SAS files for Chapter 11 protection in the U.S.
SAS AB has filed for Chapter 11 protection in the United States as part of its SAS FORWARD transformation plan. Operations will continue as normal, though a pilot strike impacts liquidity.
Scandinavian airline SAS AB has voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York. This legal process is intended to accelerate the implementation of key elements of the company's business transformation strategy, known as SAS FORWARD.
The airline stated that its operations and flight schedules remain unaffected by the filing, and SAS will continue to serve customers as usual. However, an ongoing pilot strike has impacted flight schedules and the company's liquidity, with potential for significant further impact if prolonged. SAS expects to meet its near-term business obligations.
SAS is in advanced discussions to secure up to $700 million in debtor-in-possession (DIP) financing to support its operations throughout the restructuring process. Chapter 11 is a well-established legal framework for restructuring businesses with international operations, utilized previously by several major airlines.
The company aims to reach agreements with key stakeholders, restructure its debt, reconfigure its fleet, and secure a significant capital injection through this process. SAS anticipates completing the court-supervised proceedings within 9 to 12 months. Chairman Carsten Dilling noted that the current strike presents considerable challenges to the transformation plan's success, necessitating legal tools to advance negotiations.