A Scandinavian Airlines (SAS) airplane is refuelled at Oslo Gardermoen airport, Norway, November 7, 2019. REUTERS/Lefteris Karagiannopoulos

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COPENHAGEN, June 28 (Reuters) – Swedish reduction-making airline SAS (SAS.ST) is combating for survival, the most recent provider to hit fiscal straits because of to hefty debts, stiff competitiveness and soaring prices, even as the journey marketplace recovers from the pandemic.

SAS has mentioned a restructuring plan declared in February is dependent on it raising 9.5 billion Swedish crowns ($946 million)in income and changing 20 billion crowns of personal debt to equity.

Several governments throughout the world served shore up their countrywide carriers in the course of the pandemic. But Sweden and Denmark, which both equally have 21.8% stakes in SAS, are using very diverse strategies to the Scandinavian manufacturer.

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Denmark has mentioned it is willing to enhance its ownership and compose off credit card debt, but Sweden has refused to inject more dollars.

WHY DOES SAS Issue SO A great deal TO DENMARK?

SAS AB, formally recognized as Scandinavian Airways Program Denmark – Norway – Sweden, is headquartered in Stockholm, but it works by using Copenhagen Airport (KBHL.CO), the most significant in Scandinavia, as its primary hub.

Denmark’s Finance Minister Nicolai Wammen has explained SAS is important for the Danish economic climate and making sure very good travel connections from the Nordic state to the rest of Europe as properly as extended-length flights to other continents.

SAS directly employs virtually 7,000 individuals, equally shared amongst Denmark, Sweden and Norway. Prior to the COVID-19 pandemic, the firm underpinned 20,000 work in the Scandinavian area, 6,800 of these in Denmark, according to a 2019 report by Copenhagen Economics commissioned by SAS.

SAS accounted for nearly a 3rd of immediate and indirect flights to Denmark, in accordance to the report. It also accounted for 82% of transfer air targeted visitors at Copenhagen airport in 2017.

To Danes, SAS has typically been connected to a sense of pride and even a collective feeling of ownership as it developed to turn out to be a foremost high quality provider in the many years next its development in 1946.

WHAT HAS Absent Wrong?

At its top in the 1980s, SAS was named the world’s very best airline by an field group. But with the emergence of lower-charge rivals these types of as Ryanair (RYA.I) points started to improve.

The enterprise has been in practically constant economical problems given that the transform of the century, and previous year missing 6.5 billion Swedish crowns ($638 million), with earnings just a 3rd of pre-pandemic ranges.

On purchaser review web page Trustpilot, SAS is rated 1.5 out of 5 stars, just above Ryanair’s 1.4.

Adding to SAS’ problems, some 1,000 SAS pilots in Denmark, Norway and Sweden prepare to go on strike on June 29 over disagreements about wages and expense-reducing options. browse more


Denmark’s parliament agreed this month to produce off some of SAS’ debt and change some extra into equity, as properly as to inject new cash. That could raise Copenhagen’s stake in the airline to up to 30%.

But the authorities has made it a affliction of the money injection that SAS gets non-public investors to participate way too.

IS THIS A Problem?

Although the Danish federal government has promised to continue to be out of day-to-working day small business, it needs to shield its pursuits.

Denmark wishes “impact above the components in SAS that are central to preserving SAS’ strong foothold in Denmark and contribution to Denmark’s international accessibility,” the finance ministry mentioned this month.

That may well deter significant buyers and consortia that may well have been fascinated in producing sweeping alterations at SAS, in accordance to Sydbank analyst Jacob Pedersen.


Sweden, which has currently injected far more than 8 billion Swedish crowns into SAS more than current a long time, has taken a more challenging line on new financing.

Stockholm explained this thirty day period it would not supply new income to SAS, although it authorised the financial debt-for-equity plan. read through additional

If the airline does increase new fairness, this will decrease Sweden’s stake. The region has claimed it desires to exit SAS completely in the very long phrase. read through more


Neighbouring Norway’s government offered its remaining 10% stake in SAS in 2018, arguing there was no will need for the condition to individual airline stocks.

Nevertheless, it is a key creditor with 1.5 billion Norwegian crowns ($153 million) in financial loans built during the pandemic.

On Tuesday, Oslo said it would support SAS’ financial debt-to-equity strategy, less than selected problems, but did not system to remain a lengthy-expression stakeholder. go through more

($1 = 10.0434 Swedish crowns)

($1 = 9.7801 Norwegian crowns)

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Reporting by Jacob Gronholt-Pedersen and Nikolaj Skydsgaard, added reporting by Gwladys Fouche. Modifying by Mark Potter

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