“Woke” Scandinavian airline SAS may not survive without help as coronavirus fears have led to its stock price crumbling.
The airline saw a major blow to its stock price on Thursday morning, opening down 11 per cent following the announcement by U.S. President Donald Trump that the United States would be banning all travel from European Schengen Area countries for a month.
Joakim Bornold, analyst and economist at Söderberg & Partners, commented on the downturn of the Swedish stock market in general, which ended trading Thursday down 10.57 per cent, saying in comments reported by Expressen: “There are brutal downturns on the stock exchange now. However, it is not based on panic but rather a rational course of action.”
“The conditions for the economy are changing rapidly now and the stock exchange needs to change to a new reality,” he added, and said the future for SAS airlines could be in question.
“SAS will probably not survive this without help. A capital injection from the owners feels inevitable. At the same time, the entire European aviation industry is in urgent need of consolidation… The coronavirus could very well be the start of such a process, and then SAS will probably disappear into a larger aviation group,” he said.
SAS faced a mass public social media backlash last month after putting out a promotional video claiming that nothing is Scandinavian.
Danish People’s Party (DF) foreign affairs spokesman Søren Espersen was among those who slammed the company, while Richard Jomshof of the populist Sweden Democrats party said he would never fly with the company again.
Sweden’s economy was on a downturn before the coronavirus outbreak, with many predicting higher unemployment levels, particularly for migrants, were on the way.
The Swedish Employment Service warned in late February that the unemployment situation could be the worst since the 1990s.
Joakim Bornold told Expressen that he also predicts job losses, saying: “Unemployment will most likely rise steeply in the next few months. We already see layoffs, especially in hotels, shops, and restaurants to start with.”