Scandinavian Airlines (SAS) announced earlier tonight that they expect to be out of bankruptcy proceedings by 2Q24 & will be joining SkyTeam thanks to Air France-KLM taking a near 20% stake in the airline.
The airline has been struggling in recent years off the back of the COVID-19 pandemic and huge financial downturn.
Without further ado, let’s get into it…
SAS Expected To Be Out of Bankruptcy Proceedings By 2Q24…
Because of this $1.2bn deal between SAS and Air France-KLM, this means that the airline will be leaving Star Alliance, and joining SkyTeam, which will enhance connectivity between the Scandinavian carrier and the big European group.
Commenting on this significant milestone to come out of bankruptcy proceedings by 2Q24 was Carsten Dilling, the Chairman of the Board at the airline:
“This is a significant achievement of our transformation plan, SAS FORWARD. We have carried out a broad, competitive and thoroughly evaluated equity solicitation process, and we are confident that the selected bid is the most favourable for SAS, its creditors and other stakeholders.”
“Securing new capital is one of the key pillars in the SAS FORWARD plan and will provide a strong financial foundation to help drive our airline forward and facilitate our emergence from the U.S. chapter 11 process.”
“While there is still work remaining, I am pleased to see the great progress we are making to be a competitive and financially strong company.”
CEO Van Der Werff Focuses on SkyTeam Appeal…
Adding to this was Anko van der Werff, the CEO of the carrier, who placed a lot of emphasis on joining SkyTeam:
“The agreed investment is a key milestone in our SAS FORWARD plan, and it shows that our new investors believe in SAS and our potential to remain at the forefront of the airline industry for years to come.”
“Further, our move towards a partnership with SkyTeam determines a clear path forward for the company.”
“Through the completion of this process and the opportunities presented by being part of SkyTeam, we will be able to further enhance SAS’ offerings for the benefit of our colleagues, customers and communities. We look forward to building a bright future for SAS together.”
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Air France-KLM CEO: Important Day for the Airline…
Finally, Benjamin Smith, the CEO of Air France-KLM, gave his insight into this deal:
“This is an important day for SAS and for Air France-KLM. We are pleased to be part of the winning bidding consortium selected by the board of SAS.”
“Air France-KLM looks forward to establishing strong commercial ties with SAS. With its well-established position in Scandinavia and strong brand, SAS offers tremendous potential to Air France-KLM.”
“This cooperation will allow Air France-KLM to enhance its position in the Nordics and improve connectivity for Scandinavian and European travellers.”
“We look forward to being a part of this new chapter in SAS’ history and thank the board of SAS for their trust.”
Business as Usual For SAS?
For now, it is business as usual, with no expected disruption for passengers at the airline, but what is interesting is about the Swedish element to the company.
It looks as if the airline will be withdrawing from Sweden as a result of this deal, with the financial statement saying the following:
“SAS will continue to operate and serve its customers as usual throughout the implementation of the transaction, which is likely to entail a filing by SAS AB (i.e., the listed parent company for the SAS group) for a company reorganization in Sweden (Sw. företagsrekonstruktion) (the “Swedish Reorganization”) in 2024.”
“As a result of that process, all of [the Swedish subsidiary’s] common shares and listed commercial hybrid bonds are expected to be cancelled, redeemed and delisted (currently expected to occur during the second quarter of 2024).”
“Consequently, no value is expected for existing shareholders in [the Swedish subsidiary] and only a modest recovery is expected for the holders of commercial hybrid bonds.”
So that may very well be a price to pay, but if the airline can remain in business, then that is going to be the priority under the guidance of Anko van der Werff.
Looking ahead, all eyes will be on the carrier by 2Q24 to see what the airline will look like via the connectivity options of SkyTeam and Air France-KLM.
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