Scandinavian Airlines System (SAS) is one step close to leaving Star Alliance and joining SkyTeam after a US bankruptcy court blessed a $450 million loan as part of the beleaguered airlines’ restructuring package.
US Court Approves SAS Loan That Would Pave Way For Closer Relationship With Air France-KLM
A bankruptcy court in New York handed SAS a victory on Thursday after approving a $450 million loan from the investment group Castlelake, which together with Air France-KLM and the Danish government, is attempting to bring SAS out of bankruptcy.
The funds will be released next week and be used to pay down debt, part of the restructuring process necessary to navigate SAS out of bankruptcy protection.
The loan is essentially a downpayment on the $1.21 billion (13.2 billion Swedish crowns) restructuring plan that SAS struck with Castlelake and Air France-KLM that would see Air France-KLM take a 19.9% in the company and forge much closer commercial ties, including an alliance switch.
SAS must still gain approval from both the European Commission and a Swedish court before proceeding.
Selfishly I know, but I keep hoping that some court will put a stop to all of this so that SAS will remain in Star Alliance. I just flew SAS once again (details are coming) and I will certainly miss his carrier if it pivots from Star Alliance to SkyTeam.
At the same time, I see that SAS is in desperate need of a huge infusion of cash after being mismanaged for so long. With the Swedish and Norwegian governments out, the Danish government growing weary, and private options limited, it makes sense–from a survival perspective–that SAS would take this deal.
It’s now one step closer to reality.
image: Andy Prhat / SAS