Sweden and Denmark have unveiled a plan to rescue their struggling flagship carrier SAS, one of numerous airlines hit hard by the Corona-virus and its travel restrictions which effectively wiped out all passenger air traffic.
The planned re-capitalization, may further increase the share of the state in Scandinavia’s flagship carrier, which has suffered greatly during the Corona-virus, having furloughed 90% of its staff and announced massive layoffs.
According to the re-capitalization plan, which is conditioned on environmental measures, presented by Swedish Industry Minister Ibrahim Baylan, the government is willing to inject up to SEK 5 billion ($534 million) into the ailing company.
State-owned company Swedavia, which owns and operates ten airports across Sweden, is also set to receive support.
The money, however, comes with an array of stricter environmental requirements, according to Per Bolund. Among other things, the company is expected to reduce emissions in line with the Paris Agreement.
Sweden will only provide capital to SAS if there are sharp and quantitative requirements for reduced emissions from the company, Finance Minister Per Bolund of the Green Party told national broadcaster SVT.
We are now entering a new green era for Swedish aviation, he said, calling the aid package “historic”.
However, the carbon footprint of an airline traveler is 10 times the amount of a passenger sitting in a ordinary city bus. Trains are by all means a cleaner form of transportation nowadays.
According to SAS, the Danish government is also set to contribute, although no figures have been presented yet.
“SAS is central to both Scandinavia’s and Denmark’s accessibility, Danish exports and business and Danish workplaces”, Finance Minister Nicolai Wammen said, as quoted by Danish Radio.
SAS estimated that its funding needs some SEK 12.5 billion ($1.35 billion) and plans to provide more details about the re-capitalization and related measures by the end of the month.
Sweden and Denmark have already stepped in to help the airline weather the crisis. At the beginning of May, they agreed to provide a 90% guarantee for a revolving credit facility of SEK 3.3 billion ($360 million) so the airline would have more access to cash.
Scandinavian Airlines, most often referred to as SAS, is the flagship carrier of Denmark, Norway, and Sweden.
The company is headquartered in Solna, Sweden and prior to the crisis operated some 180 aircraft to 90 destinations. Its main hubs are Copenhagen Kastrup, Stockholm Arlanda, and Oslo Gardermoen.
Sputnik / ABC Flash Point Aviation News 2020.