SAS wins approval to emerge from Chapter 11

A US bankruptcy court has approved a restructure of SAS to enable the carrier to exit Chapter 11 after two years.

The Scandinavian carrier confirmed a previous projection that it would emerge from the Chapter 11 bankruptcy protection process “around the end of the first half of 2024”.

The company initiated voluntary Chapter 11 proceedings to accelerate its SAS Forward reorganisation plan.

The airline filed for bankruptcy protection in July 2022 to enable the financial restructuring after warning that a strike by 1,000 pilots had put its future at risk.

The aim of the chapter process was to reach agreements with key stakeholders, restructure debt obligations, reconfigure its aircraft fleet, and emerge with a significant capital injection.

The Chapter 11 plan, which was approved by the US Bankruptcy Court for the Southern District of New York, is supported by more than 99% of the creditors that voted on the process.

However, the plan remains subject to various conditions, including approvals from various regulatory authorities and the completion of a Swedish company reorganisation. 

The process includes a $1.2 billion investment by a consortium including Air France-KLM, private equity firm Castlelake and the Danish government.  

SAS also reconfigured its fleet and reached amended lease deals with 15 lessors covering 59 aircraft to achieve cost savings. 

Chief executive Anko van der Werff said: “This is a major milestone for SAS in our transformation plan, SAS Forward. 

“The approved Chapter 11 plan is supported by more than 99% of our creditors that voted, and it sets a clear path to exiting the restructuring proceedings. 

“We look forward to emerging as a competitive and financially stronger airline with a stable equity structure. 

“We still have work to do but this marks a powerful step towards realising SAS’ potential to remain at the forefront of the airline industry for years to come.”

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