SAS Scandinavian Airlines (SK, Copenhagen Kastrup) is negotiating with shareholders to raise more money, CEO Rickard Gustafson said on May 28 after the company posted ballooning quarterly pre-tax losses.

“With the ongoing crisis, SAS will once again need to demonstrate its ability to transform to a new and very challenging reality,” Gustafson said in the interim report for the February-April quarter, during which losses rose to SEK3.72 billion kronor (USD393 million) from SEK1.22 billion (USD129 million) a year earlier.

Sweden and Denmark, part owners of SAS, have already provided 90% guarantees for a SEK3.3 billion (USD349 million) revolving credit facility, but more will be needed, he explained.

“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.

The airline is also continuing its efforts to secure support from the Norwegian government, which has so far opted instead to back SAS rival Norwegian (Oslo Gardermoen) and other local carriers.

When asked for more details on the funding needs during a conference call, the chief executive declined to do so but said it was clear the amount would be “significant”, Reuters reported. The company aims to present a plan to the market in June.

On May 27, SAS said it would resume flights to several destinations from June onwards. This primarily includes domestic flights within and between the Scandinavian countries, but flights to New York Newark, Chicago O'Hare, and Amsterdam Schiphol from Copenhagen Kastrup are also set to resume.

In Sweden, it is adding four destinations from Stockholm Arlanda, namely, Angelholm/Helsingborg, Kalmar, Malmö, and Skellefteå. It is also resuming flights from Stockholm to Helsinki Vantaa and Turku in Finland.

In Norway, where SAS is already serving all domestic destinations, it will now be possible to fly from Bergen and Stavanger to Copenhagen and from Stavanger to Aberdeen Dyce.

Meanwhile, SAS is pursuing a revised business plan to generate SEK4 billion (USD423 million) in further cuts to costs by 2022, it said in the interim report. The savings will come in the form of a reduction of the workforce by up to 5,000 jobs. At the same time “productivity improvements in the range of 15-25% are required in all collective bargaining agreements to cater for changing market conditions and seasonality” will be required.

The company also pointed to strict cost control procedures imposed during the crisis, including renegotiated contracts with suppliers and reduced spending on marketing, product, IT development, and other projects.

“Additionally, we plan to adapt the fleet size, through postponements and adjusted future deliveries of aircraft from Airbus and lessors until demand returns,” it said.