Sweden and Denmark dig deeper to save SAS

The Swedish and Danish governments have agreed to stump up more cash to bail out ailing airline SAS in a recapitalisation plan that was finalised on Friday, the Scandinavian carrier announced.

Sweden and Denmark dig deeper to save SAS
A SAS aircraft parked at Copenhagen Airport in May this year. Photo: Liselotte Sabroe/Ritzau Scanpix

SAS, which like other airlines around the world has been hit hard by the economic fallout from the coronavirus pandemic, said that Stockholm and Copenhagen have agreed to increase their respective stakes in the carrier to 21.8 percent apiece as part of the rescue plan first unveiled in August. 

The package includes some 12 billion Swedish kronor (1.16 billion euros) of fresh funding and the conversion of a further 2.25 billion kronor of debt into equity.

Previously, Sweden had held a stake of 14.8 percent in SAS and Denmark 14.2 percent.

But analysts suggested that a lack of sufficient interest on the part of other investors compelled the governments to step in and fill the gap.

“Investors have not lined up to buy SAS shares, and the governments have helped SAS reach the goal,” said Sydbank analyst, Jacob Pedersen.

READ ALSO: Norway to sell remaining SAS airline stake

SAS's chief executive Rickard Gustafson said he was “grateful for the support from our largest owners, the government of Sweden, the government of Denmark and Knut and Alice Wallenberg's Foundation, that they have demonstrated throughout this recapitalisation process.”

Faced with a grounding of most of its fleet, SAS already announced in April that it would cut 5,000 staff — equivalent to 40 percent of its workforce.

The negotiations for those redundancies had now been completed, a company spokeswoman told AFP.

After having fallen to near zero in April, the airline is still operating at severely reduced capacity.

In September, monthly revenues were down by more than 85 percent to 448 million kronor.

“Looking ahead, our focus is to execute on our business plan aimed at adapting SAS to a market defined by lower demand, and to return as a profitable and more sustainable airline as the world recovers from the Covid-19 pandemic,” CEO Gustafson said.

Several other European governments have had to come to the rescue of their own flag carriers, such as France's Air France and Germany's Lufthansa.


Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers.