The government has agreed to provide financial support to SAS, but the funding must be offset by a larger share in the capital structure of the airline, TV2 reports.
The reduced travel activity due to the coronavirus has significantly affected SAS and forced the company to fire 5,000 employees.
Already in March, both Denmark and Sweden promised to help SAS financially, and later on it was estimated that the airline would need approximately 9 billion kroner to overcome the consequences of the COVID-19 crisis.
“This amount tells us that SAS is on the verge of bankruptcy unless the two states help,” Sydbank’s head of stock analysis, aviation expert Jacob Pedersen, told TV2.
“The company has stopped making money since the planes have been parked on the ground and a profit has been gone. Without this help, SAS no longer exists. It is a company in a life crisis.”
Denmark has some conditions
The Swedish government has already proposed to the country’s parliament to support SAS with the equivalent of 3.5 billion Danish kroner.
In Denmark, the Ministry of Finance has announced that all the parties in Parliament have agreed to provide SAS with the needed money.
However, the Danish government has also imposed some conditions. According to TV2, the parties have thus decided that the state’s investments in the airline must be compensated with a fair share in the company’s ownership structure.
Yet, in the long term, the government’s interest will be brought back as soon as the right market conditions are in place again.
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