In the first quarter of 2020, Norwegian had a pre-tax profit of minus NOK 3.3 billion ($340 million), whereas SAS had a fall of SEK 3.7 billion ($390 million) between February and April. This is $130 million and $260 million weaker than in corresponding periods last year.
“The next few months will be demanding for Norwegian and aviation in general, but our goal is to ensure that the company maintains a strong position in the airline industry also in the future”, Norwegian CEO Jacob Schram told national broadcaster NRK, pledging to offer “an even better service to our customers”.
While Norwegian temporarily solved the most acute problems through a dramatic debt restructuring by allowing leasing companies to effectively take over, SAS, which had already embarked on plans to axe 5,000 employees, is working to obtain new support packages from its largest owners, Denmark, Sweden and Norway as well as the Wallenbergs, a Swedish tycoon family.
“If we are to survive and create a long-term functioning business, we must not only gain access to loans, but also restore our balance sheet. We cannot do this without the support of our main owners,” SAS CEO Rickard Gustafson said, as quoted by Swedish national broadcaster SVT.
Previously, both the Swedish and Danish government had guaranteed emergency loans worth SEK 3.3 billion. According to the CEO, “intense and constructive” discussions about further support are ongoing.
According to Staffan Salén, the CEO of the company group Salénia, which is active in the airline industry, Denmark is most interested in saving SAS, due to Kastrup Airport being one of the company's largest employers with a stock market value “ten times higher” that that of SAS. For Sweden, by contrast, pumping more money into SAS is a “bad deal”, he ventured.
“Since 2009, SAS has taken in about SEK 15 billion ($1.5 billion) from its owners, while the market capitalisation today is just over SEK 4 billion ($400 million)”, Salén told SVT.
SAS's “strongly negative” result is even more alarming as it doesn't include May, the month when the coronavirus hit the hardest.
“This is very bad. It was not until mid-March that they grounded the jets and laid off their staff. So it's really only half this period that has been in this giant crisis and that will now continue,” SVT economics reporter Kristina Lagerström said.
Founded in 1993, low-cost Norwegian Air is Norway's largest airline and Europe's fourth-largest. Before the crisis, Norwegian ran some 160 aircraft to 150 destinations.
Scandinavian Airlines, most often referred to as SAS, is the flag carrier of Denmark, Norway and Sweden. The company is headquartered in Solna, Sweden and prior to the crisis operated some 180 aircraft to 90 destinations. Its main hubs are Copenhagen Kastrup, Stockholm Arlanda and Oslo Gardermoen.