“In order to continue to implement important points of the plan, SAS and certain of its subsidiaries have voluntarily filed for Chapter 11 in the US, which is a legal financial restructuring process conducted under the supervision of a US federal court,” the statement said.
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According to its own estimation, SAS Airlines has sufficient liquidity to meet its business obligations in the near future. However, the pilots’ strike, which began on Monday, has a negative impact on liquidity and the financial situation, and in the event of an extension, the impact of the strike on the economy could be substantial.
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The company expects to complete the bankruptcy proceedings in nine to 12 months. During this time, it wants to conclude an agreement with the main stakeholders, restructure the debt, reconfigure the aircraft fleet and receive a capital injection.
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On Monday, pay negotiations between management and SAS pilots broke down. Pilots have therefore gone on strike, threatening the future of airlines and contributing to travel chaos across Europe as the peak summer holiday season begins.
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Loss-making airline SAS is trying to restructure its business through sweeping cost cuts, raising new cash and converting debt to equity. The Swedish and Danish governments have shares in the company. Copenhagen has previously said it is willing to provide SAS with another financial injection and write off debt on the condition that the airline also finds private investors. Sweden has rejected another financial injection, while Norway, which sold a stake in the airline in 2018 but still owns the company’s debt, said it may proceed with a debt-to-equity conversion.
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Sydbank analyst Jacob Pedersen estimated that the strike could cost SAS around 80 to 90 million Danish crowns (266 to 300 million CZK) per day. According to him, the company’s ticket sales for future flights will also suffer from the strike.
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