STOCKHOLM (AFP) – Sweden unveiled yesterday a plan to recapitalise struggling Scandinavian airline SAS, which said Denmark was also planning to the plan to help it weather the effects of the COVID-19 crisis.
Sweden’s Industry Minister Ibrahim Baylan said the government was willing to inject up to SEK5 billion (USD534 million).
The project requires approval from lawmakers.
SAS said in a statement that the Danish government would also contribute to the recapitalisation but did not provide a figure.
In its statement, SAS said it estimates its funding needs some SEK12.5 billion and plans to provide more details about the recapitalisation and related measures by the end of the month.
Like many airlines, SAS has been hit hard as the impact from the COVID-19 pandemic has wiped out demand for air travel.
In mid-March, the airline furloughed 90 per cent of its staff and in late April SAS announced it was laying off 5,000 staff, accounting for about 40 per cent of the company’s workforce.
Sweden and Denmark, SAS’ two largest shareholders, have already stepped in to help the airline. At the beginning of May they agreed to provide a 90 per cent guarantee for a revolving credit facility of SEK3.3 billion so the airline would have more access to cash.