AMSTERDAM – SAS has been able to reach an agreement with the lessors for existing aircraft and equipment lease agreements to redress the terms.
The step to redressing the terms for the aircraft terms, which is a total of 36 planes. This amendment is a crucial step toward reconfiguring the fleet and being able to save up to SEK 7.5 billion (€0.69 billion) annually under the SAS FORWARD plan.
These agreements have been approved by the U.S. Bankruptcy Court for the Southern District of New York.
The agreement has been done with 10 different lessors – which include AerCap Holdings, Aergo Capital, Aircastle, and Avolon – which represent 36 different aircraft, 3 wide bodies, and 33 narrowbodies, as well as certain equipment related.
These amendments are good for a saving of at least SEK 850 million (€78 million) to SEK 1.0 billion (€90 million) a year, which is able to constitute a reduction of SEK 7.5 billion a year.
Anko van der Werff, CEO of SAS, has commented on this:
“We continue to make progress in our chapter 11 process. The amended lease agreements allow us to reconfigure our fleet and improve our cost structure, which is a key element of our SAS FORWARD plan.”
“We are grateful to our lessors for working constructively with us as we continue taking necessary actions to become a more competitive airline and a stronger business partner to them.”
“We are continuing to pursue additional lease amendments so we can achieve our targets.”
On the 5th of September, Anko was also present at the World Aviation Festival, where he gave a more detailed response as to why SAS went into Chapter 11, and it goes as follows:
“So it’s very difficult to renegotiate with many of the parties that surround you, if you like, right?”
“I mean, as airlines, we have to compete with half the world, but many of our suppliers, if you like, from airports too, well, aircraft manufacturers or distribution systems are also in, there’s typically far less competition.”
“So what chapter 11 at least allows you to do is renegotiate some of those deals that otherwise would be anchored, that all would be in the years to come.”
“And it’s very tough because you have to reassess to renegotiate and become a chief negotiations officer for years these months. But it is a process that allows you step-by-step towards becoming a healthier airline.”
“Chapter 11 allows you to sit down with your lessors; you have a moment in time, a few months, in which you can then say, ‘Okay, this doesn’t work for me anymore, and either we’re going to renegotiate on the length of turn point for specific aircraft, or you can reject aircraft.”
“We’re in the process of rejecting aircraft.”
While Anko has a very good point about rejecting or reorganizing the entire fleet, this does not excuse him for bringing 2 airlines, Avianca and SAS, to a chapter 11 bankruptcy state or promising your pilots to pay for their licenses and later turning back on your words. Going to chapter 11, whether it will make a good impact or not must be done without neglecting others.