Cash-strapped Scandinavian Airlines System has announced plans to sell its stakes in subsidiaries Spanair and airBaltic in a bid to raise much-needed funds.
SAS said it would sell a majority holding in its wholly-owned company Spanair to a consortium of Spanish investors but did not specify the stake of the stake or the fee. It is also selling its 47.2 percent stake in airBaltic to the management of airBaltic for 20 million Euros.
It said in a statement: “The SAS Group has reached an initial agreement with a group of investors from Catalonia, lead by the Consorci de Turisme de Barcelona and Catalana d’Iniciatives, for their incorporation as new majority shareholders into SAS’ subsidiary Spanair S.A.”
SAS said it expected to sign a final agreement by the end of January.
The Scandinavian carrier plans to remain a core shareholder in Spanair and act as its industrial partner to implement Spanair’s ongoing restructuring programme.
SAS’s aviation interests include SAS Denmark, SAS Norway and SAS Sweden, low-cost carriers Blue 1 and Wideroe, which collectively carried 33.42 million passengers in 2007. It also owns 20 percent of Flybmi.
SAS has struggled for over a decade and came close to bankruptcy after the September 11, 2001 attacks on the United States, the war in Iraq and the outbreak of the SARS epidemic in 2003.
Last year the airline was badly hit by technical problems with its Dash-Q400 planes built by Bombardier which forced it to ground many of its aircraft.
Problems have continued this year, against the backdrop of rising fuel prices and the financial crisis. In mid-August, it announced a restructuring programme, including a 10 percent reduction of its fleet to some 300 aircraft and 2,500 job cuts.
Just days later, a Spanair plane crashed on August 20 at a Madrid airport, killing 154 people.
SAS started the airline 20 years ago and currently owns a 94% shareholding. Last year it put Spanair up for sale but was aborted after the airline reported high losses.
This year Iberia was eyeing up the Spanair for a possible takeover but pulled out of talks in May and entered discussions instead with British Airways.
SAS posted a record net loss of almost 200 million euros in the third quarter, compared to a profit of 70 million euros in the same period a year earlier.
On November 5, SAS management said it was still considering the possibility of a merger or takeover. And two weeks later, Lufthansa confirmed it was still interested in SAS.