STOCKHOLM (Reuters) - SAS (ST:SAS) on Monday said it would need about 12.5 billion crowns (£1.06 billion) in new funding and to take other measures as part of a recapitalisation plan aimed at surviving the coronavirus pandemic.
The global airline industry is struggling to cope with widespread lockdowns and travel restrictions that have forced carriers to ground most of their fleets.
Air travel is expected to take months or even years to recover as lockdowns are gradually eased.
"The aim of the plan is to ensure that SAS is fully funded and that shareholders equity will be at levels reported before the COVID-19 pandemic when anticipated business volumes return to pre-corona levels in 2022," SAS said in a statement.
The Swedish government said it would ask parliament to allow it to support the ailing airline with up to 5 billion crowns and to increase its ownership stake.
Sweden owns 14.8% of SAS, slightly more than Denmark, with 14.2%.
Shares in SAS were up 5% at 0835 GMT.
The government said it aimed to increase its ownership through the recapitalisation, but did not specify by how much.
However, it said its support was conditional on SAS setting tougher emissions goals as part of its new operating model.
"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," Financial Markets Minister Per Bolund told reporters at a news conference.
SAS said in late May that it was in talks with shareholders to raise money to keep flying. Sweden and Denmark, have already stepped in to aid the airline, guaranteeing a 3.3 billion crown credit facility.
SAS reported losses before tax for the February-April quarter - the period first hit by the virus outbreak - of 3.72 billion Swedish crowns ($387 million), roughly three times the size of its loss a year earlier.