Sweden unveiled a plan on June 15 to recapitalise SAS Scandinavian Airlines (SK, Copenhagen Kastrup), with Denmark also set to contribute, the airline announced in a statement.

Sweden’s industry minister, Ibrahim Baylan, said the government would inject up to SEK5 billion kronor (USD535 million) in the struggling carrier if given the go-ahead by the country’s parliament. The support is conditional on SAS setting more stringent emissions targets.

“Let me be clear, Sweden will only go in with capital to SAS if clear, quantitative targets for reduced emissions are set in line with the Paris Agreement’s 1.5-degree goal,” Per Bolund, Sweden’s financial markets minister, said at a press conference, according to Reuters.

The Danish government also “communicated political unity” for the recapitalisation but did not provide a figure, the airline said. The government said the amount “must be matched by a fair share of ownership.”

“SAS is central to both Scandinavia and Denmark’s accessibility, Danish exports and business, and Danish workplaces. As a long-term and responsible co-owner, we are prepared to contribute to a long-term solution for the company, which will ensure that SAS will also be operational on the other side of the Covid-19 crisis,” said Nicolai Wammen, Denmark’s finance minister, the Danish news site Finans reported.

SAS foresees funding needs of around SEK12.5 billion (USD1.34 billion) and promised to provide more details about the rescue along with related measures by the end of June.

“The aim of the recapitalisation plan is to ensure that SAS is fully funded and that shareholders’ equity will be at levels experienced before Covid-19 pandemic when business volumes return to pre-corona levels,” the statement said.

The two countries, the carrier’s biggest shareholders, have already agreed to provide a 90% guarantee for a revolving credit facility of SEK3.3 billion (USD353 million).

In mid-March, the airline furloughed 90% of its workforce, and in late April it said it would lay off 5,000 staff - about 40% of its workforce.

On June 12, SAS sent a letter to Denmark’s Cabin Attendants Union (CAU) detailing plans to terminate 600 of around 1,200 cabin crew at SAS Denmark by the end of the month, the country’s TV2 reported. The layoffs are part of the 5,000 redundancies, which include a total of 1,700 in Denmark.

“We will now, in cooperation with SAS, try to reduce the number of employees to be laid off,” CAU chairman Christa Ceré told TV2. “It may be that some want to go on reduced hours, voluntary leave, or possibly take a voluntary termination.”

In Norway, SAS plans to cut 350 full-time job equivalents, the business daily Dagens Næringsliv reported on June 9. The company has asked cabin crew to either quit immediately, in return for some travel privileges and a chance to be rehired later, or hang on for the duration of their notice of termination and then cut all ties to the airline.

“It was a bloody day,” Nina Pedersen, head of the cabin crew union Norsk Kabinforening (NKF), told the newspaper.