In a statement on Tuesday, Scandinavian airline SAS announced it was filing for voluntary Chapter 11 bankruptcy in the United States. SAS is the national airline of Denmark, Norway, and Sweden. The SAS pilot’s union called for a strike on Monday, apparently precipitating the bankruptcy filing.Chapter 11 allows for a legal process for financial restructuring under Federal Court supervision. The announcement contained a clause indicating SAS operations and flight schedules are unaffected by the chapter 11 filing, and SAS will continue to serve its customers as normal. However, the ongoing strike by SAS Scandinavia pilots’ unions will impact the flight schedule and according to FlightAware, nearly 80% of its flights have been canceled by yesterday. The Company expects to meet its go-forward business obligations in the near term. SAS’ cash balance was Swiss Kronas 7.8 billion (approximately USD $742,000,000) as of June 30, 2022.
The SAS pilot’s strike has a negative impact on the liquidity and financial position of the airline and, if prolonged, such impact could become material. The Company is in discussions with a number of potential lenders with respect to obtaining additional debtor-in-possession financing.
Anko van der Werff, President and Chief Executive Officer of SAS, said, “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.”
