SAS has today filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code. The process is different from bankruptcy or administration in other parts of the world and will allow the airline to reorganize their capital structure and reduce costs.
On Tuesday (July 5, 2022), SAS announced that they have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code. The court-supervised process in the U.S. is different from a bankruptcy or administration proceedings in other parts of the world. The filing will allow the airline to reorganize their capital structure, truncate untenable contracts, reduce costs and complete a financial restructuring. Today’s announcement follows the start of a strike by SAS Scandinavia pilots’ unions on Monday July 4, 2022. The Chapter 11 filing will not impact SAS’ operations and flight schedule (although the strike will) and the Board of Directors and management will continue to be in charge of the airline’s affairs. SAS’ reservations, customer service, SAS EuroBonus and all other guest service systems will continue as normal.
In Tuesday’s announcment, SAS’ Chairman of the Board, Carsten Dilling, said,
“We have been working closely with the SAS management team to progress SAS FORWARD. As part of that process, SAS has also been preparing for the option to utilize court restructuring proceedings in order to address the Company’s financial situation. The on-going strike poses significant challenges to our ability to succeed with our transformation. The Board has concluded that legal tools are required to make progress in our ongoing negotiations with key stakeholders, and ultimately to succeed in making SAS a competitive and financially strong business. The process we have commenced will enable SAS to continue our more than 75-year legacy of being integral to Scandinavian infrastructure and societies. We are confident that the actions we are taking will strengthen SAS’ ability to capture the significant opportunities ahead as the industry continues to recover from the pandemic.”
Also commenting on the airline’s reorganization filing, SAS’ President and Chief Executive Officer, Anko van der Werff, added,
“Over the last several months, we’ve been working hard to improve our cost structure and improve our financial position. We are making progress, but a lot of work remains and the on-going strike has made an already challenging situation even tougher. The chapter 11 process gives us legal tools to accelerate our transformation, while being able to continue to operate the business as usual. We will continue to build back the network connectivity, products and service our customers expect, and we will continue to do so throughout this process and beyond. I am convinced that this process will enable us to become an even better airline for our customers and a stronger business partner in the years to come. Becoming a more competitive airline will require the full team’s effort and burden-sharing from all stakeholders. We urge SAS Scandinavia pilots’ unions to end their strike and engage constructively as part of this process.”
SAS is the leading airline in Scandinavia, normally carrying over 30 million passengers annually from its main hubs in Copenhagen, Oslo and Stockholm to 125 destinations in Europe, the US and Asia (pre-pandemic figures). The company has targeted a reduction in carbon emissions by 25 percent by 2025, compared to 2005 levels, and hopes to transition to 100% biofuel for domestic flights by 2030. SAS also offers ground handling services, technical maintenance and cargo services. The carrier is a founding member of the Star Alliance, which is celebrating their 25th anniversary in 2022.
Source: SAS