A 3.3b crown credit will not be enough... Scandinavian SAS is going back to its state shareholders for more. Image Credit: Reuters

Stockholm: The Airline SAS is in talks with major shareholders to raise more money to help it ride out the pandemic-induced collapse in global air travel after reporting bigger losses in its second quarter.

Sweden and Denmark, part owners of SAS, have already stepped in to aid the airline, guaranteeing a 3.3 billion crown credit facility, but SAS Chief Executive Rickard Gustafson said more would be needed given the scope of the crisis.

"SAS is currently in active, intensive and constructive discussions with the company's major shareholders and selected stakeholders on a recapitalisation plan to ensure the future of SAS," Gustafson said. When asked for more details on the funding needs, Gustafson declined to give more information, but said it was clear the amount would be "significant".

Gustafson said the company aimed to present a plan to the market in June. SAS said losses before tax in the February-April quarter rose to 3.72 billion Swedish crowns ($387.4 million) from 1.22 billion a year earlier.

SAS last reported a profit in its August-October 2019 quarter.

Hit from all sides

The airline, facing tough competition from low-cost rivals, had already been restructuring and making cost savings before the coronavirus pandemic hit the airline industry. Earlier this week, SAS said it would resume flights to several destinations from June onwards.

"We expect that the recovery will start with increased domestic demand followed by European and then intercontinental destinations," SAS said. "But, it will most likely take until 2022 before we see demand in line with what we experienced before the COVID-19 outbreak."