Despite earlier measures to keep the company intact, Scandinavian Airlines Systems (SAS) announced a recapitalization plan in order to continue operations. Three major shareholders, including the Danish and Swedish governments, have already agreed with the plan to restore equity by $1.5 billion (SEK14.2 billion).
Previously, SAS planned to cut costs and improve its efficiency by $428 million (SEK4 billion). Under the new business plan, the Scandinavian carrier will focus on its services offered from Copenhagen, Oslo and Stockholm. It will also move to a single type Airbus fleet, as it evaluates the replacement for its Boeing 737 and regional aircraft fleet. The airline has 47 of Boeing’s Next Generation (NG) narrow-bodies, five ATR 72 aircraft (operated by Xfly), and 22 Bombardier CRJ-900 jets.
On April 28, 2020, the airline also indicated that it will let go of over 5,000 employees and renegotiate collective bargaining agreements with unions in order to increase the company‘s productivity.
“However, neither the broad measures implemented to date nor the planned efficiency improvements will alone be sufficient to help restore the Group’s equity position,” or help in securing the required level of liquidity in order for SAS to maintain its positions in Scandinavia, read a statement by the airline, issued on June 30, 2020.
In total, the company plans to bolster its liquidity by $1.5 billion (SEK14.2 billion) to weather the current pandemic-related crisis. SAS also will cancel and repay any outstanding amount of its $346 million (SEK3.3 billion) credit facility that the company took out in May 5, 2020.
An Extraordinary General Meeting will be held on August 25, 2020, in order for the company’s shareholders to approve the recapitalization plan.