Scandinavian Airlines (SAS) needed to issue further warnings this summer on Wednesday for flight cancellations, primarily because airlines lack the crew to carry them out. SAS is also experiencing delays in aircraft delivery, especially turmoil at European airports, and its own economic crisis as the threat of bankruptcy increases.
The needy airlines, which have long been a symbol of Scandinavian pride and unity, have been hit by a series of crises in recent years. The Corona crisis is far worse, and like many other airlines around the world, SAS is due to uncertainties in passenger demand, staffing issues after crew members are dismissed or taken off during a pandemic. , I had a hard time reaching the altitude of the cruise again. At least huge debt and operating losses.
Airlines warned earlier this spring that they may have to cancel about 4,000 flights scheduled for this summer, and that number is currently increasing. “Of course, even if most passengers were rebooked on another flight on the same day, this would be difficult for everyone involved,” said SAS spokesman Tonje Bjerve Sund in Norway. TV2 on wednesday. “However, there may be more cancellations during the summer.”
It’s the latest in a series of bad news For SAS. Stockholm-based airlines reported a loss of SEK 1.5 billion in the first quarter last week, reporting that they may not be able to continue flying without state guarantees. The Swedish government, one of the largest shareholders with a 21.8% stake in SAS, has provided billions of dollars worth of support in recent years, but this week it will not provide any more taxpayer funding to SAS. Revealed. The government is ready to convert SAS’state debt to more shares, but new capital will need to be raised from the private market.newspaper Dagens Næringsliv (DN) As reported in May, SAS’s own board already knew that the Scandinavian government couldn’t invest any more fresh capital if private investors didn’t provide at least that much. Failure to do so may violate EU regulations.
The 21.8% Danish government, another major shareholder of SAS, was considering further support for airlines this week as well. Denmark is at greatest risk if SAS goes bankrupt, as SAS is the overwhelmingly dominant airline at Copenhagen’s Kastrup Airport (CPH). Most of the airline’s activities in Kastrup are built around SAS, which also uses CPH as its primary hub on intercontinental routes. New individual owners who are leveraged at SAS can withdraw them.
“In the play”
With SAS debt currently reaching nearly 50 billion kroner, the airline is functioning broadly as potential investors need to bottom out and raise new capital from the market. Is considered to be. SAS shares have fallen about 65% over the past year.
Norway sold out its airlines in 2018, avoiding the cost of SAS’s recent losses, but the Norwegian state during the Corona crisis to continue operating routes for important airlines within Norway. Provided hundreds of millions of support. It also guarantees a critical loan of SEK 1.5 billion and can be converted into shares for potential ownership gains. Frode Steen, a professor at NHH, a Norwegian business school specializing in the aviation industry, said Norway is at risk of losing its money if Norwegian trade minister Jan Christian Vestre does not provide further support. He thinks it’s better for the Norwegian government to accept the loss now than to inject more money into SAS and later lose billions of dollars.
“From the outside, unfortunately SAS is a poorly operated airline,” Steen told the newspaper. Aftenposten.. “They are struggling with almost everything. They can’t get employees in the company to understand the need for cost savings and better operating models. They are top heavy. They are (various types of aircraft). We are wrestling with the fleet and now have catastrophic liquidity issues. “
Others want to bail SAS. “But all the signs are that airlines are about to break out of Scandinavian state rule,” the edited newspaper said. Dagsavisen on wednesday. Since the end of World War II, SAS has served as a “strong symbol of Scandinavian unity and quality,” and it is hoped that all three Scandinavian governments will bail out SAS again. It’s not just newspapers. “SAS forward” during this summer.
“We support purchases by some states of SAS,” edited. Dagsavisen.. “Norway relies entirely on a strong aviation environment and fully functioning as an alternative to Norwegian Airlines.” Otherwise, the newspaper warned, SAS warned that “unacceptable” wages. It could be another foreign company with working conditions. This paper is one in which all three Scandinavian states closely track the situation and urge Norway to act as a “constructive creditor and potential investor.”