Q2 2022: RAMP-UP AND TRANSFORMATION OF SAS CONTINUE

SAS continues the ramp-up and has during the quarter seen the highest number of
passengers since the pandemic started. Meanwhile, the work with the necessary
transformation plan, SAS FORWARD, continues.

The plan was presented when the Q1 results were released on February 22 and is
designed to secure long-term competitiveness. It will allow SAS to effectuate a
deleveraging of its balance sheet while substantially improving its liquidity
position. In addition to reducing the cost structure and improve efficiencies,
SAS is seeking to convert approximately SEK 20 billion of debt and hybrid notes
into common equity and will also seek to raise not less than SEK 9.5 billion in
new equity capital. The success of the plan depends upon SAS attracting
potential new capital from the capital markets and other sources and upon SAS
fully achieving the targeted SEK 7.5 billion annual cost reduction by fiscal
year 2026.

Earnings before tax ended at negative SEK 1.6 billion for the quarter and the
cash balance at the end of the quarter was SEK 8.5 billion.

FEBRUARY 2022-APRIL 2022

  · Revenue: MSEK 7,048 (1,932)
  · Income before tax (EBT): MSEK -1,557 (-2,331)
  · Income before tax and items affecting comparability: MSEK -1,613 (-2,331)
  · Net income for the period: MSEK -1,520 (-2,410)
  · Earnings per common share: SEK -0.21 (-0.35)

SIGNIFICANT EVENTS DURING THE QUARTER

  · SAS presented a comprehensive transformation plan: SAS FORWARD. A successful
implementation of the plan will secure long-term competitiveness and improved
financial strength
  · The SEK 3,000 million credit facility secured with the main owners in 2021
was drawn
  · Erno Hildén was appointed as Executive Vice President and CFO

SIGNIFICANT EVENTS AFTER THE QUARTER

  · The aftermath of the COVID-19 pandemic has led to most of the airline
industry experiencing difficulty in rebuilding operations. This has led to SAS
reducing its summer program by 4,000 of a total of 75,000 flights

NOVEMBER 2021-APRIL 2022

  · Revenue: MSEK 12,593 (4,214)
  · Income before tax (EBT): MSEK -4,154 (-4,246)
  · Income before tax and items affecting comparability: MSEK -4,234 (-4,258)
  · Net income for the period: MSEK -3,962 (-4,443)
  · Earnings per common share: SEK -0.55 (-0.63)

QUARTERLY RESULTS ARE IMPROVED AS A RESULT OF RAMP-UP

Looking back at the second quarter, we can see that demand improved as travel
restrictions were eased. Passengers flying with SAS increased 28% compared to
the previous quarter and the flown load factor reached approximately 67%, up 11
percentage points compared with the earlier quarter. Our capacity was increased
by 3% compared to the first quarter. The transformation of SAS has to continue
to adapt to the new market conditions in order to be able to remain flexible,
competitive and financially strong for the long-term future. Earnings before tax
ended at negative SEK 1.6 billion, an improvement of SEK 1.0 billion compared
with last quarter, or a SEK 0.7 billion improvement year-on-year. Ticket sales
continue to increase ahead of the summer period and SAS is targeting 80%
capacity deployment compared to summer 2019.

Cost reductions across all of SAS remain in focus to secure our cost
competitiveness. Total operating expenses during the quarter ended at SEK 7.8
billion and total operating revenue landed at SEK 7.0 billion for the quarter.
Total revenue increased 27% compared with the first quarter, an improvement of
approximately SEK 5.1 billion compared with last year, but still 31% below the
second quarter in 2019, which was unaffected by COVID-19.

The cash balance at the end of the quarter was SEK 8.5 billion. At end of the
first quarter of FY2022 the cash balance was SEK 3.4 billion. Operational cash
flow during the quarter amounted to SEK 2.5 billion, compared with SEK -1.4
billion for the same period last year.

UPDATE ON SAS PROGRESS ON TRANSFORMATION PLAN

Despite this positive development, SAS continues to face substantial structural
cost challenges while also facing growing competition with substantially lower
cost structures than SAS. SAS also incurred substantial additional debt during
the pandemic that added to its pre-COVID highly leveraged balance sheet. In
addition, recent macroeconomic changes (including fuel and exchange rates) and
geopolitical events are limiting operations and create additional costs. Given
these factors, the SAS Board has concluded that a substantial restructuring is
needed to enable SAS to become profitable by implementing SAS FORWARD.

Key Elements of SAS FORWARD

  · Reducing the annual costs by SEK 7.5 billion
  · Redesigned fleet, network and product offerings
  · Digital transformation
  · Positioning SAS as the leader in sustainable aviation
  · Operating platform acceleration
  · Strengthening SAS' balance sheet by deleveraging and raising new capital

Debt-to-equity conversion and equity raise

SAS is seeking to convert approximately SEK 20 billion of existing debt and
hybrid notes into common equity, of which a majority is on-balance sheet debt
and hybrid instruments (state hybrid notes, commercial hybrid notes, lease
liabilities, Swiss bonds and term loans from states and commercial banks) and
some relates to maintenance contract obligations and other executory contract
obligations. The contemplated conversions are designed to strengthen the balance
sheet and significantly reduce the debt-burden being carried in order to relieve
SAS from elevated financial costs that currently weigh on profitability, and to
position SAS for future growth.

In addition to debt conversions, SAS is looking for alternatives to raise new
equity. SAS will seek to raise not less than SEK 9.5 billion in equity capital.
The planned SEK 9.5 billion or more equity raise is expected to provide
sufficient liquidity to fund operations through the full implementation of SAS
FORWARD and the recovery in passenger demand post COVID-19. It is currently
expected that a significant share of such new equity will likely be sought from
new investors.

The new equity capital and debt-to-equity conversions contemplated as part of
SAS FORWARD will entail substantial dilution to existing shareholders.

Labor discussions

SAS continues to pursue negotiations with all of its organized labor groups as a
means of achieving a consensual outcome with respect to labor's share of the
burden sharing program. Notably, the requested labor concessions are an
important element of SAS achieving a competitive and sustainable business model,
but in aggregate represent less than 20% of the targeted annual cost
improvements. An agreement with organized labor groups is a condition of SAS
FORWARD and it will not be possible to raise new capital or secure the future of
the airline without labor burden sharing.

Update on discussions with stakeholders

Discussions are currently ongoing regarding stakeholders' participation and
acceptance of burden sharing. Given the limited progress made so far, there can
be no guarantees that SAS FORWARD will be successfully completed. In the event
that the expected burden sharing, debt conversions, and new capital raise are
not completed as planned, SAS will not be able to support its existing capital
structure and current liquidity levels and it cannot be ruled out that SAS could
become unable to meet its obligations over the longer term as they fall due.

Implementation processes

SAS FORWARD involves complex multiparty negotiations. As is usual in a
restructuring process, it is possible that SAS may seek to utilize one or more
court restructuring proceedings designed to assist in the resolution of SAS's
financial difficulties and help implement parts of SAS FORWARD.

Finally, it should be noted that the completion of the cost reduction programs,
the debt-to-equity conversions, the fleet restructuring and the significant
equity capital raise are subject to uncertainty and there can be no guarantee of
success in such efforts by SAS. Further, the transactions envisaged are subject
to various conditions including EU Commission and other state aid approvals and
other regulatory clearances and various stakeholder approvals, which have not
yet been obtained.

POSITIVE MARKET DEVELOPMENT TOWARD THE SUMMER SEASON

SAS continues the ramp-up and has during the quarter had the highest number of
passengers since the pandemic started. We have recently experienced positive
market development and strong ticket sales ahead of the important summer season.
SAS and Apollo (a provider of charter travel services to and from the Nordic
market) also signed an agreement during the quarter, concerning summer charter
flights, within the framework of their three-year collaboration. Flights will
depart from around 20 locations in Sweden, Norway and Denmark and fly to around
30 Mediterranean destinations.

The SAS traffic program and capacity are increased according to customer demand,
but there are constraints to the growth of traffic, as effects of the pandemic
linger on. The whole airline ecosystem has difficulties ramping up, which also
has an implication on SAS. We foresee challenges during summer relating to
everything from airports and ground staffing to crew training bottlenecks such
as availability of training instructors, and we also see continued delayed
aircraft deliveries. In order to minimize the risk of disruption and create more
stability for the upcoming summer travels, SAS has made adjustments to the
traffic program during June to August, after the quarter ended.

SAS aims to be a global leader in sustainable aviation and during the quarter we
launched the Travel Pass Biofuel, a punch card for corporate customers who
regularly travel to the same destination and want to include biofuel to reduce
the climate impact of their trips.

LOOKING AHEAD

We see a pent-up demand for traveling and underlying demand is healthy, both for
business and for leisure travel. However, we still remain cautious due to the
prevailing uncertainties. Traffic to and from Asia remains affected by remaining
COVID-19 restrictions as well as the geopolitical situation.

I am grateful for the hard work my colleagues at SAS are delivering, to ensure
that we take care of our customers in the best possible way. Together we are
working our way through these challenging times and we welcome our customers on
board our aircraft.

Anko van der Werff

President and CEO

Stockholm, May 31, 2022

SAS' Q2 2022 teleconference

A teleconference and webcast for investors, analysts and media will be held at
10.00 AM (CET) on Tuesday, 31st of May 2022.

Anko van der Werff, President & CEO, Erno Hildén, Executive Vice President &
CFO, will present and comment on the report.

The presentation will be held in English via telephone or https://edge.media
-server.com/mmc/p/9s7iqpeh

No advance notification is necessary.

Dial-in details for the conference call:

DK: [phone]

FI: [phone]

NO: [phone]

SE: [phone]

UK: [phone]

Pin: 94 31 68 01 #

The presentation and the report will be available on https://www.sasgroup.net
after the publication.

For further information, please contact:

SAS press office: [phone]

SAS, Scandinavia's leading airline, with main hubs in Copenhagen, Oslo and
Stockholm, is flying to destinations in Europe, USA and Asia. Spurred by a
Scandinavian heritage and sustainable values, SAS aims to be the global leader
in sustainable aviation. We will reduce total carbon emissions by 25 percent by
2025, by using more sustainable aviation fuel and our modern fleet with fuel
-efficient aircraft. In addition to flight operations, SAS offers ground
handling services, technical maintenance and air cargo services. SAS is a
founder member of the Star AllianceT, and together with its partner airlines
offers a wide network worldwide. Learn more at https://www.sasgroup.net

This is information that SAS AB is obliged to make public pursuant to the EU
Market Abuse Regulation. The information was submitted for publication by Louise
Bergström at 08:00 CET on May 31, 2022.

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