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SAS AB Chief Executive Officer Anko van der Werff said he’s confident the Scandinavian airline will emerge successfully from a chapter 11 restructuring after winning clearance for a $700 million financing package and seeing a rebound in its own performance, Bloomberg News reported. Approval for the Apollo Global Management funding from a US bankruptcy judge is “the biggest and most important news” for SAS and will be “vital” as it seeks to move forward with a new strategic plan, Der Werff said Thursday in an interview in Gothenburg, Sweden. Operations have stabilized since the end of a pilot strike in August, the CEO said, and while the dispute cost “considerable money” and “disappointed a lot of people,” the first two weeks of September have produced a “far better” operational performance at the airline, with passengers rushing back. “Operationally we are stable,” he said, adding that the company’s forecasts still stand, with no sign so far that a cost-of-living squeeze will curb demand. “We are not going to put additional capacity in. But right now we are really content with how the winter is developing.” Stockholm-based SAS expects the chapter 11 process to continue until May or June, during which time the tri-national carrier will have sufficient liquidity, aided by the flow of cash from its own operations, according to the CEO.

Bankruptcy Judge Michael Wiles on Friday approved a $700 million financing package for SAS AB from Apollo Global Management, though he said features of the deal concern him, Bloomberg News reported. The financing, divided into two $350 million draws, will allow Apollo to convert the debt into stock in the bankrupt airline or participate in an equity raise tied to SAS’s eventual exit from chapter 11 protection under certain circumstances. Judge Wiles called the financing “unusual” and questioned whether it was legally viable. “I will approve the arrangement, although not without some significant reservations,” Judge Wiles said in a hearing held by telephone Friday. “To be honest, I still have some misgivings about the whole idea.” Judge Wiles said the structure is akin to SAS selling options on stock that does not yet exist, a concept he found legally murky. While questioning SAS advisers in court, he asked whether the deal might dissuade potential suitors for the airline from making proposals that would ultimately be better for the company’s creditors. Lawyers and bankers for SAS emphasized that the airline has the ability to terminate Apollo’s options by paying fees to the asset manager. They also argued that the deal is a substantially cheaper way to finance its operations than a standard loan arrangement and is allowed under bankruptcy rules.

U.S. officials screened 8.76 million air travelers over the four-day Labor Day weekend, marking the first time holiday weekend screening volume has exceeded 2019 pre-pandemic levels, Reuters reported. The U.S. Transportation Security Administration (TSA) said Tuesday the four-day period topped the 8.24 million passengers screened over the Labor Day weekend in 2019, which traditionally marks the end of the busy U.S. summer travel season. Overall, U.S. summer travel did not meet early expectations as U.S. airlines trimmed summer capacity by 16% and adjusted staffing models to account for the time it takes to hire and train new employees. On Thursday, the Transportation Department (USDOT) said the largest U.S. airlines had made "significant changes" to customer service plans with nearly all agreeing to offer passengers meals and overnight stays for delays within their control after a rough summer for travel, during which hundreds of thousands of flights were canceled or delayed.

LATAM Airlines yesterday turned back two challenges to its bankruptcy reorganization plan, putting the carrier a step closer to emerging from chapter 11 after seeking protection from creditors in the early months of the pandemic, Reuters reported. LATAM said in a statement it was pleased by a U.S. bankruptcy court's decision confirming its reorganization plan in which two groups of creditors lost their appeals. LATAM, which filed for bankruptcy in 2020, won court approval to exit chapter 11 in June. Its reorganization plan would inject about $8 billion into the airline through a combination of capital increase, issue of convertible bonds and new debt. The appeal against the approved plan came from the TLA Claimholder Group, which has shares in subsidary LATAM Airlines Brasil, and a group of unsecured claimants comprising Avenue Capital Management II, Corre Partners Management, CQS (US), HSBC Bank Plc, Invictus Global Management, Livello Capital Management LP and Pentwater Capital Management LP. The groups' appeals were opposed by other shareholder entities and the airline itself. The appeals had challenged LATAM's so-called backstop agreement with a creditor group that had agreed to guarantee certain financing if no one else steps up to provide it. Under the deal, the 15 backstop creditors would receive $734 million in fees to ensure that $5.4 billion in stock and debt offerings are fully financed.

The former Mexican airline Interjet has been formally accepted into a domestic bankruptcy process by a district judge. Interjet will now be able to negotiate up to 40 billion pesos in debt (nearly US$2 billion) with its creditors, SimpleFlying.com reported. On Tuesday, a Mexican judge approved the airline Interjet formally entering a bankruptcy process. Interjet ceased operations in December 2020, after a years-long crisis fueled by the COVID-19 pandemic. Before that, Interjet was the third-largest airline in Mexico, had a fleet composed of 88 aircraft, including 22 Sukhoi Superjet units, and operated under a hybrid business model with both low-cost and legacy-like services. The management of the ill-fated airline celebrated the judge's decision, saying it was great news for the company. The airline will now be able to restructure financially, eyeing a return to the skies in the future, said Carlos del Valle, deputy director of Interjet. The airline will employ the benefits available in the Mexican bankruptcy process to strengthen its financial position, protect and preserve its assets, and organize the company's liabilities, safeguarding the creditors and employees, said Interjet in a statement. Former Interjet employees launched a strike in January 2021 and seized most of the company's assets across the country, including its airport counters at Mexico City Benito Juárez International (MEX).

SAS AB, which is working its way through a chapter 11 restructuring in the U.S., warned that much more needs to be done to persuade stakeholders to invest in the ailing Scandinavian airline, Bloomberg News reported. The airline is also having to overcome the effects of a pilots’ strike and travel disruptions that have hampered its important summer season, just as the price of kerosene has skyrocketed and inflation is accelerating. “Cost cutting across all SAS remains a focus to ensure our cost competitiveness,” the Stockholm-based airline said in a statement on Friday as it announced third-quarter results. It has identified “the vast majority” of the 7.5 billion kroner ($707 million) in annual spending it needs to cut. It reported total operating expenses of 24.4 billion kroner for the nine months to July, up 10.8 billion kronor after adjusting for currency effects. The tri-national airline made significant progress on both its staffing crisis and financial restructuring plans over the summer. Earlier this month, Apollo Global Management Inc. agreed to provide the company with a loan known as Treasury Financing of approximately $700 million to help it through its chapter 11 bankruptcy proceedings. In addition to the loan deal with Apollo, SAS is nearing the results in talks to renegotiate contracts to reduce leasing costs and “right size” the fleet, CEO Anko van der Werff said in an interview. “We are making progress on our ongoing talks,” he said. “I think they’ll last a few more months.” In August, the company’s pilots also agreed to a collective bargaining agreement the airline and unions struck last month to end a 15-day strike. The July strike hit SAS at its busiest time of the year, when it was forced to cancel 3,700 flights, affecting 380,000 passengers and costing $135 million.

Regional air carrier ExpressJet Airlines LLC filed for bankruptcy Tuesday and will shut down its business, unable to rebound from the loss of its contract with United Airlines, WSJ Pro Bankruptcy reported. The College Park, Ga.-based regional air carrier ceased operations on Monday in advance of its chapter 11 filing and is now planning to sell off its remaining assets, according to a declaration filed with the U.S. Bankruptcy Court in Wilmington, Del., by ExpressJet’s President, John Greenlee. ExpressJet provided regional flight services for other airlines using aircraft subleased from United Airlines. In January 2019, the company signed a contract with United to fly exclusively for United through 2022. But in 2020, when the COVID-19 pandemic grounded many flights, United scrapped the contract, and ExpressJet was forced to suspend its operations. In an attempt to rebound, ExpressJet launched its own leisure brand, Aha, in the fall of 2021 to connect Reno-Tahoe International Airport and cities along the West Coast, but the company was unable to turn it into a profitable business. In the first seven months of 2022, the company’s estimated gross revenue was $5.5 million, while expenses were $23.3 million, generating an operating loss of $17.7 million.

Scandinavian airline SAS said on Saturday it entered into an agreement with Apollo Global Management to raise $700 million of fresh financing it needs to see it through bankruptcy, Reuters reported. The airline filed for bankruptcy protection in the United States in early July to help cut debt after the collapse of wage talks between the airline and its pilots, triggering a 15-day strike that added to travel chaos across Europe. SAS said in a statement it expects to complete the chapter 11 restructuring process in nine to 12 months. The airline anticipates receiving court approval for its $700 million financing by the end of September. SAS chief executive Anko van der Werff has said the strike accelerated its decision to file for chapter 11 status. The airline has said the industrial action had cost it more than $145 million, affecting 380,000 passengers in the peak summer travel season, and might jeopardize the firm's ability to secure additional financing. SAS grounded some 3,700 flights during the strike, saying last week its number of passengers fell 32% in July from June and capacity by 23%. Swedish, Danish and Norwegian pilot union members, who voted to adopt a collective bargaining agreement reached with SAS last month, say they will not resume their strike. SAS, which was already loss-making before the pandemic due to rising competition from low-cost carriers, had said it needed to slash costs further and raise more capital to survive. While the Swedish government has rejected the plea for more cash, Denmark says it might inject fresh funds if SAS also finds support from private-sector investors.