Scandinavian Airlines Gets $1.5 Billion to Survive Crisis
Scandinavian Airlines said Tuesday it is getting an aid package worth 14.25 billion kronor ($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 Associated Press (AP) reported.
The package includes issuing new shares and converting bonds into shares and it was also financially supported by its third main owner, the Knut and Alice Wallenberg Foundation, a Swedish public and private foundation.
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 general shareholders' meeting and the European Commission.
Meanwhile, environmental activists spoke out against rescuing an industry that emits high levels of climate-warming gases like CO2.
According to AP, 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).”