Struggling airline SAS wins $300 million support from Denmark, Sweden

FILE PHOTO: Scandinavian Airlines (SAS) Airbus A320 planes are parked at Copenhagen airport in Kastrup, Denmark, March 15, 2020. TT News Agency/Johan Nilsson via REUTERS/File Photo

COPENHAGEN (Reuters) - The Danish and Swedish governments said on Tuesday they had decided to provide guarantees to struggling airline SAS SAS.ST totalling 3 billion Swedish crowns ($302 million).

The carrier has grounded most of its fleet and announced temporary layoffs of 90% of its staff amid the coronavirus outbreak that has brought global aviation to a near standstill

“This is a first step and the Danish state will as a long-term and responsible co-owner of SAS closely monitor developments and do whatever is necessary for SAS to get through the crisis and be operational after,” Denmark’s Finance Minister Nicolai Wammen said in a statement.

The credit guarantee was given to facilitate SAS’ ability to borrow money despite its fragile situation. The Swedish and Danish states hold 14.82% and 14.24% stakes in SAS respectively.

In a separate statement, the Swedish government proposed that airlines in 2020 would be given the opportunity to obtain credit guarantees worth a maximum of 5 billion crowns (417.6 million pounds) of which 1.5 billion would be directed to SAS.

“The purpose of the current proposal is to fundamentally protect viable Swedish airlines from being eliminated as a result of the current situation,” Sweden’s finance ministry said.

Reporting by Stine Jacobsen in Copenhagen and Anna Ringstrom in Stockholm, editing by Terje Solsvik/Keith Weir