SAS

Another Step Towards Privatization

Following the Swedish government's request for parliamentary authorization to cut its 21.4 percent stake in loss-making Scandinavian airline SAS, the governments of Denmark and Norway said on Friday that they would consider selling their 14.3 percent stakes at the right price.

News agency Reuters quotes the Danish finance minister and the Norwegian trade and industry minister on their intentions to eventually privatize the airline.

Hampered by high costs, SAS has been hit harder than many other carriers in the global financial crisis, and a sale to a big group such as Germany's Lufthansa or Air France KLM has been mooted by industry analysts.

On Thursday the Swedish government asked for a mandate from parliament to reduce the state's ownership in SAS at a suitable point in time. Minister of Enterprise Maud Olofsson said the Swedish state could reduce its stake in a variety of ways, including a takeover of SAS by an outside investor when the time was right. Olofsson added though that a sale was not imminent, but in the longer run the government saw no value in owning stakes in an airline.

Sweden, Denmark and Norway formed SAS in 1946 by combining their respective flag carriers into a group that could provide international services, and they remain its biggest shareholders. Last week, they said they would support a $US 684.9 million rights issue to bolster heavily loss-making SAS's balance sheet.

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