The European Commission has approved Denmark and Sweden’s plans to grant Scandinavian Airlines System AB (‘SAS’) restructuring aid for up to €1.3 billion (SEK 15 billion).

The plan sets out a package of measures for streamlining SAS’ fleet, optimising its network, reducing costs, financial burdens and increasing revenues. This strategy, which is supported with new aid from Sweden and Denmark through various instruments and different amounts, is necessary to make SAS viable again, argue the governments of both countries.

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The ability for governments to directly fund private enterprise in the EU is restricted under state aid rules. However, the Commission found that the funding wasn’t in breech and that the plan can go ahead.

Margrethe Vestager, Executive Vice-President in charge of competition policy said: “The restructuring aid to SAS approved today will contribute to ensure air connectivity to and from Scandinavia to the benefit of European citizens. Our assessment showed that SAS’ restructuring plan will ensure its viability in the long term. To limit any possible distortions triggered by the public support, SAS will reduce its presence on the overall air transport activities through, among others, a reduced fleet, limited ground handling and maintenance business as well as the release of several slots”.