SAS has agreed to amend the terms of leases for a further seven aircraft, representing further progress in its Chapter 11 restructuring plans.
The Scandinavian airline said it has reached agreements with two lessors, Carlye and SMBC, for seven narrowbody aircraft, as well as related equipment.
“We are happy to announce that we have reached amended lease agreements with two additional lessors,” commented Anko van der Werff, President and Chief Executive Officer of SAS, in a statement on November 1, 2022. “We are grateful to our lessors for working constructively with us in making important progress in our chapter 11 process.”
The news comes after SAS previously reached agreement with 10 lessors to amend leases for 36 aircraft, comprising three widebodies and 33 narrow body aircraft, on October 5, 2022.
SAS filed for Chapter 11 bankruptcy protection in July 2022, seeking a way to make progress with its restructuring plan and cost cuts. One of the reasons it cited was difficulties in renegotiating aircraft lease deals.
The carrier said in the latest statement that it would continue negotiations with other lessors to achieve further amendments to existing lease agreements.
What does SAS’ Chapter 11 process entail?
SAS voluntarily filed for Chapter 11 bankruptcy protection in the United States on July 5, 2022.
The company is seeking to restructure its debt, reconfigure its fleet and achieve a fresh injection of capital through the Chapter 11 process. It hopes to raise at least SEK9.5 billion ($862 million) in new equity, plus convert SEK20 billion ($1.8 billion) of debt to equity.
In addition, SAS also needs to reduce costs. The airline is therefore trying to reduce annual costs by SEK7.5 billion ($680 million) by the fiscal year 2026. Of those savings, between SEK850 million and SEK1 billion ($77 million-$91 million) is set to come from reduced aircraft lease costs.
The airline hopes to exit the process within 12 months of when it started in July 2022.