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Struggling Scandinavian carrier SAS gets $700m loan

Ailing Scandinavian airline SAS, which filed for bankruptcy protection in the United States in early July, said Sunday it had secured a 700-million-dollar loan.

Published: 14 August 2022 15:56 CEST

An SAS airplane prepares to land at Longyearbyen airport

An SAS airplane prepares to land at Longyearbyen airport on Spitsbergen island in northern Norway. Jonathan NACKSTRAND / AFP

The move follows a crippling 15-day pilot strike, also in July, that cost the carrier between $9 and $12 million a day.

The pilots were protesting against salary cuts demanded by management as part of a restructuring plan aimed at ensuring the survival of the company.

READ ALSO: SAS strike affected 380,000 passengers in July

SAS said it has entered “into a debtor-in-possession (DIP) financing credit agreement for $700 million with funds managed by Apollo Global Management”.

SAS had filed for Chapter 11 bankruptcy protection in the United States and said the “DIP financing, along with cash generated from the company’s ongoing operations, enables SAS to continue meeting its obligations throughout the chapter 11 process”.

“With this financing, we will have a strong financial position to continue supporting our ongoing operations throughout our voluntary restructuring process in the US,” SAS board chairman Carsten Dilling said.

SAS management announced in February the savings plan to cut costs by 7.5 billion Swedish kronor ($700 million), dubbed “SAS Forward”, which was supplemented in June by a plan to increase capital by nearly one billion euros ($1.04 billion).

Denmark and Sweden are the biggest shareholders with 21.8 percent each.

“We can now focus entirely on accelerating the implementation our SAS FORWARD plan, and to continue our more than 75-year legacy of being the leading airline in Scandinavia.”

SAS employs around 7,000 people, mainly in Denmark, Norway and Sweden. It has suffered a string of losses since the start of the coronavirus pandemic in early 2020.

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Reader question: What will EES mean for foreigners living in Europe?

Currently scheduled to start in autumn 2024 (unless it’s delayed again, which is not unlikely) the EU’s new Entry & Exit System is basically an enhanced passport check at external EU borders, including a facial scan and fingerprinting.

You can find a full explanation of the new system HERE.

Travellers crossing an external EU or Schengen border for the first time will be required to complete EES ‘pre-registration’ formalities including that facial scan and fingerprinting.

There are, however, several groups exempt from EES and one of them is non-EU nationals who have a residency permit or long-stay visa for an EU country.

So if you’re a foreigner living in the EU or Schengen zone, here’s what you need to know.

Exempt

One of the stated aims of EES is to tighten up enforcement of over-staying – IE, people who stay longer than 90 days in every 180 without a visa, or those who overstay the limits of their visa.

Obviously these limits do not apply to non-EU nationals who are resident in the EU or Schengen zone, which is why this group is exempt from EES checks. They will instead be required to show their passport and residency permit/visa when crossing a border, just as they do now.

In its explanations of how EES will work, the European Commission is clear – exempt groups include non-EU residents of the Bloc.

A Commission spokesman told The Local: “Non-EU citizens residing in the EU are not in the scope of the EES and will not be subject to pre-enrollment of data in the EES via self-service systems. The use of automation remains under the responsibility of the Member States and its availability in border crossing points is not mandatory.

“When crossing the borders, holders of EU residence permits should be able to present to the border authorities their valid travel documents and residence permits.”

How this will work

How this will work on the ground, however, is a lot less clear.

Most ports/airports/terminals have two passport queues – EU and non-EU. It remains unclear whether the non-EU queue will have a separate section for those who are exempt from EES.

It does seem clear that exempt groups will not be able to use the automated passport scanners – since those cannot scan additional documents like residency permits – but should instead use manned passport booths. However it is not clear whether these will be available at all airports/ports/terminals or how non-EU residents of the EU will be directed to those services.

There’s also the issue that individual border guards are not always clear on the processes and rules for non-EU residents of the EU – even under the current system it’s relatively commonly for EU residents to have their passports incorrectly stamped or be given incorrect information about passport stamping by border guards.

Brits in particular will remember the immediate post-Brexit period when the processes as described by the EU and national authorities frequently did not match what was happening on the ground.

The Local will continue to try and get answers on these questions.

READ ALSO What will EES mean for dual nationals

What if I live in the EU but I don’t have a visa/residency permit?

For most non-EU citizens, having either a visa or a residency permit is obligatory in order to be legally resident.

However, there is one exception: UK citizens who were legally resident in the EU prior to the end of the Brexit transition period and who live in one of the “declaratory” countries where getting a post-Brexit residency card was optional, rather than compulsory. Declaratory countries include Germany and Italy.

Although it is legal for people in this situation to live in those countries without a residency permit, authorities already advise people to get one in order to avoid confusion/hassle/delays at the border. Although EES does not change any rules relating to residency or travel, it seems likely that it will be more hassle to travel without a residency card than it is now.

Our advice? Things are going to be chaotic enough, getting a residency permit seems likely to save you a considerable amount of hassle.

Delays

Although residents of the EU do not need to complete EES formalities, they will be affected if the new system causes long queues or delays at the border.

Several countries have expressed worries about this, with the UK-France border a particular cause for concern.

READ ALSO Travellers could face ’14 hours queues’ at UK-France border

Where does it apply?

EES is about external EU/Schengen borders, so does not apply if you are travelling within the Schengen zone – eg taking the train from France to Germany or flying from Spain to Sweden.

Ireland and Cyprus, despite being in the EU, are not in the Schengen zone so will not be using EES, they will continue to stamp passports manually.

Norway, Switzerland and Iceland – countries that are in the Schengen zone but not in the EU – will be using EES.

The full list of countries using EES is: Austria, Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and Switzerland.

Therefore a journey between any of the countries listed above will not be covered by EES.

However a journey in or out of any of those countries from a country not listed above will be covered by EES.

You can find our full Q&A on EES HERE.

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