Forskargruppe for europarett

No State aid in Norway’s participation in credit facility in favour of Scandinavian Airlines (SAS)

The test of concomitance and the Market Economy Investor Principle (MEIP)



On July 9, the EFTA Surveillance Authority (ESA) closed a formal investigation regarding a Revolving Credit Facility (RCF) granted to SAS in 2012. The investigation was opened in June 2013 following a complaint.[1]


SAS is the major air carrier in Scandinavia. Its four largest shareholders are Sweden (21.4%), Denmark (14.3%), Norway (14.3%) and the Knut and Alice Wallenberg foundation (KAW) (7.6%). As the public support in question was granted by Norway, Denmark and Sweden, ESA[2] and the European Commission[3] conducted parallel investigations in close cooperation with each other.


The 2012 intervention was not the first that fell under Articles 107(1) TFEU and 61(1) EEA, respectively. In March 2009 and April 2010, Norway, Denmark and Sweden, together with KAW and several private players, injected capital into SAS through two rights issues (case SA.29785)[4] as a part of implementing a cost reduction plan. In finding that those measures were in line with the MEIP, the Commission placed much emphasis on the fact that public and private players participated equally in the rights issues (i.e. the test of concomitance was passed). In April 2012, SAS and the Swedish state owned company Swedavia entered into a sale-and-lease-back transaction regarding real estate belonging to SAS (case SA.36327).[5] This transaction was carried out on market terms, and was thus aid-free.


The 2012 intervention was undertaken in relation to the most recent business plan, the 4XNG business plan, that is supposed to make SAS profitable again. In this respect, a revolving credit facility (RCF) granted in the past by a number of banks was replaced by a new RCF of around EUR 400 million. Half of the new RCF was provided by Norway, Denmark and Sweden in proportion to their shareholding while the remaining 50% by most of the banks that participated in the old RCF and KAW (case SA.35668).


The formal investigations were to clarify doubts entertained by both the Commission and ESA as to whether this intervention met the concomitance test. In other words, the alleged pari passu participation of the states, KAW and the banks in the new RCF was called into question.[6] This was because while the public shareholders increased their exposure to SAS through the participation in the new RCF, the banks significantly reduced theirs, given that they roughly halved their contribution to the new RCF when compared to the previous RCF. In addition, the alleged compliance with the MEIP, which is claimed by the states, is threatened by the reliability of the business plan, upon which the public investors relied when they decided to participate in the new RCF.


Today, ESA concluded that Norway's participation in the RCF does not constitute state aid. According to ESA, even though the three States and the banks were not in a comparable position when deciding to participate in the new RCF, in particular in view of the exposure of some of the banks towards SAS beyond the RCF, the investigation established the «robustness of the underlying assumptions of the business plan».[7] AS it pointed out, the plan had been reviewed by external advisers who confirmed its credibility. In addition, the risks taken by the States were further reduced as the collateral of the new RCF was sufficient.


Thus, ESA concluded that Norway’s participation complied with the MEIP as it intervened on terms that a private investor operating under market conditions would have accepted. It therefore procured no undue economic advantage to SAS and did not entail state aid. Importantly, the new RCF was never used and was effectively cancelled on 4 March 2014.


According to ESA, a non-confidential version of today's Decision will be published in the register of state aid decisions on its website, normally within a month.


[1] 259/13/COL: EFTA Surveillance Authority Decision of 19.6.2013 on the potential aid to Scandinavian Airlines (SAS), OJ C 290, 5.10.2013, pp. 9-23 (corr.).

[2] 259/13/COL: EFTA Surveillance Authority Decision of 19.6.2013 on the potential aid to Scandinavian Airlines (SAS), OJ C 290, 5.10.2013, pp. 9-23 (corr.).

[3] Commission Decision of 19.6.2013 State aid - Denmark/Sweden - State aids SA.29785 - «Core SAS» - Rights issue for SAS - Denmark/Sweden, SA.36327 - Alleged aid to SAS - Denmark/Sweden, SA.35668 - SAS new Revolving Credit Facility - Denmark/Sweden - Invitation to submit comments pursuant to Article 108(2) of the Treaty on the Functioning of the European Union, OJ C 283, 28.9.2013, pp. 8-40.

[4] See the 2013/C 283/06 decision on SAS.

[5] Ibid.

[6] The 259/13/COL decision on SAS, see recital 50 et seq.

[7]PR(14)44 of9.7.2014 - http://www.eftasurv.int/press--publications/press-releases/state-aid/nr/2292