Scandinavian Airlines (SAS) still remains under chapter 11 bankruptcy protection, and has in recent news agreed on a sale-leaseback with aircraft lessor Aviation Capital Group (“ACG”).
The agreement accounts for ten new Airbus A320neo aircraft, and the agreement itself stands for a long-term financing of the aircraft, which are expected to be delivered by Q1 of FY2024.
The Scandinavian carrier SAS has been no stranger to the spotlight for the past half year, as the airline fell under Chapter 11 bankruptcy before a U.S. Court in a heap during the Summer season 2022. This action followed the pilot strike which emerged after negotiations failed.
In a reconstructive move back in September of 2022, SAS phased out a number of aircraft, including almost brand new Airbus A350s and A320neos.
However, the carrier has seen deliveries of new A320neo aircraft amid the restructuring, and has just recently established an agreement with lessor Aviation Capital Group (ACG), for the long term financing and sale-leaseback of further 10 new A320neo airframes.
Anko van der Werff, CEO & President of SAS, said the following on the agreement: “We are pleased to renew our long-term strategic partnership with ACG, one of the world’s leading aircraft financing partners,”
“We continue to make progress with our transformation plan and these new sale and leaseback agreements are an important part of that – securing competitive financing for our renewed fleet of modern and fuel-efficient aircraft.”
Speaking for the lessor, Aviation Capital Group’s CEO and President, Tom G. Baker, responded: “ACG is honored to welcome SAS as a renewed strategic partner.”
“We are delighted to support the SAS FORWARD transformation plan with this sale-leaseback transaction for SAS’ latest technology and fuel-efficient aircraft,”
WIth the agreement in place, SAS is expected to take delivery of the ten A320neo aircraft in question through the first quarter of FY2024.
The Chapter 11 background
On July 4 2022, the pilots of SAS decided to perform a “walkout”, better known as a strike, after the negotiations between the leadership and the pilots, including their respective unions, failed to make ends meet.
SAS CEO, Anko van der Werff, said in an interview shortly after the striking commented: ”It is primarily bad news for the airline and our customers,” as well as calling the strike in the peak travel season of summer ”devastating”.
With SAS already struggling economically before the strike, as with other airlines, especially due to the Covid-19 pandemic, the estimated costs of refunds and lost ticket sales coming in at an estimated $9 million daily wouldn’t make the economy of the Scandinavian carrier much better.
The strike was the final piece of the puzzle to make SAS file for a Chapter 11 bankruptcy, which they did on July 5th under U.S. bankruptcy court.
Though, the airline was given the “all-clear” to remain operative because it met the requirements to do so.
Evidently, this was no good news for the airline, as it led to multiple cost-cutting actions being taken at a racer pace, which eventually led to the carrier rejecting ten of its aircraft, with some of them being almost brand new.
Amongst the rejected aircraft are 5 widebody aircraft, whereas two are A350-900s and another three are A330-300s. The other airplanes in question are one Boeing 737-700, one Airbus A321ceo, and three Airbus A320neos.
At the time of writing, only five of the aircraft can be seen with a recent flight history in SAS.