Not for release, publication or distribution, directly or indirectly, in or
into
the United States, Canada, Japan, Australia or any other jurisdiction
where such
action would be unlawful.
As previously announced by SAS AB (“SAS”
or the “Company”), the COVID-19
pandemic and the associated travel restrictions
have created a global crisis for
the aviation industry. SAS immediately
implemented a broad range of measures to
radically reduce costs as a result of
the decline in demand, which is not
expected to return to pre COVID-19 levels
before 2022. The Board of Directors of
SAS (the “Board”) has therefore decided
on a revised business plan to tackle the
expected effects of the pandemic. The
plan includes approximately SEK 4 billion
in efficiency improvements in all
parts of the Group by 2022. However, neither
the broad measures implemented to
date nor the planned efficiency improvements
will alone be sufficient to help
restore the Group’s equity position to pre
COVID-19 levels, nor help secure the
required level of funding for SAS to
continue as a key provider of important
Scandinavian airline infrastructure.

In light of this, the Board has decided
on a recapitalization plan (the
“Recapitalization Plan”) that is supported by
the Company’s two largest
shareholders, the governments of Sweden and Denmark
(jointly the “Major
Shareholders”), and the third largest shareholder, the Knut
and Alice Wallenberg
Foundation (“KAW”). The Recapitalization Plan is intended
to restore equity by
SEK 14.25 billion and secure approximately SEK 12 billion
of new funding through
the following proposed steps:

  · Directed issue of
common shares in the amount of approximately MSEK 2,006 to
the Major
Shareholders;
  · Rights issue of new common shares available to eligible
shareholders in an
amount of approximately MSEK 3,994, expected to be covered
by subscription
undertakings and underwriting commitments corresponding to
81,5% of the total
amount of the rights issue;
  · Directed issue of new hybrid
notes in a total amount of MSEK 6,000 to the
Major Shareholders;
  · Conversion
of MSEK 2,250 senior unsecured fixed rate bond due November 2022
into common
shares; and
  · Conversion of MSEK 1,500 subordinated perpetual floating rate
capital
securities[1] (http://#_ftn1) into common shares.

The Recapitalization
Plan is subject to necessary general meeting approvals. The
Major Shareholders’
participation is conditional on inter alia the conversion of
the outstanding
bonds and hybrid notes into common shares, the approval by the
European
Commission and exemption from the mandatory bid obligation from the
Swedish
Securities Council. The participation by KAW is conditional on
the
participation by the Major Shareholders.

SAS is committed to its
sustainability agenda in line with expectations from the
Swedish and Danish
     governments.

[1] (https://scandinavianairlinessystem.sharepoint.com/sites/Inves
          torRelations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Ho
          ward/Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftn
     ref1)
Already
accounted for as equity.

“On behalf of the SAS Board of Directors, I
would like to thank our shareholders
for providing support in these
unprecedented and challenging times. I would also
like to thank the SAS
employees for their exceptional commitment and support
during this difficult
period. I count on SAS employee groups to support the
Recapitalization Plan by
finding solutions to deliver the required efficiency
improvements.

The Board
supports and believes that the Recapitalization Plan presents a
balanced way
forward given the magnitude of the recapitalization and the
conditional burden
sharing measures. Along with the Group’s revised business
plan, the
Recapitalization Plan will enable us to withstand this crisis and
return as a
profitable and sustainable Scandinavian infrastructure provider,”
says Carsten
Dilling, chair of the SAS Board of Directors.

Summary of the Recapitalization
Plan

The Recapitalization Plan consists of the following components:

  ·
Directed issue of common shares in the amount of approximately MSEK 2,006
and
at a subscription price of SEK 1.16 to the Major Shareholders
(split
approximately MSEK 1,016 to the Government of Denmark and approximately
MSEK 990
to the Government of Sweden in case the Rights Issue is
fully
subscribed[1] (http://#_ftn1)) (the “Directed Issue”).
  · Rights issue
of new common shares available to eligible shareholders in an
amount of
approximately MSEK 3,994 and at a subscription price of SEK 1.16,
expected to
be covered by subscription undertakings and underwriting
commitments
corresponding to 81.5% of the total amount of the rights issue,
where
approximately MSEK 2,994 is covered by pro rata subscription undertakings
and
underwritings commitments from the Major Shareholders (split equally) and
pro
rata subscription undertaking from KAW of approximately MSEK 259, subject
to
certain conditions (the “Rights Issue”).
  · Directed issues of new SEK
denominated subordinated capital securities with
perpetual tenor to the Major
Shareholders, in a total amount of MSEK 6,000 (the
“New Hybrid Notes”) as two
separate instruments:
    · One set of hybrid notes (“NHN1”) in an amount of
MSEK 5,000, split equally
among the Major Shareholders, with annual interest
step-ups over the coming
years; and
    · One set of hybrid notes (“NHN2”) in
an amount of MSEK 1,000, to Denmark
with an additional 1% interest on top of
interest rates paid on NHN1.

  · Conversion of the SAS MSEK 2,250 senior
unsecured fixed rate bond due
November 2022 (ISIN SE0010520338) (the “Bonds”)
into common shares at 81.3% of
par value and at a subscription price of SEK
1.89 per share, to be approved by a
meeting of holders of the Bonds on 17 July
2020.[2] (http://#_ftn2)
  · Conversion of the SAS MSEK 1,500 subordinated
perpetual floating rate
capital securities (ISIN SE0012193910) (the “Existing
Hybrid Notes”) into common
shares at 70.8% of par value and at a subscription
price of SEK 1.89 per share,
to be approved by a meeting of holders of the
Existing Hybrid Notes on
17 July 2020.[3] (http://#_ftn3)
  · An Extraordinary
General Meeting in SAS will be held on or around
25 August 2020 (the “EGM”) to
adopt the necessary resolutions under the
Recapitalization Plan, and any
resolutions related thereto, in accordance with a
convening notice to be
announced on or around 23 July 2020.
  · Following a successful implementation
of the Recapitalization Plan, the
Company will cancel, and prepay any amount
outstanding, of its SEK 3.3 billion
three-year revolving credit facility
agreement, 90% guaranteed by the Major
Shareholders, in accordance with its
terms and conditions.

Subject to successful completion of the Recapitalization
Plan, the Company aims
to convert MSEK 2,250 of debt to
equity[4] (http://#_ftn4) and raise MSEK 12,000
of new equity, before
recapitalization costs estimated at approximately MSEK
140, and restore equity
by SEK 14.25 billion. The completion of the
Recapitalization Plan will result
in marginally higher financial payments going
forward compared to the financial
payments for the Existing Hybrid Notes and the
Bonds. The number of shares and
votes in the Company will increase by up to
6,702,175,698 to up to
7,084,758,249 corresponding to a dilution of up to 95%
(mitigated to some
extent for those shareholders who participate in the
Rights
Issue).[5] (http://#_ftn5)

In addition to the SEK 14.25 billion, an
additional MSEK 500 has been secured
through commercial agreements with Norway,
under which the Norwegian state has
paid and will pay for SAS to maintain a
certain level of network capacity. In
combination with the new funding outlined
above, this will ensure that SAS has
secured the SEK 12.5 billion of required
funding.

Each of the Major Shareholders has expressed its support for
the
Recapitalization Plan and expressed its intention to, subject to, inter
alia,
the conversion of the Bonds and Existing Hybrid Notes, the approval by
the
European Commission and exemption from the mandatory bid obligation from
the
Swedish Securities Council: (a) subscribe for common shares in the
Directed
Issue in the amount of approximately MSEK 2,006 (split approximately
MSEK 1,016
to Denmark and approximately MSEK 990 to Sweden in case the Rights
Issue is
fully subscribed[6] (http://#_ftn6)), (b) subscribe for its pro rata
share
(based on current ownership of Sweden 14.82% and Denmark 14.24%) of the
Rights
Issue, (c) underwrite such additional number of common shares in the
Rights
Issue that the commitment by each Major Shareholder amounts to
approximately
MSEK 1,497 (i.e. in aggregate approximately MSEK 2,994,
corresponding to
approximately 75% of the Rights Issue), and (d) subscribe for
the New Hybrid
Notes, with the Government of Denmark to subscribe for MSEK
3,500 and the
Government Sweden to subscribe for MSEK 2,500 of the New Hybrid
Notes. Following
completion of the share issues under the Recapitalization
Plan, the governments
of Denmark and Sweden will end up holding the same number
of shares and votes in
the Company.[7] (http://#_ftn7)

The third largest
shareholder, KAW, has expressed its support for the
Recapitalization Plan and
has undertaken to subscribe for its pro rata share
(6.50%) of the Rights Issue,
corresponding to approximately MSEK 259, subject to
among other things the
fulfilment of the above described subscription and
underwriting commitments by
the Major Shareholders.

All Board members elected by the general meeting, as
well as members of the
group management, that currently hold shares in SAS have
expressed their
intention to subscribe for their pro rata share in the Rights
Issue.

SAS’ three largest shareholders, the Major Shareholders and KAW, who
in
aggregate hold approximately 35.56% of outstanding shares and votes,
have
expressed their support of the Recapitalization Plan and their intent to
vote in
favor of the Board’s proposals at the EGM subject to certain
conditions.

As mentioned above, the capital injection by the Major
Shareholders will be
subject to approval by the European Commission under State
aid rules. An
approval decision is expected to be subject to conditions under
the COVID-19
Temporary Framework which include, among others, a ban on
dividends, limitations
on M&A and a freeze of management remuneration.
Conditions will be released
gradually as the aid is repaid. Full disclosure of
conditions will be made after
European Commission’s
approval.

Background

Before the onset of COVID-19, SAS experienced a high
demand for its services and
delivered a robust operational performance in terms
of regularity and
punctuality. As a consequence, SAS reported increased number
of passengers and
revenues as well as overall market share. However, as the
full effects of the
pandemic became evident, containment measures such as
social distancing, travel
restrictions, quarantines and lock downs, resulting
in dramatically changed
traveling patterns, had an immediate detrimental impact
on the aviation sector.
This resulted in a sharp drop in number of passengers
and consequently revenues
for SAS.

The decline in demand immediately triggered
SAS to implement a broad range of
measures to radically reduce costs and
preserve cash. Approximately 90% of the
workforce is or has been on temporary
layoff schemes and there has been a
significant reduction of the network. All
non-essential spend and projects have
been suspended.

Payment holidays or
discounts have been agreed with the majority of suppliers
(including lessors).
As a result of the measures taken, the monthly average
operating cash
expenditure has been reduced to an estimated MSEK 500-700 in Q3
-Q4 FY20.

In
addition, SAS’ capital expenditures have also been reduced by
deferring
aircraft deliveries and postponing other investments. Measures have
also been
taken to strengthen SAS’ liquidity through securing a SEK 3.3 billion
credit
facility, financing five A320neo spare engines and sale & lease back
agreements
on one A350 and three A320neos have been signed.

Despite countries
starting to re-open their borders, the ramp-up phase for the
airline industry
is expected to last until 2022 before demand reaches pre COVID
-19 levels and
is subject to considerable uncertainty. SAS expects difficulties
reaching
profitability until operations reach more normalized levels, currently
expected
in FY22, creating a significant need for recapitalization. During this
phase,
SAS must ensure cost-efficient ramp up to reduce losses, while
introducing
“safe travel” measures to adapt to new requirements and
stimulate
travel.

Revised business plan

Given the negative financial impacts
of the pandemic going forward, the Board of
SAS has decided on a revised
business plan, which involves a broad range of
measures to tackle the effects
of the pandemic. As part of this, the Company is
pursuing approximately SEK 4
billion in efficiency improvements. The revised
business plan is based on
rightsizing the Company and its cost structure to
reflect a new situation of
lower expected demand and is based on four pillars:

 1. Preferred airline for
Scandinavia’s frequent travelers
SAS will continue to focus on Scandinavia’s
frequent travelers to maintain its
strong position in Scandinavia. SAS will
also continue to build on its
Scandinavian footprint and prioritize main
traffic flows within Scandinavia and
to European major cities. SAS will
maintain CPH as its main long-haul hub,
complemented by selective long-haul
routes from OSL/ARN. To further strengthen
the relationship with its core
customers SAS will continue to develop
Scandinavia’s largest loyalty program,
EuroBonus.
 2. Hyper modern single-type Airbus fleet
SAS will continue its
fleet renewal and by 2025 it is expected to have one of
Europe’s most modern
and efficient aircraft fleets. The single-type Airbus fleet
will lead to
significantly lower fuel consumption and reduced maintenance costs.
It will
also lead to reduced stand-by levels and thereby improved productivity.
SAS is
also evaluating a replacement for its ageing 737-fleet in the mid-size
segment
(120-150 seats). By 2025, SAS is expected to have completed the
introduction of
a next generation mid-size aircraft. Finally, SAS is
continuously working with
its wet lease suppliers to ensure renewal of the
aircraft in the smaller
segments.
 3. Fully competitive operating model
In order to adapt the
organization to a lower demand environment, the revised
business plan is
expected to deliver SEK 4 billion in efficiency improvements by
2022. This
includes:

  · Personnel cost reductions from work force redundancy of up to
5,000
positions and renegotiated collective bargaining agreements including
increased
productivity of 15-25%. The initiatives are expected to result in a
new and more
effective SAS organization adapted to the market environment;
  ·
Reduced sales & marketing spend, renegotiated supplier agreements
including
lessors, and more focused IT projects and investments; and
  · Other
operational efficiency improvements, including efficient phase-out of
aircraft
to reach a one type fleet and lower fuel consumption, deferring
aircraft
deliveries and reaching improved agreements with lessors, improved
technical
maintenance procedures and wet lease operations.

        4. Global leadership
in Sustainable aviation

SAS works continuously to reduce the climate and
environmental impacts of its
operations through innovation and investment in
new technology. SAS’ target of a
25% reduction (compared to 2005 levels) of its
net CO\2\ emissions by 2030 has
in the revised business plan been accelerated
to 2025. The reduction is
equivalent to all CO\2\ emissions on SAS’ flights
within Scandinavia in 2019,
and ensures that SAS contributes positively to the
targets set out in the Paris
Agreement. SAS will also explore commercial
collaborations with railway service
providers.

A cornerstone in this agenda is
to continue SAS’ ongoing fleet renewal. In 2025,
SAS is expected to operate one
of the youngest fleets in Europe, with the most
environmentally efficient
aircraft type in each segment. SAS intends to achieve
this goal by continuing
the introduction of new fuel-efficient A320neo and A350
aircraft into its
fleet, while at the same time increasing its efficiency to
minimize fuel
consumption during flights.

Furthermore, SAS expects to take a world-leading
position in the usage of
renewable aviation fuels. Sustainable aviation fuels
(SAF) are renewable sources
of jet fuel and reduce net CO\2\-emissions by up to
80% compared to traditional
jet fuel. To reach SAS’ ambitious environmental
targets by 2025, access to up to
10% of SAS’ fuel consumption is a
prerequisite. SAS will therefore utilize
existing production capacity and sign
offtake agreements to secure sufficient
volumes at the right price. SAS will
also explore partnerships with providers of
carbon capture and
storage.

Finally, SAS has identified an opportunity for Scandinavia to lead
the way to
create a new “green base industry” around SAF production. This
requires close
collaboration with stakeholders across multiple industries in
Scandinavia and a
supportive regulatory framework. In combination with other
efficiency measures,
such as a fully implemented Single European Sky, this
could potentially enable
SAS to reach up to 50% reduction of net
CO\2\-emissions by 2030 (compared to
2005).

The revised business plan and the
Recapitalization Plan demonstrates SAS’
commitment to its overall long-term
goal to create value for its shareholders
and to delivering sustainable and
profitable growth, through the cycle. SAS
maintains its three financial
targets, which now have been adjusted to reflect
IFRS 16, expected to be
implemented from the end of the current fiscal year:

  · Post-tax Return on
invested capital (ROIC) to exceed to post-tax Weighted
Average Cost of Capital
(WACC)
  · Financial net debt/EBITDA to be a multiple of less than three and a
half
(3.5x)
  · Financial preparedness to exceed 25% of SAS’ annual fixed
costs

Details on the Recapitalization Plan

Directed Issue

A directed issue
of new common shares in the amount of approximately MSEK 2,006
to the Major
Shareholders (split approximately MSEK 1,016 to the Government of
Denmark and
approximately MSEK 990 to the Government of Sweden in case the
Rights Issue is
fully subscribed[8] (http://#_ftn8)) at a subscription price of
SEK 1.16. The
Directed Issue will increase the number of shares and votes in the
Company by
1,729,170,834 (split 875,708,407 shares to Denmark and 853,462,427
shares to
Sweden in case the Rights Issue is fully
subscribed[9] (http://#_ftn9)) and the
allocation between the Major Shareholders
will be determined when the final
outcome of the Rights Issue is known.
Following completion of the share issues
under the Recapitalization Plan, the
governments of Denmark and Sweden will end
up holding the same number of shares
and votes in the Company.
[10] (http://#_ftn10)

The Rights Issue of common shares

The Rights Issue is
expected to raise proceeds of approximately MSEK 3,994
before transaction costs
and fees and is expected to be covered by subscription
commitments and
underwritings from the Major Shareholders and KAW corresponding
to 81.5% of the
total amount of the Rights Issue as set out above. Eligible
shareholders will
receive 9 (nine) subscription rights for each share held on
the record date, 2
September 2020. Each subscription right will carry an
entitlement to subscribe
for 1 (one) new common share at a subscription price of
SEK 1.16 per share.
Holders of subscription rights registered in Denmark or
Norway will pay an
amount in DKK or NOK corresponding to the subscription price
of SEK 1.16 per
share, to be determined and communicated by the Company before
the end of the
subscription period. The Rights Issue will increase the number of
shares and
votes in the Company by 3,443,242,959.[11] (http://#_ftn11)

The Board will
allot any shares subscribed for without the exercise of
subscription rights to
those who have also subscribed for shares on the basis of
subscription rights,
regardless of whether or not the subscriber was a
shareholder on the record
date. Any remaining shares will primarily be allotted
to shareholders and
others who have indicated their interest to subscribe for
shares without
subscription rights, and finally if required, to the Major
Shareholders in
their capacity of underwriters.

Further information on the estimated time
schedule of the Rights Issue is set
out below under “Key indicative
dates”.

Issue of the New Hybrid Notes

The New Hybrid Notes will constitute
SEK denominated subordinated capital
securities with perpetual tenor. The New
Hybrid Notes will be issued as two
separate instruments (NHN1 and NHN2).

NHN1
will be placed with the Major Shareholders in the total amount of MSEK
5,000
split equally between them. These hybrid notes will have a floating
interest
rate of 3M STIBOR plus an initial margin of 250 bps. The margin of the
notes
will thereafter increase to the following: during 2nd and 3rd year 350
bps,
during 4th and 5th year 500 bps, during 6th and 7th year 700 bps, and
during
8th year and thereafter 950 bps.

NHN2 will be placed with Denmark in the total
amount of MSEK 1,000. These hybrid
notes will have a floating interest rate of
3M STIBOR plus an initial margin of
350 bps. The margin of the notes will
thereafter increase to the following:
during 2nd and 3rd year 450 bps, during
4th and 5th year 600 bps, during 6th and
7th year 800 bps, and during 8th year
and thereafter 1,050 bps.

The New Hybrid Notes are freely transferable,
callable at any time at par value,
and will be treated as equity in SAS’
accounting,

Conversion of the Bonds into common shares

As part of the
Recapitalization Plan, the Swedish and Danish governments
require, as a
condition to their capital injections, burden sharing measures to
be
implemented including conversion of the Bonds into common shares in SAS. On
the
basis thereof and following extensive negotiations to date, the Board
presents
the following proposal to the holders of the Bonds, which proposal is
a
necessary and required part of the Recapitalization Plan that the Company
from
an overall perspective considers to strike a balance between
various
stakeholders given the magnitude of the recapitalization and the
requirements
from the Major Shareholders.

The Board of Directors has therefore
decided to summon a meeting amongst the
holders of SAS MSEK 2,250 senior
unsecured bond due November 2022 to resolve
upon the conversion of the Bonds
into common shares in SAS. Subject to
bondholder approval, the Bonds will be
exchanged for common shares in the
Company at 81.3% of par value and at a
subscription price of SEK 1.89 per
share.[12] (http://#_ftn12) In order to
resolve on the conversion of the Bonds,
at least 50% of the adjusted nominal
amount must

participate in the meeting and at least 80% of the attending
adjusted nominal
amount must vote in favor of the proposed exchange of the
Bonds.

Following such resolution, SAS will convert MSEK 2,250 of debt to
equity in
total. The number of shares and votes in the Company will increase by
up to
967,857,143.[13] (http://#_ftn13) The meeting with the holders of the
Bonds is
to be held on 17 July 2020.

Bondholders casting their vote before 9
July 2020 (the “Early Bird Deadline”)
will receive an additional fee of 0.2% of
the nominal amount of each Note for
which they vote, regardless of voting in
favor or against the proposal. Fees
will be paid within 10 Business Days after
conversion and is subject to
successful outcome from both the meeting with the
holders of the Bond and the
meeting with the holders of the Existing Hybrid
Notes. Further information about
the notice to the meeting with the holders of
the Bonds can be found below.

Conversion of the Existing Hybrid Notes into
common shares

On the basis of, and for the reasons set out above under
“Conversion of the
Bonds into common shares”, the Board of Directors has
decided to summon a
meeting of the holders of the MSEK 1,500 Existing Hybrid
Notes to resolve upon
the conversion into common shares in SAS. Subject to
approval by the holders of
the Existing Hybrid Notes, the Existing Hybrid Notes
will be exchanged for
common shares in the Company at 70.8% of par value and at
a subscription price
of SEK 1.89 per share.[14] (http://#_ftn14) In order to
resolve on the
conversion, at least 50% of the outstanding adjusted nominal
amount must
participate in the meeting and at least 2/3 of the attending
adjusted  nominal
amount must vote in favor of the proposed exchange of the
Existing Hybrid Notes.

Following such resolution, the number of shares and
votes in the Company will
increase by up to 561,904,762.[15] (http://#_ftn15)
The meeting with the holders
of the Existing Hybrid Notes is to be held on 17
July 2020.

Hybridholders casting their vote before the Early Bird Deadline
will receive an
additional fee of 0.2% of the nominal amount of each Note for
which they vote,
regardless of voting in favor or against the proposal. Fees
will be paid within
10 Business Days after conversion and is subject to
successful outcome from both
the meeting with the holders of the Bond and the
meeting with the holders of the
Existing Hybrid Notes. Further information
about the notice to the meeting with
the holders of the Existing Hybrid Notes
can be found below.

If the Recapitalization Plan is not implemented and fails,
SAS will not be able
to recapitalize and remedy the liquidity shortage and the
negative equity caused
by the COVID-19 outbreak, which would have a material
adverse effect on the
Company’s financial condition. Should SAS as a result of
such material adverse
effect on its financial condition be forced to file for
bankruptcy, it is likely
that the holders of the Bonds and Existing Hybrid
Notes will not be able to
recover any of their claims under the
notes.

Shareholder structure following the Recapitalization Plan

Following a
successful implementation of the Recapitalization
Plan,[16] (http://#_ftn16)
the total number of shares and votes in the Company
will increase by up to
6,702,175,698 to up to 7,084,758,249 corresponding to a
dilution of
95%.[17] (http://#_ftn17) As a result, the shareholdings would
change
significantly and, in the event the Rights Issue is fully subscribed by
the
Company’s shareholders or other investors and following settlement of
the
conversion of the Bonds and Existing Hybrid Notes (as set out above),
the
Recapitalization Plan will result in each of the governments of Sweden
and
Denmark holding 1,420,462,427 shares corresponding to respective
shareholdings
of approximately 20.05% of the total number of shares
and
votes,[18] (http://#_ftn18) current holders of the Bonds holding up
to
967,857,143 shares corresponding to approximately 13.7% of the total of
number
of shares and votes, and current holders of the Existing Hybrid Notes
holding up
to 561,904,762 shares corresponding to approximately 7.9% of the
total number of
shares and votes.

Key indicative dates

Early Bird Deadline   
                                             9 July 2020
Bondholders’ meeting  
                                            17 July 2020
Hybridholders’ meeting
                                            17 July 2020
EGM                   
                                          25 August 2020
Record date for Rights
Issue                                   2 September 2020
Rights Issue
prospectus made public                            4 September 2020
Subscription
period for the shareholders in Rights Issue  7 – 22 September 2020
Announcement
of outcome of the Rights Issue                   25 September 2020
Settlement /
conversion date                                     6 October 2020

The
EGM

The Board has decided to convene an EGM to be held on or around
25 August 2020
to resolve upon the measures under the Recapitalization Plan as
set out in the
notice convening the meeting, which will be announced separately
on or around
23 July 2020.

SAS’ three largest shareholders, the Major
Shareholders and KAW (where
applicable, conditional as set out above) who in
aggregate hold approximately
35.56% of outstanding shares and votes, have
expressed their support of the
Recapitalization Plan and their intent to vote
in favor of the Board’s proposals
at the EGM subject to certain
conditions.

Summons to noteholders’ meetings

The Company has today instructed
Intertrust (Sweden) AB, being the agent under
the Bonds (ISIN SE0010520338) and
the Existing Hybrid Notes (ISIN SE0012193910),
to send notices to noteholders’
meetings to all holders of the Bonds and the
Existing Hybrid Notes directly
registered in the Company’s debt ledger held with
Euroclear Sweden in order to
seek the respective holders of Bonds and Existing
Hybrid Notes approval of the
conversion of the Bonds and the Existing Hybrid
Notes into common shares and
the authorization of the agent to take measures on
behalf of the respective
holders in connection with the proposed conversion.

The notices to the
noteholders’ meetings and detailed information regarding the
voting procedure
and the requests to the holders of Bonds and Existing Hybrid
Notes, will be
available at the Company’s webpage (www.sasgroup.net).

Presentation

Rickard
Gustafson, President & CEO and Torbjørn Wist, Executive Vice President &
CFO
will present and comment the Recapitalization Plan at 11 a.m. CEST,
today,
Tuesday 30 June 2020.

The presentation will be held in English via
telephone
or
https://www.sasgroup.net/investor-relations/recapitalization-plan/

No
advance notification is necessary.

Dial-in details for the conference
call:

DK: +45 354 455 77 FI: +358 981 710 310 NO: +47 235 002 43 SE: +46 8 566
426 51

UK: +44 3333 0008 04

Pin: 71062360#

For further information, please
contact:

SAS press office, +46 8 797 2944

Michel Fischier, VP Investor
Relations, +46 70 997 0673

Advisors

Skandinaviska Enskilda Banken AB is
financial advisor to SAS, Global Coordinator
and Bookrunner in connection with
the Recapitalization Plan.

Mannheimer Swartling Advokatbyrå AB and Davis Polk
& Wardwell London LLP are
legal advisors.

Skandinaviska Enskilda Banken AB
(publ), Danske Bank A/S, Danmark, Sverige
filial and Swedbank AB (publ) have
been appointed Solicitation Agents. Danske
Bank A/S, Danmark, Sverige Filial
and Swedbank AB (publ) are Joint Bookrunners
in the Rights Issue.

This is
information that SAS AB is obliged to disclose pursuant to the EU Market
Abuse
Regulation. The information was submitted by Michel Fischier for
publication on
30 June 2020 at 08:00 a.m. CEST.

IMPORTANT INFORMATION

This press release and
the information herein is not for publication, release or
distribution, in
whole or in part, directly or indirectly, in or into the United
States,
Australia, Canada, Japan or South Africa or any other state or
jurisdiction in
which publication, release or distribution would be unlawful or
where such
action would require additional prospectuses, filings or other
measures in
addition to those required under Swedish law.

The press release is for
informational purposes only and does not constitute an
offer to sell or issue,
or the solicitation of an offer to buy or acquire, or
subscribe for, any of the
securities mentioned herein (collectively, the
“Securities”) or any other
financial instruments in SAS. Any offer in respect of
any securities in
connection with the Rights Issue will only be made through the
prospectus that
SAS expects to publish on or about 4 September 2020. The offers
under the
Recapitalization Plan are not made to, and application forms will not
be
approved from, subscribers (including shareholders), or persons acting
on
behalf of subscribers, in any jurisdiction where applications for
such
subscription would contravene applicable laws or regulations, or would
require
additional prospectuses, filings, or other measures in addition to
those
required under

Swedish law. Measures in violation of the restrictions
may constitute a breach
of relevant securities laws.

None of the Securities
have been or will be registered under the United States
Securities Act of 1933,
as amended (the “Securities Act”), or the securities
laws of any state or other
jurisdiction in the United States, and may not be
offered, pledged, sold,
delivered or otherwise transferred, directly or
indirectly, except pursuant to
an exemption from, or in a transaction not
subject to, the registration
requirements of the Securities Act and in
compliance with applicable other
securities laws. There will not be any public
offering of any of the Securities
in the United States.

In the United Kingdom, this press release is directed
only at, and communicated
only to, persons who are qualified investors within
the meaning of article 2(e)
of the Prospectus Regulation (2017/1129) who are
(i) persons who fall within the
definition of "investment professional" in
article 19(5) of the Financial
Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended (the
"Order"), or (ii) persons who fall
within article 49(2)(a) to (d) of the Order,
or (iii) persons to whom it may
otherwise be lawfully communicated (all such
persons referred to in (i), (ii)
and (iii) above together being referred to as
"Relevant Persons"). This press
release must not be acted on or relied on by
persons in the UK who are not
Relevant Persons.

This press release contains forward-looking statements that
reflect SAS’ current
view of future events as well as financial and operational
development. Words
such as “intend”, “assess”, “expect”, “may”, “plan”,
“estimate” and other
expressions involving indications or predictions regarding
future development or
trends, not based on historical facts, identify
forward-looking statements and
reflect SAS’ beliefs and expectations and
involve a number of risks,
uncertainties and assumptions which could cause
actual events and performance to
differ materially from any expected future
events or performance expressed or
implied by the forward-looking statement.
The information contained in this
press release is subject to change without
notice and, except as required by
applicable law, SAS does not assume any
responsibility or obligation to update
publicly or review any of the
forward-looking statements contained in it and nor
does it intend to. You
should not place undue reliance on forward-looking
statements, which speak only
as of the date of this press release. As a result
of these risks, uncertainties
and assumptions, you should not place undue
reliance on these forward-looking
statements as a prediction of actual future
events or
     otherwise.



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          torRelations
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          ward/Press%20r
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     ref1)
Split
approximately MSEK 1,004 to Denmark and approximately MSEK 1,002 to
Sweden in
case that no other shareholders would participate in the Rights Issue
than the
Major Shareholders and
     KAW.

[2] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRelat
          ions
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     ss%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref2)
Price has
been set based on a five day quoted average mid-price (during the
period 22-26
June 2020) for the Joint Lead Managers in the initial transaction
(Skandinaviska
Enskilda Banken AB, Danske Bank A/S, Danmark, Sverige Filial,
Nordea Bank Abp,
filial i Sverige and Swedbank AB) with a premium of 15
percentage
     points.

[3] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRe
          lations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/
     Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref3)
Price has
been set based on a five day quoted average mid-price (during the
period 22-26
June 2020) for the Joint Bookrunners in the initial transaction
(Skandinaviska
Enskilda Banken AB, Danske Bank A/S, Danmark, Sverige Filial,
Nordea Bank Abp,
filial i Sverige and Swedbank AB) with a premium of 15
percentage
     points.

[4] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRe
          lations
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     Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref4)
Existing
Hybrid Notes already accounted for as
     equity.

[5] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRe
          lations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/
     Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref5)
Based on
outstanding shares of 382,582,551 as of 30 June
     2020.

[6] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRela
          tions
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/Pr
     ess%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref6)
Split
approximately MSEK 1,004 to Denmark and approximately MSEK 1,002 to
Sweden in
case that no other shareholders than the Major Shareholders and KAW
would
participate in the Rights
     Issue.

[7] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRel
          ations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/P
     ress%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref7)
In the
event the subscription undertakings and underwriting commitments from
the Major
Shareholders and KAW would be exercised in full (i.e. that no other
shareholders
would participate in the Rights Issue) and following settlement of
the
conversion of the Bonds and Existing Hybrid Notes (as set out above),
the
shareholdings would change significantly and result in each of the
governments
of Sweden and Denmark holding 2,210,760,114 shares corresponding
to
approximately 34.3% of the total number of shares and votes. For
more
information about shareholder structure after issuance of the shares,
please
refer to “Shareholder structure following the Recapitalization
     Plan”.

[8] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRel
          ations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/P
     ress%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref8)
Split
approximately MSEK 1,004 to Denmark and approximately MSEK 1,002 to
Sweden in
case that no other shareholders than the Major Shareholders and KAW
would
participate in the Rights
     Issue.

[9] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRel
          ations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/P
     ress%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref9)
Split
865,697,716 to Denmark and 863,473,118 to Sweden in case that no
other
shareholders than the Major Shareholders and KAW would participate in the
     Rights
Issue.

[10] (https://scandinavianairlinessystem.sharepoint.com/sites/Inv
          estorRelations
-externfinansiellproduktion/Shared%20Documents/General/Project%20
          Howard/Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_f
     tnref10)
For more
information about shareholder structure after issuance of the shares,
please
refer to “Shareholder structure following the Recapitalization
     Plan”.

[11] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRe
          lations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/
          Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref11
     )
For more
information about shareholder structure after issuance of the shares,
please
refer to “Shareholder structure following the Recapitalization
     Plan”.

[12] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRe
          lations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/
          Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref12
     )
Price
has been set based on a five day quoted average mid-price (during the
period 22
-26 June 2020) for the Joint Lead Managers in the initial
transaction
(Skandinaviska Enskilda Banken AB, Danske Bank A/S, Danmark,
Sverige Filial,
Nordea Bank Abp, filial i Sverige and Swedbank AB) with a
premium of 15
percentage
     points.

[13] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorR
          elations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard
          /Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref1
     3)
For more
information about shareholder structure after issuance of the shares,
please
refer to “Shareholder structure following the Recapitalization
     Plan”.

[14] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRe
          lations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/
          Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref14
     )
Price
has been set based on a five day quoted average mid-price (during the
period 22
-26 June 2020) for the Joint Bookrunners in the initial
transaction
(Skandinaviska Enskilda Banken AB, Danske Bank A/S, Danmark,
Sverige Filial,
Nordea Bank Abp, filial i Sverige and Swedbank AB) with a
premium of 15
percentage
     points.

[15] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorR
          elations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard
          /Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref1
     5)
For more
information about shareholder structure after issuance of the shares,
please
refer to “Shareholder structure following the Recapitalization
     Plan”.

[16] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRe
          lations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/
          Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref16
     )
Including
subscription of all new common shares to be issued in the Rights Issue
and in
the Directed Issue and the maximum number of new common shares to be
issued to
the holders of Bonds and Existing Hybrid
     Notes.

[17] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRe
          lations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/
          Press%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref17
     )
Based on
outstanding shares of 382,582,551 as of 30 June
     2020.

[18] (https://scandinavianairlinessystem.sharepoint.com/sites/InvestorRel
          ations
-externfinansiellproduktion/Shared%20Documents/General/Project%20Howard/P
     ress%20r
elease/Howard%20-%20Press%20release%20(English)%20Final.DOCX#_ftnref18)
In the
event the subscription undertakings and underwriting commitments from
the Major
Shareholders and KAW would be exercised in full (i.e. that no other
shareholders
would participate in the Rights Issue) each of the governments of
Sweden and
Denmark would hold 2,210,760,114 shares corresponding to
respective
shareholdings of approximately 34.3% of the total number of shares
and votes.