Struggling Scandinavian carrier SAS gets US$700m loan

AILING Scandinavian airline SAS, which filed for bankruptcy protection in the United States in early July, said on Sunday (Aug 14) that it had secured a US$700 million loan.

The move follows a crippling 15-day pilot strike, also in July, that cost the carrier US$9-12 million a day.

The pilots were protesting against salary cuts demanded by management as part of a restructuring plan aimed at ensuring the survival of the company.

SAS said it has entered “into a debtor-in-possession (DIP) financing credit agreement for US$700 million with funds managed by Apollo Global Management”.

SAS had filed for Chapter 11 bankruptcy protection in the United States and said the “DIP financing, along with cash generated from the company’s ongoing operations, enables SAS to continue meeting its obligations throughout the Chapter 11 process”.

“With this financing, we will have a strong financial position to continue supporting our ongoing operations throughout our voluntary restructuring process in the US,” SAS board chairman Carsten Dilling said.

SAS management announced in February the savings plan to cut costs by 7.5 billion Swedish kronor (S$1 billion), dubbed “SAS Forward”, which was supplemented in June by a plan to increase capital by nearly 1 billion euros (S$1.4 billion).

Denmark and Sweden are the biggest shareholders with 21.8 per cent each.

“We can now focus entirely on accelerating the implementation our SAS Forward plan, and to continue our more than 75-year legacy of being the leading airline in Scandinavia.”

SEE ALSO

Airlines cancel about 600 flights in US as thunderstorms hit operations

Cathay Pacific narrows loss but Covid rules on crew cloud outlook

SAS employs around 7,000 people, mainly in Denmark, Norway and Sweden. It has suffered a string of losses since the start of the coronavirus pandemic in early 2020. AFP