Scandinavian Airlines gets $1.5 billion to survive crisis

STOCKHOLM — Scandinavian Airlines said today it is getting an aid package worth $1.5 billion after an agreement with its main shareholders, securing the carrier’s survival amid the COVID-19 crisis.

The governments of Sweden and Denmark, which own shares in the airline, were partly financing the recapitalization plan, SAS said in a statement.

The aid package was also financially supported by its third main owner, the Knut and Alice Wallenberg Foundation, a Swedish public and private foundation.

The package includes issuing new shares and converting bonds into shares.

In the statement, SAS said that amid the global travel restrictions caused by the pandemic it had taken measures “to radically reduce costs as a result of the decline in demand, which is not expected to return to pre-COVID-19 levels before 2022.”

The recapitalization plan is subject to approvals by a shareholders’ meeting and the European Commission.

SAS Chief Financial Officer Torbjorn Wist told a webcast news conference that he expects approval by the Commission of the Danish and Swedish government aid. Sweden holds nearly 15% and Denmark some 14% of the shares.

CEO Rickard Gustafson said the COVID-19 crisis will affect aviation demand for years to come. In April, SAS’ seat capacity was down 95% and 90% of staff were on temporary lay-offs, the airline said.

“In early March, overnight we had a different world to manage,” Gustafson said. “It is a different game now.”

Gustafson said SAS had set a 4 billion-kronor ($429 million) cost cutting plan that includes shedding up to 5,000 full-time positions — roughly half of the total workforce.

Environmental activists spoke out against rescuing an industry that emits high levels of climate-warming gases like CO2.

Two protesters were removed Tuesday from an airplane at the airport of Goteborg, Sweden, after refusing to sit down as the aircraft taxied. The men, one aged 65 and the other in his 40s, were detained on suspicion of violations of the Aviation Act, police said.

One them said live on Facebook that “SAS is getting crisis aid now. That money should be given to the climate.”

On the group’s Facebook page activist Göran Boardy wrote that “during this pandemic, we have a unique opportunity to start the conversion necessary to achieve the goal of the Paris agreement (to reduce carbon emissions).”