New SAS credit facility was within state-aid rules

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SAS Group carrier Scandinavian Airlines did not receive state aid as a result of the credit facility granted by the airline's three government owners, European regulators have ruled.

The airline had depended on the Danish, Norwegian and Swedish governments to participate in a new credit facility as part of a sweeping restructuring effort at the end of 2012.

European Commission regulators investigated the states' involvement to see whether their investment breached state aid rules.

But the Commission has concluded that the governments invested "on market terms" when they agreed to fund half of the SKr3.5 billion facility, the remainder to be covered by banks and other finance sources.

Although the governments and the banks were "not in a comparable position" when deciding to participate in the credit facility, says the Commission, the state-aid inquiry has "established the robustness" of SAS Group's underlying assumptions in its business plan.

"The plan has been reviewed by external advisers who confirmed its credibility," it adds. "The plan is therefore an economically reasonable basis for the three states' decision to participate in the new [facility].

"Moreover, the risks taken by the states were further reduced as the collateral of the new [facility] was sufficient."

SAS Group gained "no undue economic advantage" from the governments' intended participation, it says, because the three states acted on the same terms as a private investor. The new facility was ultimately unused.