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SAS Cabin crew reach agreement with management and the future of the company looks good

Monday, 19 November 2012
The union representing the cabin crew for the trouble airliner, SAS have agreed with SAS and the company looks happy to continue operation and the talks of bankruptcy waved to the background.
"This is a great day for SAS," CEO Richard Gustafson told the Norwegian business daily Dagens Naeringsliv after the airline agreed to the terms with all the unions.

"Now we've really created a strong foundation to stand on. We can now go ahead with the plan to secure our future," says Gustafson .

He praised the efforts of unions to come up with a solution to the crisis-ridden company.
"We have had discussions with all of our eight unions that have been rewarding. There have been major sacrifices and they have shown great responsibility," says Gustafson.

Although the agreement with the Danish cabin crew rescued SAS from bankruptcy here and now, it tmakes it painful for the employees.

"I've given blood. I have made something of a work, which I am very reluctant to have done. We have many single mothers, and it'll get really hard in the future, and I feel really bad," says Helge Thuesen, who is chairman of cabin crew union CAU.

The Danish cabin crew union, CAU was, the last employee group to finally reached an agreement with SAS. Thus, all eight unions agreed to SAS management terms.

"Now we are looking forward, to do what we do best - namely to serve our customers. But the agreement hurts," says Helge Thuesen.

But negotiations, which would have been completed 15 hours before they did, has left its mark on employees.

"There are some breach of trust between employees and management, and now we must all make an effort to restore confidence," says Helge Thuesen.

The Board has decided that the conditions for the implementation of 4 Excellence NG plan exist

- 8 of 8 new union agreements have been signed November 19 - The Danish Pilot Union Agreement is conditional upon approval by one third of its members.

4Excellence NG is targeting approximately 3 bn SEK of annual improvement from cost reductions and organizational restructuring and approximately 3 bn SEK increased liquidity from asset sales

~ New 3.5 bn SEK Revolving Credit Facility from Banks and Core Shareholders to secure financial preparedness conditional on final parliamentary approvals and approval of the Danish Pilot Union Agreement from one third of the members of the Danish Pilot Union
On November 12 the Board of SAS approved the 4 Excellence Next Generation (4XNG) plan to address

the issues facing SAS. The 4XNG plan will improve EBT by approximately 3 bn SEK on an annualized basis and improve the overall cost flexibility through:

• New union agreements for personnel

• Centralization of administration functions

• Reduction of compensation to market levels

• New pension terms

• Outsourcing of Call Centers and Ground Handling

SAS also communicated that it has reached a conditional agreement to increase its existing 3.1 bn SEK revolving credit facility to 3.5 bn SEK and extend the term of the facility to 31 March 2015.

This new revolving credit facility is being provided by seven current lenders and SAS' core shareholders (The Kingdom of Denmark, the Swedish State, the Kingdom of Norway and KAW) on equal terms. The availability of this new revolving credit facility is subject to final documentation, parliamentary approval where required, and it is conditional on signed union agreements that are a central and integral part of the 4XNG plan.

The condition to have 8 union agreements signed have been fulfilled on November 19, 2012, subject to a ballot approval by one third of the members of the Danish Pilot Union to be finalized in the next few days. The availability of the new revolving credit facility is still subject to parliamentary approvals (where required).

SAS Group Investor Relations

SAS is publishing this information in accordance with the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act and corresponding Danish and Norwegian legislation.

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