SAS Scandinavian Airlines (SK, Copenhagen Kastrup) can expect further state aid from Denmark as long as private investors also chip in, Finance Minister Nicolai Wammen said on June 10. Copenhagen would write off debt the loss-making carrier owes and infuse extra capital, he elaborated.

The Social Democrats currently in government have secured the support of five other parties “to support and contribute to SAS’s transformation plan, SAS Forward, as well as the state’s ownership of SAS in the future,” he said.

The airline “is in a very serious situation. With the agreement today, there is consensus that the state is willing to assume its share of the responsibility for restoring SAS, and that the state still wants to be a responsible and long-term co-owner of SAS for the benefit of Denmark’s international accessibility, Danish exports and business, as well as Danish workplaces,” he added.

The political parties agreed “to accept a write-down and conversion of existing financial items in SAS on market terms and, together with other investors, to invest new equity in order to maintain a significant state minority shareholding, provided that all stakeholders contribute adequately,” the Ministry of Finance outlined in a statement.

It cautioned that the Danish state’s intended contribution to the flag carrier is subject to the European Commission’s approval of state aid. Denmark currently owns 21.8% of SAS.

“We agree on the Danish side to forgive debt - but also to ensure a significant Danish ownership share of SAS of between 22% and 30% in order to safeguard Danish interests in the best possible way,” Wammen told reporters after meeting with members of parliament on June 10. “There is a commitment from a large and broad majority in parliament that we continue to take responsibility and we want to contribute to a solution, but now all other parties must do their share as well.”

His comments came less than a week after the Swedish government, which holds a similarly sized stake, took a tougher stance and said it would propose to the country’s parliament that SAS be allowed to convert debt it owes to the state into equity but that it would not inject any new capital into the struggling carrier.

Troels Lund Poulsen, spokesman for Denmark’s Liberal Party, told local media that he was satisfied with the agreement with Wammen and the Social Democrats, commenting: “It is not an easy matter, nor has it been for the Liberal Party. But we think it is important that SAS gets through this difficult situation. We hope that with the help of private investors we can succeed.”

However, Rasmus Jarlov of the Conservative Party cautioned: “If SAS does not succeed in convincing the markets that they have a viable and profitable future, then no money will come from either the market or from the Danish state.”