SAS emerges from two-year restructuring proceedings
Scandinavian Airlines (SAS) has emerged from a two year long restructuring process, resulting in the investment of $1.2 billion and the appointment of a new board of directors.
Concluding US Chapter 11 and Swedish reorganisation proceedings, “SAS has successfully restructured more than US $2 billion of debt, adjusted its aircraft fleet and related costs and reached agreements with key stakeholders, creditors and vendors,” explained SAS. The new principle owners of the reorganised company (Castlelake, Air France-KLM, Lind Invest and the Danish State) have also helped arrange a “competitive exit financing solicitation process,” with creditors to receive their dues “during the coming month”.
SAS voluntarily filed for Chapter 11 reorganisation in the US restructuring in Sweden in July 2022 and March 2024 respectively. At the time, its three largest shareholders (totalling approximately 200,000) were the Danish and Swedish states at 21.8% apiece, followed by the Wallenburg Investments with a further 3.42%. In the financial year 2022-2023, SAS reported a loss before tax of around SEK 1.5 billion ($0.15 billion).
Administrators’ reports attributed the airline’s failing profitability to the “financial consequences of the prolonged pandemic,” which despite “significant capital injections and restructuring of the then-existing capital structure [in 2020], the company remained under severe financial pressure”. In addition, the airline “failed to achieve the cost savings included as part of the business plan adopted in connection with the 2020 recapitalisation,” primarily because “the voluntary concessions could not be obtained from lessors”.
President and CEO of SAS Anko van der Wreff added that the restructuring proceedings “made it possible to save and restart one of the finest companies in Scandanavia,” with the company now looking forward to completing the transformation it has initiated and taking “advantage of the opportunities in a growing market”.
Alongside improved financial performance, SAS also recorded its best operational performance in company history this summer, scoring its highest-ever monthly profitability in July 2024. This demonstrates “steady progress” in achieving the targeted annual cost reduction of approximately SEK 7.5 billion ($0.74 billion), as outlined in the SAS FORWARD restructuring plan.
Danish businessman Kåre Schultz, who has been appointed as new chairman of the board of directors, added: “Together with SAS’ new investors, board and management, as well as with our partners in the SkyTeam alliance, we will continue to collaborate with partners and customers to drive transformative changes in aviation”. SAS is set to join global airline alliance SkyTeam on 1 September, becoming the group’s 15th airline partner.
