Airline SAS said today it would launch a new transformation programme and look to raise new capital after reporting a wider loss first-quarter loss than a year earlier.
The airline, which is part-owned by the governments of Sweden and Denmark, reported a loss before tax of 2.60 billion Swedish crowns ($275m) for the November-January quarter after posting a loss of 1.92 billion a year earlier.
"The last two years have been the most challenging in the history of the aviation industry," CEO Anko van der Werff said.
"Travel patterns and market conditions are changing and will have an additional impact on the company. SAS is now, more than ever, in need of a new start," the CEO added.
The group has been struggling for years in the face of increasing low-cost competition, and which like other airlines has been hard-hit by a collapse in air travel.
It said today it would fully transform its business, including its network, fleet, labour agreements and other cost structures, aiming to save 7.5 billion crowns a year.
The airline said in a statement the "plan paves the way for undertaking a complete revitalisation of SAS' balance sheet and to substantially strengthen SAS' liquidity position".
"The success of the plan and the ability to attract potential new capital relies on SAS fully achieving the SEK 7.5 billion annual cost take-out plan which in turn depends upon SAS stakeholders’ full participation," it added.
The airline, which in 2020 secured a 3 billion crown rescue deal with the Swedish and Danish governments to keep afloat, did not specify how much capital it hoped to raise this time.
"Investors will be most focused on the capital increase, which again will dilute the shareholders and on which no figures and details have been given," said Nordnet analyst Per Hansen.
Last week, SAS shares plummeted after Norwegian bank DNB said in a note to clients the airline was "edging closer to bankruptcy", with other analysts saying SAS may need to raise more cash.
Sweden and Denmark each own around 22% of SAS.