SAS Airline close to complete collapse

RobitTV

The troubled airline has been the subject of persistent bankruptcy rumours in According to reports in several Swedish media sources, Scandinavian Airline SAS is reported to be close to bankruptcy with staff set to be told to take a pay cut or face losing their jobs.

According to a report in the Expressen daily, intensive last minute discussions are ongoing within the Swedish government over how the immediate situation, and the prospect of bankruptcy, can be managed.

The loss-making airline has been told by its banks that state guarantees from major shareholders - Sweden, Norway and Denmark - are required before an extension is granted on a 4.7 billion kronor ($700 million) credit facility.

According to a report in the Dagens Industri business daily on Friday, the three Scandinavian countries this week sought EU approval for the guarantees.

According to a report in the Dagens Nyheter daily on Sunday, SAS staff are set to be presented with an ultimatum to take a pay cut or face losing their jobs.

http://www.thelocal.se/44358/20121111/

donvito99

They've been teetering on the edge for a decade now.

If they do go, thats a famous brand recognised the world over down the drain. They were pioneering in their day, an airline representing 3 nations pre-EU.

They've always represented themselves well in DUB. I hope something can be sorted out, and they stay flying.

Strumms

jeeez thats bad news. So many employees affected by this just hope it donest come to pass. For what it's worth, well quite a bit hopefully I flew with them quite a bit most recently back in March and they are an excellent airline. Cabin Crew the best I have experienced very genuine friendly and they provide very personable service. One wonders apart from the natural disposition of the European ecomemy how it came to pass that they are in this position.

On another note I remember being booked DUB - CPH for work about 6 years ago on SAS only to end up on 'Snowflake' airlines, a subsidary. The MD ?? was in serious rough nick inside but they staff were class, always remembered it. And being in the very back and being tossed around big time in the chop in the climb out of DUB.

keroseneboy

On short haul Norwegian Air Shuttle is giving them very serious competition.

shelbourne ultimatum

Rumours of SAS' death are premature.

The EU are said to have approved the DK,SE and NO govts giving loan guarantees to banks involved in financing SAS.

However, the price seems to be 1000 job cuts and a 15% pay cut for all remaining staff.

There are some serious rock star wages in SAS that need addressing if it is to have a chance long term.

shelbourne ultimatum

An update for you - SAS is not going bust.

Here are just released details of its restructuring plan:

SAS launches comprehensive plan to improve profitability and secure long-term financial preparedness - ...

... new union agreements must be signed in the near future

Targeting approximately 3 bn SEK of annual improvement from cost reductions and organizational restructuring and approximately 3 bn SEK increased liquidity from asset sales ~ New 3.5 bn SEK Revolving Credit Facility from Banks and Core Shareholders to secure financial preparedness conditional on signed union agreements and parliamentary approvals ~The Board unanimously supports the plan and recommends all employees to do the same ~ The Board will meet again on Sunday November 18, 2012 to decide if the conditions for the implementation of the plan exist

The 4 Excellence Plan, which was announced in September 2011, is on target to deliver approximately 5 bn SEK in EBT effect. Despite this success, SAS foresees the need for further improvements to secure its long-term competitiveness. In a challenging environment for airlines, SAS must take decisive action to address its cost structure, improve its capital structure on a long-term basis, and take steps to reduce the negative impact on equity in 2013 due to changed pension accounting regulations.

4 Excellence Next Generation to improve profitability
The Board of SAS has approved the 4 Excellence Next Generation (4XNG) plan to address the issues facing SAS. The 4XNG plan will improve EBT by approximately 3 bn SEK on an annualized basis and improve the overall cost flexibility through:

· New union agreements for personnel
· Centralization of administration functions
· Reduction of compensation to market levels
· New pension terms
· Outsourcing of Call Centers and Ground Handling

1.5 bn SEK in improved EBT is expected to be realized in the financial year 2012/13, with most of the remaining annualized benefits realized in the financial year 2013/14. The plan is self-financing and requires no new capital. The restructuring cost and one-off implementation costs will be approximately 1.5bn SEK, whereof 0.9-1.0 bn SEK in financial year 2012, and will be fully funded from expected savings.

New pension terms will mitigate the need for new equity
As a result of the revised IAS19, that will be applied by SAS as of November 2013, the SAS Group's shareholders' equity will be reduced when all unrecognized deviations from estimates and plan amendments will be recognized in full in shareholders' equity. The 4XNG plan will result in a transition, for the majority of the employees, from the current defined benefit plans to defined contribution plans. These changes will mitigate the negative impact on equity by an estimated 2.8 bn SEK, reduce defined benefit obligations by 19 bn SEK (58%) and reduce volatility in future earnings resulting from changes in pension assumptions. These pension changes, together with the other actions announced today, provide SAS with the confidence that it will retain a strong equity position.

Asset Disposal and Financing Plan to increase liquidity
The Plan involves a commitment to complete an asset disposal and financing plan, which totals approximately 3 bn SEK in potential net cash proceeds. The proceeds will improve SAS' internally generated financial preparedness and allow SAS to further reduce its financial leverage. The asset disposal and financing plan includes:

· Widerøe, a subsidiary regional airline in Norway
· Airport realated real estate interests;
· Ground handling; and
· Aircraft engines

In addition, SAS will also actively consider opportunities to realize further value from its financed aircraft portfolio and other assets.

3.5 bn SEK Revolving Credit Facility conditional on signed union agreements and parliamentary approvals
SAS has reached an agreement to increase its existing 3.1 bn SEK revolving credit facility to 3.5 bn SEK and extend the term of the facility to 31 March 2015. SAS's bilateral facilities in the amount of 1.25 bn SEK will be cancelled as these facilities provide limited benefit at a significant financial cost. This new revolving credit facility alongside SAS' cash resources will provide the required financial preparedness while it completes its asset sales and realizes the full benefits from its cost reduction plans.

The new revolving credit facility is being provided by seven current lenders and SAS' core shareholders (The Kingdom of Denmark, the Swedish State, the Kingdom of Norway and KAW) on equal terms. The availability of the new revolving credit facility is subject to final documentation, parliamentary approval where required, and it is conditional on signed union agreements that are a central and integral part of the 4XNG plan.

SAS has initiated discussions with its relevant unions and will initiate a broad communication effort towards its employees to obtain their consent to the changes in the union agreements within a very short time.

Comprehensive plans create a financially strong SAS
The plans announced today are supported by our core shareholders and enable SAS to position itself as a strong, financially self-sufficient airline on a long-term basis. In connection with the approvals of the plans, SAS has set new financial targets.

Run_to_da_hills

FR vultures hovering overhead.

flanzer

Run_to_da_hills wrote: »

FR vultures hovering overhead.

Norwegian Air shuttle more like. It's not going to be easy for SAS going forward with them about

Tabnabs

flanzer wrote: »

Norwegian Air shuttle more like. It's not going to be easy for SAS going forward with them about

Bjørn Kjos is on the record as saying that the worst thing that could happen Norwegian is for SAS to fold. He cited the example of Swiss/Swissair and how they have emerged much stronger and leaner. For him, the high ticked prices SAS charge are a dream come true...