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Norway ready to reclaim stake in Scandinavian airline SAS

Norway said on Tuesday it was willing to once again become an owner in the struggling Scandinavian airline, co-owned by Sweden and Denmark, four years after pulling out.

a SAS flight
Photo: Tony Webster/Flickr.com

“Given the situation of the company … we can, on certain terms, accept to convert outstanding debt into shares if we consider this necessary,” Norwegian Trade and Industry Minister Jan Christian Vestre said in a statement.

Norway sold off its stake in the airline between 2016 and 2018.

But it issued a guarantee of 1.5 billion Norwegian kroner ($154 million) to SAS during the pandemic to ensure the airline’s liquidity when it was hit hard by travel restrictions.

“The Norwegian state will not contribute new capital and will not be a long-term owner of SAS,” Vestre insisted.

SAS is also co-owned by Sweden and Denmark which each hold stakes of 21.8 percent.

The Danish government said on June 10 it was prepared to increase its stake in SAS to up to 30 percent and write off debts of 3.5 billion Danish kroner ($500 million).

The Swedish government has said it would not inject more capital into SAS, but would propose to parliament that SAS be authorised to convert the debt it owes to the state into equity capital.

SAS posted a net loss of 1.5 billion Swedish kronor ($150 million) in the second quarter, compared to a net loss of 2.4 billion kronor a year earlier.

Stressing that the company’s survival was at stake, SAS management in February announced a savings plan dubbed “SAS Forward”. In early June, it announced further plans to raise 9.5 billion Swedish kronor ($968 million) in new capital.

It also aims to convert debt worth around $2 billion into shares SAS said the Norwegian government’s announcement “is appreciated and an important step towards the success of SAS Forward”.

After cutting thousands of jobs due to the pandemic, SAS’ almost 900 pilots are now threatening to go on strike on June 29 over job security and wage issues.

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TRAVEL

SAS pilots approve new collective agreement

93 percent of Danish SAS pilots have approved the agreement that ended strike action last month.

SAS pilots approve new collective agreement

93 percent of the Danish SAS pilots have voted yes to an agreement which ended strike action but also means, among other things, redeployments, longer working weeks and lower wages.

This was announced by Dansk Metal on Saturday morning. The pilots could have voted yes or no on the new collective agreement until midnight on Friday evening.

Pilots in Sweden and Norway have also approved the agreement.

Keld Bækkelund Hansen, head of negotiations at Dansk Metal, said “I am incredibly happy. It is a bit atypical to see that a collective agreement negotiation ends in agreements being made that reduce wages and conditions.”

“So of course it was exciting how our members viewed the new collective agreement. But they could also see that it was a necessity in relation to SAS’s situation,” he added.

The agreement comes after months of tug-of-war that finally saw SAS and the striking pilots reach a collective agreement on 19 July. It helped end a two-week strike.

Part of the background to the conflict between SAS and the pilots was that, during the COVID-19 pandemic, SAS dismissed around half of its pilots.

With the new collective agreement, however, all 450 dismissed pilots will be offered re-employment in the future.

At the same time, SAS pilots will see a 25 percent pay cut, and the limit for the workload is raised from 47 hours to 60 hours per week.

But even with strike action over and a collective agreement supported by pilots, the problems are far from over for SAS, which has suffered major financial losses during the conflict.

Currently, the airline plans to begin a reconstruction in the United States under bankruptcy protection in a so-called Chapter 11 process.

Bankruptcy protection will mean that SAS can continue to operate and pay wages while the process is ongoing.

SAS is seeking financing of up to $700 million- slightly more than DKK 5.1 billion.

SAS press manager Alexandra Lindgren Kaoukji said in a statement: “We are very happy and look forward to continuing our ongoing Chapter 11 process and our work to ensure a strong and sustainable airline for many years to come.The positive result of the vote will help SAS to attract long-term investors while we go through the Chapter 11 process and work further with the SAS Forward plan.”

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