Recently Bankrupt Airline SAS Receives Court Approval to Maintain Operations

An SAS Scandinavia airlines Boeing 737 taxiing with more SAS aircraft parked in the background., CC BY-SA 3.0, via Wikimedia Commons

LONDON – Not long ago, northern European airline Scandinavian, or SAS, declared itself bankrupt before a U.S. Bankruptcy Court. Nevertheless, it has received a green light from the court to continue to operate its business. 

The airline might be under Chapter 11 bankruptcy, but it has the minimum requirements to operate its business. The court has specifically approved the bankrupt European airline to continue its business normally throughout the bankruptcy process.

Despite this, there are several conditions that the airline has to abide by. These require the airline to provide pay slips for employees and benefits, to operate the airline in the ordinary course, and to honour the already existing loyalty programs advertised.

It must honour the SAS’s EuroBonus loyalty program, and the numerous contracts signed with travel agencies, partners, vendor and suppliers, to ensure minimum impact on stakeholders of SAS.

SAS must pay third party vendors and suppliers under normal terms and conditions on or after the 5th of July, and lastly, the airline must pay all taxes, insurances and fees surrounding regulatory matters throughout the bankruptcy period. 

Anko van der Werff, President and Chief Executive Officer of SAS, said, “These court approvals confirm that our operations will continue as usual as we begin our restructuring process in the U.S.”

“We remain focused on providing the service our customers are used to, while accelerating our efforts to implement key elements of our comprehensive business transformation plan, SAS FORWARD.”

“Ultimately, our plan is about improving our financial position and continuing our more than 75-year legacy as Scandinavia’s leading airline.”

Despite the bankruptcy process, the airline’s flight schedule remains unchanged and largely unaffected, and services are expected to run normally. The airline will also need to honour SAS EuroBonus programs, meaning that loyal SAS customers can still utilise the mileage collection systems.

Nevertheless, nothing always goes as planned, as pilot strikes in light of the bankruptcy process will after all affect flight operations. 

A Better SAS? 

SAS has been facing financial difficulties since the start of the pandemic. This means that the airline has to rethink its strategy, and it looks like its fleet composition might change.

SAS has taken delivery of the new A321LR, which will better position itself in the European or Scandinavian to the U.S market, as it shies away from operations of wide-body fleets such as the A350 and the A330.

A Better SAS? 

The ongoing Russian war and the rise of commodities will not make SAS’s financial situation any better. Moreover, the Chinese market, which is somewhat important for the airline is not yet signalling a  strong return.

With older fleets out of the way and newer cost-effective fleets coming in, the airline is poised to emerge in front of the bankruptcy process stronger than

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