SAS Scandinavian Airlines (SK, Copenhagen Kastrup) has received approval from the US Bankruptcy Court to continue operating as usual while in voluntary Chapter 11 bankruptcy protection, the airline announced.

Its parent, SAS Group, on July 5, filed for Chapter 11 restructuring in the United States as a part of its "SAS FORWARD" transformation plan shortly after its pilot unions confirmed their intention to go ahead with a strike.

SAS, in a statement, said all of its "First Day" motions as part of the Chapter 11 process had been approved.

The court specifically authorised SAS to, among other things, continue to:

  • Pay all employee wages and benefits;
  • Operate the airline in the ordinary course;
  • Honour existing customer programmes, including the EuroBonus loyalty programme;
  • Honour various pre-petition obligations owed to certain of its critical travel agency partners, vendors and suppliers;
  • Pay vendors and suppliers in full under regular terms for goods received and services provided on or after July 5, 2022; and
  • Pay all taxes, insurance, and other regulatory fees in the ordinary course.

Anko van der Werff, President and Chief Executive Officer of SAS, said: "These court approvals confirm that our operations will continue as usual as we begin our restructuring process in the US. We remain focused on providing the service our customers are used to while accelerating our efforts to implement key elements of our comprehensive business transformation plan, 'SAS FORWARD'. Ultimately, our plan is about improving our financial position and continuing our more than 75-year legacy as Scandinavia's leading airline."

The airline said its flight schedule was unaffected by the filing, and its reservations, customer service, SAS EuroBonus and all other customer services and systems would continue as normal.

However, separate from the Chapter 11 process, the strike by the SAS Scandinavia pilots' unions would continue to impact flight schedules, the carrier said. The airline estimated the protest by around 900 pilots would force it to cancel about 50% of its scheduled flights (excluding services operated by SAS Connect, SAS Link, and wet-lease providers), affecting some 30,000 passengers per day. The strike is about SAS hiring new pilots on cheaper agreements in the two new subsidiaries, SAS Link and SAS Connect, and in so doing, avoiding rehiring about 400 pilots laid off during the COVID-19 pandemic.