Scandinavian Airlines (SAS) says that it will need new funding of some SEK 12.5 billion (£1.06 billion) as part of recapitalisation plans aimed at enabling the carrier “to continue its operations and its sustainability agenda”.
SAS said that the Swedish government had put forward a proposal to the Swedish Parliament to support the airline with up to SEK 5 billion (£430 million) in funding, and said that the Danish government had “communicated political unity for a recapitalization of SAS”. The carrier said it was continuing efforts to secure support from the Norwegian government.
The group also said that it was in dialogue with selected stakeholders “regarding the terms and conditions of the recapitalization plan and the burden sharing measures required by the Swedish and Danish governments”, with further details set to be announced before the end of June.
Warning that it will likely take until “well into 2022” for demand to reach pre-coronavirus levels, the Board of Directors of SAS has approved a revised business plan including a reduction in the carrier’s workforce of 5,000 employees, the need for productivity improvements of 15 – 25 per cent, as well as continued strict cost control procedures, renegotiated contracts with suppliers, reduced spend on marketing, product, IT development and other projects.
SAS is also set to postpone several aircraft deliveries, including pushing four A320 neo deliveries to 2024.
But the carrier said that the revised plan would require recapitalisation, a view it said was shared by the Swedish and Danish governments.
SAS said that the aim of the recapitalisation plan was “to ensure that SAS is fully funded and that shareholders equity will be at levels reported before the Covid-19 pandemic when anticipated business volumes return to pre-corona levels in 2022”.
Last month fellow European carrier Lufthansa secured a €9 billion state bailout, while Air France has accepted €7 billion in state aid, with conditions attached including the cutting of many domestic services.