Sun. Jul 14th, 2024

Brussels, 9 July 2024

The European Commission has approved, under EU State aid rules, an amendment of the commitments submitted by Denmark and Sweden in the Commission decision of 29 November 2023 (SA.58342 and SA.57543) for Scandinavian Airlines System AB (‘SAS’) recapitalisation.

On 29 November 2023, the Commission approved a recapitalisation of SAS amounting to approximately €833 million (SEK 9.5 billion) granted in October 2020. The Commission found that the recapitalisation aid by Denmark and Sweden was in line with Article 107(3)(b) of the TFEU and the conditions set out in the COVID Temporary Framework.

Despite the previous support, SAS did not manage to turn operations around and had to file for collective insolvency proceedings in the second half of 2022. On 28 June 2024, the Commission approved Denmark and Sweden’s plans to grant SAS restructuring aid for up to €1.3 billion (SEK 15 billion). The Commission found that the restructuring aid was in line with Article 107(3)(c) TFEU after having assessed the aid under its Guidelines for rescuing and restructuring non-financial undertakings in difficulties. The restructuring of SAS includes the cancellation of the common shares and the write-off of the hybrid notes that were granted as recapitalisation aid.

Due to the recapitalisation instruments ceasing to exist, Denmark and Sweden have notified to the Commission their requests to lift the commitments concerning governance and measures for prevention of undue distortions of competition.

The Commission has assessed the amended measure under EU State aid rules, in particular under Article 107(3)(b) TFEU. The Commission found that the amendment to the commitments does not alter the previous assessment of compatibility, given that: (i) the recapitalisation instruments cease to exist; and (ii) the commitments are replaced by more stringent measures to limit distortions of competition in context of the restructuring aid Decision. On this basis, the Commission concluded that the measure is compatible with EU State aid rules.

The Commission has also concluded that, after the States have implemented a step-up mechanism, no further implementation of the mechanism will be necessary in the future since the underlying recapitalisation instruments are ceasing to exist due to the restructuring.

The non-confidential version of today’s decision will be made available under the case number SA. 114648 and SA.114657 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.

Forward to your friends