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SAS

SAS signs deal to sell Estonia Air stake

Scandinavian airline SAS has signed a letter of intent to sell its stake in Estonian Air, the Estonian government confirmed on Monday.

Estonia’s Economy Minister Juhan Parts signed the preliminary accord with SAS executives in Tallinn, his ministry said in a statement.

“The parties confirmed plans to change the collective ownership structure of Estonian Air,” the statement said.

The details would remain confidential until the final shareholders’ agreement had been concluded, it added, without giving a date.

The Estonian government launched talks in January with SAS about Estonian Air’s future and last month said that it hoped to complete the takeover in June or July.

SAS currently holds a 49-percent stake in Estonian Air. The government owns 34 percent and the remaining 17 percent belongs to Estonian investment company Cresco.

The Baltic News Service said the government will contribute to a capital increase under which its stake will increase to 66 percent.

The government has said that if it acquired a majority holding in the carrier, it did not plan to remain the main owner in the long term and would seek a new strategic investor.

As recently as November 2008, SAS had said it was considering buying the Estonian government’s share, reportedly because of concerns about Estonian Air’s financial woes and the belief that it needed a capital injection which the government was then unwilling to provide.

Estonian Air has gradually recovered since then but SAS has been refocusing on its Nordic operations to stem its own financial problems, offloading subsidiaries such as Spain’s Spanair.

Estonian Air was created as a state-owned carrier in 1991, the year the Baltic nation of 1.3 million people won independence from the crumbling Soviet Union.

In 1996, the government decided to privatise it, launching a tender for a 66-percent stake which was won by Danish aviation company Maersk Air working with Cresco. Maersk Air sold its 49-percent share to SAS in 2003.

Estonian Air is a minnow in the airline market, with a fleet of six planes.

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SAS

SAS announces reduced loss and pins hopes on summer flights

Scandinavian airline SAS narrowed its losses in the second quarter, the company said Thursday, as it set its hopes on an easing of coronavirus restrictions this summer.

SAS announces reduced loss and pins hopes on summer flights
A SAS aircraft taking off in Paris. Photo: Charles Platiau/Reuters/Ritzau Scanpix

The earnings report came a day after the governments of Sweden and Denmark announced another round of aid to the ailing carrier.

From February to April, SAS booked a net loss of 2.43 billion Swedish kronor ($292 million, 240 million euros) — 30 percent smaller than in the second quarter last year.

The company also reported an improved operating profit “for the first time since the pandemic’s outbreak, both year-on-year and compared with the previous quarter,” pointing to its cost cutting efforts.

However, the number of passengers in the period declined by 140,000 compared to the first quarter, to 857,000.

This caused revenue to fall to 1.93 billion kronor, a 15 percent drop from the preceding quarter and 63 percent from a year earlier.

“The increase in vaccination rates provides some hope for the relaxation of restrictions, and an increase in demand ahead of the important summer season,” chief executive Karl Sandlund said in a statement.

However, the CEO also noted that “many customers are now increasingly choosing to book their tickets much closer to their travel dates, which makes it difficult to predict demand during the summer.”

SAS also said it expected claims from passengers of up to 150 million kronor after a European court ruled in March that customers should be compensated over disruptions due to a pilots’ strike in 2019.

After cutting 5,000 jobs last year — representing 40 percent of its workforce — SAS announced Wednesday an additional credit line of three billion kronor from the Danish and Swedish governments, its main shareholders, to get through the crisis.

The airline received a similar loan and a capital increase last year.

READ ALSO: Virus-stricken airline SAS secures new public loan from Denmark and Sweden

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