Brussels approves $346mn Swedish-Danish aid package to SAS
The European Commission has given its blessing to a Swedish and Danish aid measure of SEK3 billion kronor (USD346 million) to support SAS Scandinavian Airlines (SK, Copenhagen Kastrup) in the context of the coronavirus outbreak.
The airline announced on May 26 that it had secured further support from the governments of Sweden and Denmark, its two biggest shareholders, in the shape of access to a credit line with subsidised interest rates, with a maturity of maximum five years. The two countries will each guarantee SEK1.5 billion (USD173 million).
It comes with strings attached. SAS has agreed to continue to “set strict climate and environmental requirements” in connection with the recapitalisation. The airline has separately pledged to cut total climate-impacting CO2 emissions by 25% by 2025, compared with 2005 levels, and by 50% by 2050. It has said that by 2030 all its domestic flights within Scandinavia (17% in 2019) will be powered by biofuel.
After an earlier SEK14 billion (USD1.68 billion at the time) recapitalisation plan was agreed in late 2020, the two governments each hold 21.8% stakes in SAS Group, with private shareholders holding the remainder.
The aim of the latest aid “is to provide SAS with the liquidity support it needs following the deterioration of its cashflow” due to recent travel restrictions and containment measures imposed by Denmark and Sweden to limit waves of the virus as of September 2020, the European Commission said.
In particular, the credit line, which will be provided no later than December 31, “does not exceed either double the annual wage bill or 25% of the total 2019 turnover of SAS,” the commission claimed, and it will be used only for investment or working capital needs.
The measure is also proportionate in light of the coronavirus-related state aid that SAS has already received, it added, as the previous measures have not been sufficient to address the carrier’s current liquidity needs.
In related news, after laying off around 5,000 employees during the pandemic, SAS is now struggling to find staff for its flights, Aftonbladet and E24 reported on July 14.
Demand for air travel has picked up in Scandinavia now that travel restrictions have eased, but in recent weeks the airline has had to cancel around 40 flights a week in Norway, out of a total of 2,500 in the entire network, Freja Annamatz, head of media relations in Sweden, told E24. In Sweden, it has cancelled just over 20 flights, out of a total number of 79 cancellations.
“It is true that for a short period in the start-up phase, when the summer trips started, we have sometimes had problems manning a small proportion of aircraft with cabin crew and pilots,” she said.
“It is almost a mockery of the pilots who have now gone out after being fired last year,” commented Christian Laulund, chairman of the transnational pilot organisation SAS Pilot Group.