SAS moves forward in Chapter 11 process and receives authorisation to continue its business

Agustín Miguens

SAS Scandinavian Airlines received approval from the Bankruptcy Court for the Southern District of New York on all of its «First Day» motions as part of the voluntary process of filing for bankruptcy protection through Chapter 11 of the United States Bankruptcy Act.

The approvals confirm that the airline is authorised to continue operating its business in the ordinary course during the course of the proceedings.

The court authorised the company to pay all wages and benefits to its staff. It also enabled the normal operation and continuation of existing frequent flyer programmes, including EuroBonus, which SAS maintains with Norwegian airline Widerøe.

In addition, it ordered the airline to fulfil obligations to travel agents, vendors and suppliers that had been established prior to the airline’s application. The court authorised payment for all goods and services received as of July 5th. Finally, it allowed payment of all taxes, insurance and regulatory fees as well.

«These court approvals confirm that our operations will continue as usual as we begin our restructuring process» said Anko van der Werff, CEO of the company. «Ultimately, our plan is about improving our financial position and continuing our more than 75-year legacy as Scandinavia’s leading airline», he added.

So far, flight schedules have not been affected by the company’s request. The reservation system, customer service, frequent flyer programmes and other services remained operational. However, the pilots’ strike that began on July 4th did affect the operations.

According to the company, the union protest will cost between 10 and 13 million dollars per day. The move hastened the decision to file for Chapter 11 bankruptcy protection in order to gain time to restructure its business.

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