Airline SAS losses deepen, warns bankruptcy protection to drag out
By Anna Ringstrom
STOCKHOLM (Reuters) -Crisis-hit Scandinavian airline SAS on Wednesday reported a much deeper loss in its August-October quarter than last year and said it will take longer than expected to complete its bankruptcy protection process.
The long struggling carrier, which sought bankruptcy protection in July in the United States in a bid to slash costs and debt, said its fiscal fourth-quarter pretax loss grew to 1.70 billion Swedish crowns ($161 million) from 945 million.
SAS, whose biggest owners are Sweden and Denmark, said in a statement it aimed to end its bankruptcy protection during the second half of 2023. In September it said it hoped to conclude it within 12 months of its launch.
Chief Executive Anko van der Werff told Reuters he expected the process to end relatively early in the second half of the year.
“We had an internal deadline for some of the negotiations to end by October. We didn’t do that. The cabin crew (agreement) in Norway for instance was signed last night. So, yes, there is a little bit of delay,” he said.
SAS and Norwegian cabin crew unions on Tuesday inked a new collective agreement. Lowering costs for staff, especially pilots, is a core part of SAS’ rescue plan. The carrier in July reached a deal with most pilots following a strike that grounded most of its planes for two weeks.
The former flag carrier has also renegotiated contracts with many aircraft lessors.
SAS said on Wednesday the implementation of the process in the United States was likely to entail additional legal proceedings in other markets too.
“As a result, there is no assurance that there will be any recovery for the shareholders of SAS,” it said.
SAS hopes to cut costs by 7.5 billion crowns, raise 9.5 billion in new equity – partly from new investors – and convert 20 billion of debt into equity.
The plan is expected to substantially dilute the value of exiting owners’ already battered shares. The Swedish government has said it won’t inject more cash while Denmark has said it might.
SAS, whose busiest season is summer after it refocused from business travel to leisure, said full-year pretax loss adjusted for extraordinary items widened to 7.94 billion crowns despite sales doubling to 31.8 billion, matching guidance given in September.
SAS’ shares, which are down 51% this year, were broadly flat on Wednesday.
(Reporting by Anna Ringstrom, additional reporting by MArta Fraxkowiak in Gdansk, editing by Terje Solsvik, Stine Jacobsen and Conor Humphries)