Norwegian officials have joined discussions on a recapitalization of Scandinavian Airlines (SAS), after the airline reported a need this week for the equivalent of SEK 12.5 billion (USD 1.3 billion) to survive the Corona crisis. Sweden and Denmark were already discussing a bailout for the airline that once was owned by all three Scandinavian countries.
Norway sold off its last shares in SAS in 2018, when the Conservatives-led government finished a process that began during earlier governments, including the left-center coalition that ruled from 2008 to 2013. Newspaper Dagens Næringsliv (DN) reported Tuesday that now both the current government and the Labour-led opposition parties in Parliament are “positive” to a reinvestment that would keep SAS airborne after months of Corona-induced groundings and layoffs.
DN reported the talks involved both a “considerable” injection of fresh capital and other forms of financing. The Norwegian government has helped bail out Norwegian Air by guaranteeing loans, and has been called upon to help SAS, too. The airline is keen to spread its wings, and anounced on Tuesday that it intends to soon have 40 of its grounded aircraft back in service with routes not only within Norway but also from Oslo, for example, to Athens, Split, several destinations in Spain and Denmark, Nice, Reykjavik and London.
Trond Viken, spokesman for Norway’s business and trade ministry, wouldn’t comment on whether Norway would offer fresh capital for SAS. “The Norwegian state has contributed, through new furlough regulations and by putting up a loan guarantee plan for the airline industry,” Viken told DN. “At the same time, the state must make sure that the risk of losses isn’t too high.”
‘Political conversations’ confirmed
Viken noted that the state has also bought routes from the airlines, which has resulted in SAS, Norwegian and Widerøe being able to keep offering domestic flights in a long, mountainous country where airline service is a critical part of transportation infrastructure.
Sweden and Denmark still own 29 percent of SAS and thus have been involved in recapitalization plans for SAS after it was all but shut down when borders closed and travel restrictions grounded aicraft. After losing most all its revenues, SAS like other airlines has been hit hard by the Corona crisis.
Sverre Myrli, a Member of Parliament for the Labour Party who sits on the transport committee, confirmed that “political conversations” were going on among Sweden, Denmark and Norway about a shared plan and fresh capital from all three countries.
“When SAS is in a situation like now, we shouldn’t rule that out,” Myrli said. “We’re aware of what Denmark and Sweden are doing and it’s interesting.”
Myrli noted that SAS “has a special history since its founding 75 years ago, and is important for Norwegian infrastructure and Norway.” He said the government and Parliament hadn’t arrived at any capitalization plans of their own “but it’s absolutely interesting to evaluate.”
MP Arne Nævra of the Socialist Left party (SV), who also sits on the Parliament’s transport committee, thinks Norway should return as an owner of SAS. “SV wants to secure sustainable airline service in Norway,” Nævra told DN, “but we don’t want to be part of passive billion-kroner support to companies unless society is secured ownership or national interests are addressed.”
Nævra noted that SAS has “historically been in public hands,” and that state ownership “would both secure the company in the acute crisis it’s in, and be part of a long-term strategy for a climate-friendly restructuring of aviation.”
SAS officials wouldn’t comment on Norwegian participation specifically, but wrote in a press release that SAS was continuing its work to secure more involvement from Norwegian authorities.