Sweden's government is preparing to submit a parliamentary bill proposing SKr749 million ($111 million) in financial support for SAS Group after the struggling company secured union agreement for its restructuring plan.

The Swedish minister for financial markets, Peter Norman, says those involved in reaching the agreement have "shown great responsibility" towards SAS.

"I understand the difficult decisions and major sacrifices that the SAS employees had to make in light of the company's plight," he adds.

There is "broad support" in parliament for the bill, Norman says.

Sweden's contribution is in line with the state's 21.4% share in the company. The Norwegian and Danish governments, which each hold 14.3%, are similarly set to inject some SKr500 million apiece into SAS Group.

The capital is part of a new SKr3.5 billion credit facility for the company, the remainder of which will be sourced from the shareholders which account for the other 50% ownership of the company. These include seven banks and the KAW Foundation.

Norwegian trade and industry minister Trond Giske says the agreement "lays a good foundation" for SAS's future operation.

"Agreements with employees that facilitate increased productivity and lower unit costs are an important part of the plan," he adds.

SAS Group's restructuring will involve centralising administrative activities and disposing of regional carrier Wideroe, engine assets and ground-handling activities.

This will cut the workforce from 15,000 to 9,000 and shift the weight to Sweden, which currently accounts for 30% of personnel - behind Norway's 36% and Denmark's 34%. The change will push Sweden into the lead position with 38%, with the other states holding 31% each.

SAS Group will also effectively operate only a single airline, SAS-branded, following the sale of Wideroe, the divestment of stakes in other carriers, and the conversion of Finland's Blue1 which will essentially become a wet-lease operation for performing SAS services.

Source: Air Transport Intelligence news