On July 5, 2022, SAS AB (Scandinavian Airlines or SAS) the flag-carrying airline of Norway, Denmark and Sweden filed for bankruptcy in the U.S. courts under Chapter 11 as part of a business restructuring plan called SAS FORWARD. Three of the key elements of this plan were to immediately reduce annual operating costs by between SEK850 million and SEK1 billion, to raise SEK9.5 billion in new equity and to reduce or convert SEK20 billion of debt into common equity.
One of the areas targeted to help reduce annual running costs was aircraft lease agreements and the Scandinavian carrier has announced that it has now successfully renegotiated the lease terms for seven aircraft with lessors Carlyle and SMBC. The terms of the new leases will have to be approved by the U.S. Bankruptcy Court for the Southern District of New York.
On October 5 this year SAS confirmed that it had reached agreement with ten lessors for a total of 36 leased aircraft to amend the terms of existing aircraft leases and these agreements were approved by the court on October 14. In addition to making a significant contribution to the reduction of current annual running costs, these new lease agreements also constitute a major step forward in terms of SAS achieving its mid-term targeted annual cost savings of SEK7.5 billion by 2026 under the SAS FORWARD plan. SAS also intends to continue negotiations with additional lessors to achieve further amendments in existing lease agreements (1£ = 12,62 SEK at time of publication).