Star Alliance member Scandinavian Airlines has been facing financial trouble for quite a while now. A pilot strike, leading to more than 20,000 flights being cancelled, seems to be the straw that broke the camel’s back.
As of today, July 5, the airline seeks bankruptcy protection under Chapter 11 in the United States of America. Other foreign airlines like Avianca and LATAM have used this particular option in American bankruptcy law before to maintain operations while restructuring their business. This is generally good news for passengers, as all tickets, miles and vouchers remain valid in the near future.
According to the airlines press release, entering insolvency and bankruptcy protection is intended to ease up the restructuring process. The company wants to reschedule their debts and also aims to overhaul its fleet. This will now happen under supervision from American insolvency courts.
What happens to Passengers?
The consequences of today’s press release for passengers are still uncertain. If everything turns out as planned, there will be no changes at all. Tickets remain valid as of now, and we are unaware of previous problems with cancellations under Chapter 11. SAS promises to continue to pay refunds and reimbursements. This is however pending on the insolvency court’s decision.
The airline will share more details during a press conference later this day. SAS expects the restructuring under Chapter 11 to take 9 to 12 months.
Source: SAS Press Release