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SAS asks for a £1 billion Government bail-out

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All airlines, except UK-based ones, are now lining up their Government bailouts.

We’ve covered the €9 billion handed out to Lufthansa, of which only €3 billion must be repaid, as well as the €10 billion handed out to Air France KLM.  Smaller airlines like Finnair have also joined the bailout party.

Next up is SAS, the Scandinavian airline.

Because SAS is heavily focused on intra-Scandinavian routes, the airline is actually in better shape than most, although that clearly isn’t saying much.  It is currently planning to operate just under 30% of its usual capacity in July, with 40 aircraft in service.

The company needs money, however.  SAS is requesting SEK 12.5 billion (£1.0 billion) from Governments to keep it in the air.

SAS demands £1 billion Government bailout

The Swedish Government is already considering a proposal to inject SEK 5 billion into the airline.  The Danish Government has also come out in support of a deal.  The Swedish and Danish Governments are already guaranteeing 90% of a SEK 3.3 billion revolving credit facility which was recently agreed.

Norway has yet to commit, but the country has been offering modest loan guarantees to SAS since March.  This was done to create a level playing field as the country moved to prop up Norwegian.

SAS and the respective Governments are also expecting the holders of its existing debt to take a haircut on repayments in return for their investment, without which the airline would be forced into receivership.  In its last financial report, released in late May, the airline said that it would continue to burn through SEK 500 million to SEK 700 million per month until the end of 2020.

SAS demands £1 billion Government bailout

The Swedish Government currently holds 14.8% of SAS with the Danish Government owning a further 14.2%.  Both of these figures are likely to increase in return for injecting more money.  The Norwegian Government is no longer a shareholder in the airline.

SAS has a slightly more positive view of future demand than other airlines, targetting 2022 for demand to return to pre-coronavirus levels.  In the meantime, it is pushing through 5,000 redundancies, agreeing payment holidays with aircraft lessors and deferring the delivery of new short-haul aircraft.

SAS is planning a further announcement on its plans at the end of June.

Comments (14)

  • Mike says:

    Hopefully the lack of funds will prevent SAS from putting out another advertising campaign that drives away potential customers.

    • the_real_a says:

      huh?

      • Max says:

        Shortly before the COVID-19(84) panic started, SAS published an ad that was (mildly put) very hostile towards their customer base.
        To be more precise, it was hateful propaganda against white people and the Scandinavian cultures.

        • iamfugly says:

          “Hateful propaganda against white people” is a tad extreme isn’t it!?
          The ad was simply dismissive of a handful of Scandinavian inventions/ideas. It was not referenced to colour or non colour of skin!

          • Max says:

            The ad contained a scene were an African social welfare immigrant was talking about his ‘Viking ancestors’. It was simply pure propaganda against their own customer base.

  • pablo says:

    Scanditalia

  • tony says:

    SAS has blocked Eurobonus members from making any new Star Alliance award bookings. Which is worrying because I’ve got enough SK points for a r/t in J to Asia!

  • Jake Mc says:

    Rob: QQ – Why is it you think that only UK airlines (Jet2, easyJet, BA, Virgin etc) have not taken a UK government bailout? Is it simply because one has not yet been offered? I’m not including the CCFF or Large loan scheme as a bailout.

    More interestingly though, apart from Virgin, it does not seem as if they are calling for them. I recognise at first the airlines may have been scared of the potentially ‘unfavourable’ terms offered but across Europe governments have been generous so is it not odd that the UK airlines want to do the same?

    • Rhys says:

      It’s hard to take something that hasn’t been offered! The government made it clear that no bailouts were forthcoming except as a very, very last resort. Virgin’s ongoing saga illustrates this.

      • Jake Mc says:

        Agreed but BA and easyJet don’t seem to be lobbying for one despite favourable terms being offered to their US and European competitors. Is there a reason why?

    • Rob says:

      BA wants to wait until Virgin goes bust and then ask for money. Like someone who murders their parents and then asks for clemency in court because they are an orphan.

      • marcw says:

        I suspect BA and IB will both ask for bailouts Q3/Q4 this year. I guess that’s the reason why they closed down Level Europe – think the next one will be the LEVEL long haul operation at Paris.

  • GK says:

    How about SAS get around to using that Govt cash to refund my ticket. They cancelled my flight 4 days before travel and I filed a refund request on 19 March. It’s 18 June and I’m still waiting. I’ve reminded them many times that EU regulations state a full refund is due within a week – but they have no interest in the law. Of course, if you broke the law, they’d have the police at the boarding gate waiting for you in a second. Pay for a new ticket and they take your funds in a micro-second. But just try and get a refund from SAS. Good luck. I had to use a Alternative Dispute Resolution service last year to claim a refund SAS wouldn’t pay then too – of course I won and they had to pay – so this is nothing to do directly with corona. It’s their business practice to make you waste time complaining while they hang onto your funds, and they just show total disregard for the law. Come on Regulators – how about whacking these airlines with huge fines for breaching the EU law?