SCHIPHOL - A bankruptcy court in New York has approved a rescue plan for the financially struggling Scandinavian airline SAS, the airline announced. The plan involves Air France-KLM and investor Castlelake buying significant stakes in SAS. 

SAS filed for Chapter 11 bankruptcy protection procedure in the United States last year. The company has been struggling since the Covid-19 pandemic when travel restrictions resulted in significantly lower passenger numbers. Pilot strikes and competition from budget airlines pushed the financials further into the red. 

The rescue plan approved by the court on Wednesday involves 1.2 billion euros, with investments by Air France-KLM, Castlelake, and the Danish state. Air France-KLM bought a 19.9 percent equity stake in SAS and will take a controlling interest in the airline after two years. 

“The investment agreement approved by the court today is a key milestone in our SAS FORWARD plan,” said SAS CEO Anko van der Werff. “It shows that our new investors believe in SAS and our potential to remain at the forefront of the airline industry for years to come.” 

When the rescue plan was announced last month, Air France-KLM CEO Ben Smith said that he was pleased the French-Dutch consortium could help get SAS back on its feet while also strengthening its own position in the Scandinavian market.