SAS Renegotiates Leases For 36 Aircraft From 10 Lessors

  • SAS A350

    SAS

    IATA/ICAO Code:
    SK/SAS

    Airline Type:
    Full Service Carrier

    Hub(s):
    Copenhagen Airport, Oslo Gardermoen Airport, Stockholm Arlanda Airport

    Year Founded:
    1946

    Alliance:
    Star Alliance

    Airline Group:
    SAS Group

    CEO:
    Anko van der Werff

Scandinavian flag carrier SAS has reached an agreement with some of its lessors to modify the terms and agreements for more than 30 aircraft. The airline is trying to get back on its feet, implementing cost cuts and filing for bankruptcy protection and this latest announcement is part of its larger restructuring plan.


Leases renegotiated

SAS announced on October 5th that it had reached agreements with 10 of its lessors to modify the terms and agreement for 36 aircraft, which includes three widebodies and 33 narrowbodies. The airline has stored some of its airplanes, and of the active ones, many are leased.

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The airline has renegotiated deals with lessors for 36 aircraft. Photo: SAS

The ten lessors that have agreed to tweak the agreements are AerCap Holdings N.V., Aergo Capital Limited, Aircastle Limited, ALAFCO Aviation Lease and Finance Company, Avolon Aerospace Leasing Limited, CDB Aviation, Dubai Aerospace Enterprise (DAE) Ltd., ICBC Aviation Leasing Co., Ltd., ORIX Aviation Systems Limited and SDH Wings International Leasing Limited.

Anko van der Werff, President and Chief Executive Officer of SAS, commented,

“… The amended lease agreements allow us to reconfigure our fleet and improve our cost structure, which is a key element of our SAS FORWARD plan. We are grateful to our lessors for working constructively with us, as we continue taking necessary actions to become a more competitive airline and a stronger business partner to them …”

Restructuring plan

Earlier this year, SAS announced that it had voluntarily filed for Chapter 11 in the US as part of its larger restructuring plan. Terming its transformation plan SAS FORWARD, the airline has divided it into two parts: a new business plan and a restructuring plan.

According to the airline, the new business plan involves leveraging the SAS brand, achieving unit cost competitiveness, rightsizing the fleet, and building a sustainable future.

SAS filed for bankruptcy in July. Photo: SAS

The restructuring plan, which the latest lease negotiations are part of, include reaching agreements with key stakeholders, restructuring the company’s aircraft and non-aircraft debt obligations, reconfiguring its aircraft fleet, and converting SEK 20 billion ($1.8 billion) of debt, hybrid securities, and certain other claims into equity.

Gradual recovery

The airline, like many around the world, was severely impacted by COVID lockdowns, then the Russia-Ukraine crisis, and everything that followed after the invasion. But it is hopeful of a gradual recovery.

SAS estimates that passenger numbers will recover to around 90% of pre-Covid levels by the end of the first half of the fiscal year 2023 and that short-haul leisure air travel demand will return to pre-Covid levels in 2024.

The airline expects a gradual recovery in the next couple of years. Photo: SAS

Last month, SAS also officially secured $700 million of funding approved by the US Bankruptcy Court for the Southern District of New York. The much-needed cash was necessary for it to continue operations as it seeks to return to profitability.

What do you feel about SAS’ restructuring plans? Please let us know in the comment section below.



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