Bad deal for Sweden to save SAS

With Kastrup Airport as one of Denmark’s largest employers and a stock market value far higher than SAS, the Danish state has a great interest in saving SAS. But for Sweden it would not be a good deal, according to company manager Staffan Salen.

Today, SAS’s interim report showed a loss of SEK 3.7 billion in the first quarter. Like many others, the company has been granted state money in the form of sales support and layoff support. Like government loan guarantees from Sweden and Denmark of SEK 3 billion. But the question is whether it is enough for the company to survive?

Here in Sweden, the state owns 15% of SAS, and may have to decide whether to put even more money into the company for it to succeed. Jacob Wallenberg, as representative of the largest private owner, recently said in an interview with DI that the company is “socially critical” and that the state should go in for “it is absolutely crucial for the Swedish and Scandinavian export industry”.

Closed companies bring new ones in its place
However, Staffan Salen, CEO of the company group Salenia, which has a leg in the airline industry, believes that flight connections will always exist.

How Swiss came after Swissair is an example of the fact that there will always be air traffic to major cities. When a company closes a line, a couple of new companies often come into its place, he says in SVT’s Finance Agency.

“Denmark has the greatest interest”
So should the Swedish state save SAS or not?

You have to differentiate between giving general support and participating in a new share issue based on their ownership. However, there will be no further business. Since 2009, SAS has taken in about SEK 15 billion from the owners, while the market capitalization today is just over SEK 4 billion.

Who should take the lead in a rescue operation?

Those who should be most interested in putting money into SAS is the Danish state, in that Kastrup is one of Denmark’s largest employers with ten times higher market capitalization than SAS.