The Governments of Sweden and Denmark have agreed to increase their respective stakes in Scandinavian carrier SAS.

The stakes in the carrier have now increased to 21.8%. Sweden and Denmark previously held 14.8% and 14.2% respectively.

It is part of SAS’ recapitalisation plan first revealed in June to allow it to continue as a key provider of Scandinavian airline infrastructure.

The revised recapitalisation plan received approval from both governments in August.

The carrier is one of the several airlines that have been severely affected by the Covid-19 pandemic.

The finalised plan includes funding of around $1.37bn and the conversion of a further Skr2.25bn ($256m) debt into equity.

SAS chief executive Rickard Gustafson was quoted by Gulf Times as saying that he was ‘grateful for the support from our largest owners, the government of Sweden, the government of Denmark, and Knut and Alice Wallenberg’s Foundation, that they have demonstrated throughout this recapitalisation process’.

He said: “Looking ahead, our focus is to execute on our business plan aimed at adapting SAS to a market defined by lower demand, and to return as a profitable and more sustainable airline as the world recovers from the Covid-19 pandemic.”

In April, SAS announced its plan to cut 5,000 staff or approximately 40% of its workforce due to the continuous grounding of aircraft.

In September, the airline said that it carried 0.6 million passengers and reported a capacity reduction of 73% compared with the previous year.