SAS, the Scandinavian airline, said on Saturday that it has reached a deal with Apollo Global Management to raise $700 million in new funding to get it through bankruptcy.
The airline filed for bankruptcy in the United States in early July to help reduce debt after salary discussions between the airline and its pilots failed, resulting in a 15-day strike that added to traffic disruption across Europe.
SAS stated in a statement that it anticipates the Chapter 11 reorganization procedure to take nine to twelve months. The airline expects to receive court permission for a $700 million loan 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 stated that the strike has cost them more than $145 million, has impacted 380,000 customers during the busy summer travel season, and may imperil the company’s ability to receive more funding.
SAS suspended 3,700 flights during the strike, reporting last week that passenger numbers were down 32% in July compared to June, while capacity was down 23%.
While the Swedish government has denied the request for further financing, Denmark has stated that if SAS receives backing from private-sector investors, it may infuse additional capital.