After a turbulent period of uncertainty, SAS Scandinavian Airlines, one of Scandinavia’s leading airlines, has reached a significant milestone: the completion of its comprehensive restructuring process marks the beginning of a new era for the company.
With $1.2 billion in exit financing from a new ownership consortium and a revised business model, SAS repositioned itself to meet the challenges of the global aviation market and secure a sustainable future.
Restructuring: A complex and necessary step
SAS’s financial distress, exacerbated by the COVID-19 pandemic, led to the airline’s voluntary filing for Chapter 11 bankruptcy protection in the United States in July 2022. These measures will allow the airline to restructure its debt while maintaining operations. In parallel, SAS launched a reorganization process in Sweden, which began in March 2024, to achieve financial stabilization at European level as well.
The restructuring process, completed on August 28, 2024, included several key elements, including a debt reduction of more than $2 billion, a fleet adjustment and new agreements with key stakeholders. Particularly notable is the exit financing, which consists of $475 million in new unlisted equity and $725 million in secured convertible bonds. These funds were provided by a consortium consisting of Castlelake, Air France-KLM, Lind Invest ApS and the Danish state.
New ownership consortium: The strategic realignment
The new ownership structure, which will see the consortium control 86.4% of SAS’s share capital, will take the airline into a new phase in its corporate history. Air France-KLM, a member of the consortium, has acquired 19.9% of the shares, investing a total of $144.5 million. Interestingly, this share could increase further in the coming years. Air France-KLM has contractually secured the right to become the majority shareholder of SAS under certain conditions, which would allow for deeper integration into the Skyteam alliance network.
The strategic participation of Air France-KLM represents a significant opportunity for SAS to strengthen its market position and exploit synergies. Both airlines have already agreed on interline and codeshare agreements that will come into force on September 1, 2024 and will more closely link the hubs and networks of the two companies. This cooperation will be further strengthened by SAS joining the Skyteam alliance, of which Air France and KLM are founding members.
A new management team for a new team
As part of the restructuring, a new ten-person management team has been appointed to take responsibility for the future direction of SAS. This team is led by Kåre Schultz, an experienced manager from the pharmaceutical industry who previously worked at companies such as Novo Nordisk, Lundbeck and Teva Pharmaceutical Industries. Schultz succeeds Carsten Dilling as CEO and brings with him extensive experience in restructuring and managing companies.
These personnel changes reflect SAS’s desire to bring fresh leadership and further increase efficiency and operational performance. The company has already made progress in implementing its restructuring plan « SAS Forward », which includes a cost reduction of SEK 7.5 billion (USD 735 million). In July 2024, SAS also recorded the highest monthly profitability in its history – a positive sign for the future.
Future prospects: Focus on market opportunities
For SAS, the completion of the restructuring process means not only financial stabilization, but also a strategic realignment. President and CEO Anko van der Werff emphasized in a statement that the company is now ready to continue the transformation it has begun and to face the challenges of the market. A key goal remains the commitment to sustainability: SAS continues to strive to achieve net zero emissions by 2050 and thus play a pioneering role in the field of environmentally friendly aviation.
The exit financing and integration into the Skyteam network provide SAS with the opportunity to capitalize on growing market opportunities while strengthening its position in global aviation. The next few years will be crucial to see how successfully the airline capitalizes on these opportunities and achieves its ambitious goals.
A new beginning with many unknowns
The successful completion of the restructuring marks an important turning point for SAS, but the challenges remain great. The airline must now prove that it can not only survive financially, but also grow sustainably and hold its own in a highly competitive market. The new owners, the management team and the strategic partnership with Air France-KLM will play a central role in this. For SAS, this is the beginning of a new chapter – a chapter that will determine whether the company can play a leading role in European aviation in the long term.
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