Airborne Disease Causing Airlines to Flee - A Case Study on SAS's Recapitalization Plan During the COVID-19 Pandemic

Abstract: This thesis investigates how SAS managed the liquidity crisis caused by the COVID-19 pandemic and what alternatives SAS, as a government-related entity, had in the financially distressed situation. The study contributes to the literature by providing a case study of how an extraordinary demand shock could be tackled from a company's perspective and how the decision process plays out from several stakeholders' perspectives. The study shows that SAS implemented a recapitalization plan by issuing securities with equity treatment and implemented debt for equity swaps to strengthen their balance sheet and raise liquidity. SAS was limited in its alternatives to the recapitalization plan due to regulations from the European Commission, the expected market interest, negotiations with stakeholders, and SAS's financial position.