CO2.
SAS has set a 4 billion-kronor ($429 million) cost-cutting plan that includes shedding up to 5,000 full-time positions.
Scandinavian Airlines is getting an aid package after an agreement with its main shareholders, securing the carrier’s survival amid the COVID-19 crisis.