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Trilateralism: The Past is Prologue

Intercapitalist rivalries ebb and flow and shaped modern history more than many may realize. Recall that Nixon unilaterally severed the dollar’s last ties to gold, not because of the Soviet Union.  America’s capitalist allies in Europe demanded gold…

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Intercapitalist rivalries ebb and flow and shaped modern history more than many may realize. Recall that Nixon unilaterally severed the dollar's last ties to gold, not because of the Soviet Union.  America's capitalist allies in Europe demanded gold for their dollars, accumulating from aid, foreign direct investment, and trade. 

A couple years after the collapse of Bretton Woods, the Trilateral Commission was formed to ensure greater dialogue among the three large capitalist camps:  North America, Europe, and Japan. David Rockefeller founded the group, and among the founding members were Paul Volcker and Alan Greenspan. Although current officials cannot be members, over the years, numerous prestigious former officials have been members, and in fact, former ECB President Trichet serves as the European Chair.  

Many have suggested a US-China Cold War may be the organizing principle when thinking through recent developments and their trajectory.  We, too, have found it to be a useful construct framing recent developments. It is fine at a high level, but we suspect a more detailed view may give new meaning to Trilaterlism. Rather than a two-player game, it is complicated by a third participant: Europe.  It might not nicely fit into the intercapitalist rivalries even though some academics, like Branko Milanovic, argue that China is a capitalist country essentially because workers are paid wages, and all that implies.  

Trade patterns offer a quick but not necessarily the best way to get an idea of what could be our trilateral future.  Often, a two-color map is shown to illustrate whether the US or China is the larger trading partner.   Nicholas Hatzis, a graduate student in a seminar I led at the Gabelli School of Business at Fordham, created this map that shows where Europe is a bigger trading partner than the US or China. 

Admittedly, trade can a purely commercial transaction and not indicative of political alliances.  China is Japan and Australia's largest trading partner, for example.  A variety of Australian imports, from iron ore to wine, because of Canberra's criticism of Beijing's policies.  China's export ban on rare earth shipments to Japan a decade ago was a wake-up call. Alternative sources and processing have been developed, and inventories (e.g., Pentagon) have weakened China's near-monopoly control and takes some of the sting from Beijing's recent threats.  

Some countries' reliance on China's demand may, over time, create interests that want to change the foreign policy away from a pro-American stance.   It need not be pro-China for it to be to Beijing's advantage.  Neutrality is good enough.  The US has opposed the Nord Stream 2 pipeline that boosts Russian natural gas exports directly to Germany for nearly a decade. The same logic applies equally to Japanese and Australian reliance on China's demand.   One big difference is that while the US would like to provide more natural gas to Europe, it has no need for Australia's coal or iron ore.  

Another strategic contradiction posed by China's dominant trade position reflects a dilution of the US presence but not its high-level military commitment. The Biden administration has quickly reaffirmed that the US umbrella covers some islands, atolls, reefs, and the like that China claims.  Still, the decline of presence would suggest a decline in interests over time, and in the long-run, interests and commitment must converge.  

When the Trilateral Commission was founded, Japan was the dominant Asian economy. That is no longer true, even though Japan is the world's third-largest economy.  Since a few years after Trilateral Commission was founded, China has been committed to rapid industrialization and modernization.  Many narratives see the first phase as a gradual liberalization, even though it included the Tiananmen Square Massacre (1989). 

Since Xi became the head of the Chinese Communist Party in 2012, especially since his term limits were abolished (2018), a less liberal modernization effort has been undeniable.  If anything, the state-sector has become more powerful and dominating.  While China's economy is a centripetal force in Asia, with the Middle Kingdom at the center, its actions domestically and on the international stage are a centrifugal force, alienating potential allies. Indeed, Beijing is perceived as a bully, which gives cause to others to embrace the  US, even if reluctantly, as a counterweight in the region.  

The US presence and its ability to project its military might may complicate China's sphere, but it is not clear that Beijing has become the regional hegemon.  North Korea, India, Pakistan are nuclear powers.  Iran may still become one.  Aside from China, there are four other top 10 militaries in the world nearby; Japan, India, Pakistan, and South Korea (Global Firepower Index 2021).  Many military strategists wonder if China's People's Liberation Army could take Taiwan that former Australian Prime Minister Kenneth Rudd characterized, as an island of the Netherlands' size and Norway's terrain.

Yet, China's sheer size gives it a gravitational pull that Japan lacked.  It, and not the US, leads the largest free-trade agreement (Regional Comprehensive Economic Partnership) that includes Japan and South Korea for the first time and Australia and New Zealand.  It might not be as bold or as high of standards that the US would have insisted on, but tariffs on more than 90% of the goods will be eliminated, and there are basic rules on investment and intellectual property. 

Moves toward economic and monetary union seen the European bloc from the currency "snake" in the 1970s and the European Exchange Rate Mechanism.  Three big crises have fueled the evolution.  The unification of German unleashed destabilizing forces, ending the ERM and gave rise to the Maastricht Treaty and a common currency.  The Great Financial Crisis and the sovereign debt crisis in Europe expanded the ECB and the European Union's institutional capacity.  The pandemic has seen the EU launch common bonds to fund regional unemployment insurance and a recovery effort.  Although some quarters hailed this as a "Hamiltonian moment," the fight over whether it will be a permanent institutional addition or simply a crisis response is still to be had.  

Nevertheless, Europe seems galvanized. It has struck a free-trade agreement with Japan (which is still proving elusive for the US, who nevertheless wants to be granted the same terms as the EU).  At the very end of last year, it secured a trade agreement with the UK, which has left the EU, and a pact with China.

Europe's economic performance lags behind the US and China.  It does not appear to have much of a foothold on the commanding heights of the new economy. However, it seeks to have a substantial voice on the rules governing data privacy, the environment, and the internet giants' behavior.  Yet, its ability to enforce its will looks terribly compromised after years of underfunding defense.  Germany may send a frigate to make port calls in Japan, South Korea, and Australia.  It is expected to enter disputed waters in the South China Sea, but if it is attacked, there seems to be little doubt about who would defend it.  

The Nord Stream 2 pipeline does not make Europe more secure but instead leaves it vulnerable to Russia's goodwill. It sanctions Russia for its behavior but not in a way that rises above inconvenience and annoyance. Similarly, the EU sanctions China for actions in Hong Kong and its treatment of the Uighurs.  However, Europe appears more willing to sustain a type of political cognitive dissonance:  dislike of Russia and China's behavior but does not want to pass up commercial opportunities.   Moreover, as the chart above illustrates, China has taken stakes in numerous ports. Eastern and Central Europe disputes with Brussels are not only over the independence of the judiciary and a free press, but countries that lived under the Soviet boot want a more robust confrontation.

Even before the Trilateral Commission was launched, Germany pursued "OstPolitik," an early form of detente with the Soviet Union. A treaty was struck in which the Soviet Union renounced the use of force, and Poland accepted the Oder-Neisse line and the territorial settlement of WWII. Europe shows a preference for striking such modus vivendi, like China's investment agreement, that shifts the focus to adjudication of conflicts.  

The European Commission issues a document seeking to boost the international role of the euro.  The US sanctions on companies involved Nord Stream 2 pipeline and violations of Iran sanctions frustrate Europe and demonstrate its limited sovereignty. The common EU bond is nowhere large enough to compete with the US Treasury market for large pools of capital, including central banks and sovereign wealth funds.   The euro's share of global reserves is broadly stable, a little more than 20% of the allocated reserves. The US can deny access to the dollar funding market, and Brussels has not devised a robust workaround.  

Europe, Japan, and many others seem to simultaneously worry about too weak and too strong America.  They chafe as the US imposes its will through its unique power levers.  At the same time, they worry about too weak of America who may return to Fortress America and withdraw from the multilateral world it was instrumental in creating.  

Biden's election may represent the restoration of the US political elite's more multilateral wing, but there is no going back to 2016. Many international observers recognize the same thing as many domestic political analysts do, namely that Trump may have lost the presidency, but he remains the single most powerful Republican.  The party that occupies the White House typically loses seats in the midterm election (2022).  Given the near parity presentation in both the House and Senate, it is not inconceivable that the Republicans gain control of one or both houses.  Nor has it been lost on foreign observers that the US Senate has been singularly unable to approve a multilateral treaty for 15 years. The US President has been forced to rely on the legally weak executive orders that, as we have seen in 2017 and 2021, can be unwound quickly by the next one. 

There seems to have always been an eddy in the stream of ideas that see America in decline. It has probably supported more than a cottage industry since the first speculation against the Continental army's loans and bonds in 1776 as it waged war against one of the most powerful empires of the day.  With China's rise and its sheer scale, the US has a rival of the likes it has not seen before.  Making conservative assumptions, even with the monetary and fiscally induced growth spurt this year, the US economy is likely to be overtaken by China at market exchange rates before the end of the decade. 

To be sure, it is not merely China.  It is two decades of ineffectual foreign policy, perhaps beginning with Iraq's invasion in 2003 that destabilized the Middle East. There is the forever war in Afghanistan, confusing policy in Syria, and the disaster in Libya.  The 2018 tariffs that Trump shrouded with national security claims levied on steel, and aluminum imports from Canada, Europe, and Japan have not been lifted yet by the Biden administration.    Even during the pandemic US has not risen to the occasion.  It accounts for about 4% of the world's population and an estimated 25% of the document cases, and almost 20% of the deaths. 

The arms-control-like agreement that limited government interference in the foreign exchange market to secure trade advantage is in disrepair. The weaponization of access to the dollar erodes trust in international service/utility that the US provided.  Of course, the response to 9/11 bolstered efforts to cut off terrorist financing, and in so doing, officials discovered a high-precision weapon with broad application. 

The collateral damage may not be so apparent, but it undermines the goodwill toward the dollar brand and encourages the search for an alternative.  Hence, Mark Carney, former Governor of the Bank of Canada and the Bank of England, went to America's heartland at the Fed's Jackson Hole gathering in late 2019 and declared that the dollar was a source of instability in the world and ought to be replaced with a multinational digital reserve asset.  It seems akin to Keynes' bancor proposal at Bretton Woods.  Some argue that a token one gets for solving a difficult computer problem, and consumes as much electricity as a small country, could replace it.  

While Merkel and Macron warn against dividing the world into blocs, a crystallization new alliance that might be the parallel may be emergent even if not equivalent to NATO.  The scaffolding has been there for several years, but Beijing's continued harassment of Taiwan and its other aggressive acts in the area may provide a catalyst for the next evolution step.  The marriage of the 5-Eyes intelligence sharing (US, UK, Australia, New Zealand, and Canada) and the Quadrilateral Security Dialogue (US, Australia, Japan, and India), also known as the Quad. It is not difficult to imagine the group expanding to include South Korea, which is also the 10th largest economy, and the firepower of its military surpasses Germany. 

The three spheres, the US, Europe, and China, are simultaneously pursuing import-substitution strategies. The US and Europe found themselves heavily reliant on China for medical supplies, like PPE and medicines. This will change, but the import-substitution efforts will be broader and fall under the elastic rubric of national security.  It will include rare earths and semiconductor chips, to cite a couple of examples in the news.  Chips are ubiquitous but consider that the dollar value of China's semiconductor imports exceeds the cost of its oil imports, and it is the world's largest importer of oil.   According to the Congressional Research Service, an F-35 fighter jet has more than 900 pounds of rare earths.  A submarine may need four tons.   

It makes little sense for China to be beholden to the US duopoly of mobile operating systems.   Yet the fragmentation of the internet and the strategic threat that former US Trade Representative Barshefsky referred to in last August's op-ed piece in the Financial Times was not China but Europe.  Europe's effort to secure "digital sovereignty" was an affront to US interests and called on Europe to abandon its techno-nationalism.  On the contrary, it is poised to grow.  

The initial Trilateralist vision was to deepen the communications of the three capitalist areas that were seemingly diverging.  A little less than half a century later, three blocs appear as a useful way to frame the developments.  The two most significant changes have been the greater integration of Europe and China's rise to eclipse Japan as the dominant economy in Asia.  The center of the world economy has shifted.  It is no longer the Northern Atlantic.  Trans-Pacific trade has outstripped trans-Atlantic trade for around 40 years, though we would quickly add that China surpassed the US as Europe's biggest trading partner in 2020.  With broad strokes, we have tried to sketch out the emerging trilateral world, attentive to tensions and contradictory developments.  It is not the first or last word.  
  

 

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Disney remote jobs: the most magical WFH careers on earth?

Disney employs hundreds of thousands of employees at its theme parks and elsewhere, but the entertainment giant also offers opportunities for remote w…

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The Walt Disney Co. (DIS)  is a major entertainment and media company that operates amusement parks, produces movies and television shows, airs news and sports programs, and sells Mickey Mouse and Star Wars merchandise at its retail stores across the U.S.

While most of the jobs at the multinational entertainment conglomerate require working with people — such as at its theme parks, film-production facilities, cruise ships, or corporate offices — there are also opportunities for remote work at Disney. And while remote typically means working from home, with Disney, it could also mean working in a non-corporate office and being able to move from one location to another and conduct business outside normal working hours.

Related: Target remote jobs: What type of work and how much does it pay?

What remote jobs are available at Disney?

Many companies, including Disney, have called employees to return to the office for work in the wake of the COVID-19 pandemic, and the bulk of the company’s positions are forward-facing, meaning they involve meeting with clients and customers on a regular basis. 

Still, there are some jobs at the “most magical company on earth” that are listed as remote and don’t require frequent in-person interaction with people, including opportunities in data entry and sales.

While thousands work in forward-facing positions, such as greeting customers at Disney’s theme parks around the world, there are some positions with the Walt Disney Co. that allow work to be done remotely.

Orlando Sentinel/Getty Images

On Disney’s career website, there are limited positions available where the work is completely remote. One listing, for example, is for a “graphics interface coordinator covering sporting events.” This role involves working on nights, weekends, and holidays — times when corporate offices tend to be closed — and it may make sense for the company to hire people who can work from home or to travel and work in a location separate from the game venue.

Some of the senior roles that are shown on the website involve managers who can oversee remote teams, whether that be in sales or data. Sometimes, a supervisor overseeing staff who work outside corporate offices may be responsible for hiring freelancers who work remotely.

On the employment website Indeed, there are limited positions listed. A job listing for a manager in enterprise underwriting for a federal credit union indicates weekend duty, working outside of an 8 a.m. to 5 p.m. schedule, and being able to work in different locations. The listed annual salary range of $84,960 to $132,000, though, is well above the national annual average of around $50,000.

Internationally, Disney offers remote work in India, largely in the field of software development for its India-based streaming platform, Disney+ Hotstar.

The company also offers some hybrid schemes, which involve a mixture of in-office and remote work. For a mid-level animator position based in San Francisco, the role would involve being in the office and working from home occasionally.

How much do remote jobs at Disney pay?

Pay for remote jobs at Disney varies significantly based on location. A salary for a freelance artist in New York City, for example, may be higher than for the same job in Orlando, Florida. 

Disney lists actual salary ranges in some of its job postings. For example, the yearly pay for a California-based compensation manager who works with clients is $129,000 to $165,000.

In an online search for “remote jobs at Disney,” results range from $30 to $39 an hour, for data entry, or $28.50 to $38 an hour for social media customer support.

How can I apply for remote jobs at Disney?

You can look for remote jobs on Disney's career site, and type “remote” in the search field. Listings may also appear on career-data websites, including Indeed and Glassdoor.

How many employees does Disney have?

In 2023, Disney employed about 225,000 people globally, of which around 77% were full-time, 16% part-time, and 7% seasonal. The majority of the workers, around 167,000, were in the U.S.

Disney says that a significant number of its employees, including many of those who work at its theme parks, along with most writers, directors, actors, and production personnel, belong to unions. It’s not immediately known how many remote workers at the company, if any, are union members. 

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The Digest #194

Poor Charlie’s Almanack, Ben Graham, GAAP accounting, John Templeton, AI dystopia, Inflation, Bloomstran on Berkshire, Intuitive Surgical, The lessons…

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March 20, 2024

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Poor Charlie’s Almanack

Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger was first published in 2005 as a “coffee table” style book. It was beautifully presented but came with a high price tag. It was also heavy, somewhat unwieldy to read, and not very portable. The book’s format and price probably limited its reach. 

Stripe Press published a new edition of the book shortly after Mr. Munger died last year at the age of ninety-nine. Amazon and other vendors instantly sold all available inventory. After waiting for three months, I finally received my copy last week. 

Peter Kaufman is the editor of all editions of the book and I suspect that his main goal two decades ago was to honor Charlie Munger’s wisdom in a format that was not expected to “go viral.” In 2005, Charlie Munger was well known in the Berkshire Hathaway shareholder community and in the value investing world, but he was not as prominent as he became during his final decade. The clear purpose of the new edition is to disseminate his ideas as widely as possible. 

The new edition is abridged to reduce repetitive content and I will withhold judgment about the wisdom of this abridgment until I finish reading the book. Since the heart of the book is comprised of speeches given by Charlie Munger, there are definitely cases where the same ideas are presented again and again. 

Great books can be read many times while remaining highly relevant. I found this to be the case when I reread Charlie Munger’s Harvard School commencement address delivered in June 1986 when his youngest son was among the graduates. In the speech, Mr. Munger “inverts” the typical advice delivered in such speeches by explaining how the graduates should go about guaranteeing a life of failure and misery through time-tested strategies such as ingesting drugs and indulging in envy and resentment. 

I am not sure how many graduates were convinced by Charlie Munger on that early summer day, but I suspect that most of them remember the speech because it was so unconventional. In contrast, I have no recollection of the commencement addresses when I graduated from high school or college, or even who the speaker was.

Articles

A Memorial for Charlie Munger by John Harvey Taylor, March 12, 2024. This is a brief account of a recent memorial service for Charlie Munger at Harvard-Westlake School. “We learned Sunday that someone once asked if he knew how to play the piano. ‘I don’t know,’ he said. ‘I’ve never tried.’ Yet he tried and finished so much in his century. Imagine what he is making of eternity.” (Episcopal Diocese of Los Angeles)

Benjamin Graham: Big Moments on the Way to Big Earnings, March 2024. Ben Graham’s granddaughter reflects on the challenges Graham experienced when he applied for college. “Most graduating seniors make their college plans in advance, but Ben Graham had no money for tuition. All through the long days of arduous farm labor, my grandfather dreamed of winning a Pulitzer Scholarship.” (Beyond Ben Graham)

Graham’s “Unpopular Large Caps” Part 2: Thoughts on Diversification by John Huber, March 19, 2024. “I would segment these ideas into two groups: core operating investments and bargain assets. In the former, you want to be very selective in picking a relatively small number of companies you intend to own for the long term. In the latter, you’d want to think like the insurance underwriter, buying as many as you can to ensure that the law of large numbers is on your side.” (Base Hit Investing)

Warren Buffett Minds the GAAP by Donald E. Graham, March 13, 2024. “I have a challenge for the FASB and the SEC: If you believe today’s accounting rules present a clearer picture of Berkshire’s results, put it to a test. Ask Berkshire’s shareholders if they prefer the present method of reporting earnings over the status quo ante. I don’t believe a single informed shareholder would say so. The rule is confusing and uninformative.” (WSJ)

  • Berkshire Hathaway’s Distorted Quarterly Results, August 7, 2022. “Berkshire’s net income figure has been totally useless for analytical purposes since 2018. This is true on an annual basis and even more true on a quarterly basis.” (The Rational Walk)

Sir John Templeton: The Gentleman Bargain Hunter by Kingswell, March 12, 2024. “Templeton, who passed away in 2008, arrived on the investing scene with a series of uber-profitable contrarian bets in the early days of World War II — and continued to outwit Mr. Market with maddening consistency for the next several decades.” (Kingswell)

They Praised AI at SXSW—and the Audience Started Booing by Ted Gioia, March 19, 2024. Many recent innovations seem to have a dystopian aura. Apparently, this sentiment is not restricted to the usual luddites (old men shouting at clouds) but is shared by some of the attendees of SXSW. What seems cool to tech bros in Silicon Valley might not seem so cool to those outside tech culture. (The Honest Broker)

We Still Don’t Believe How Much Things Cost by Rachel Wolfe and Rachel Louise Ensign, March 12, 2024. People tend to focus on the aggregate amount of inflation over the past few years and interpreted transitory to mean that price spikes would reverse. Of course, politicians and economists only meant that the rate of inflation would decrease, not that prices would ever return to pre-pandemic levels. (WSJ)

My 2023 Apple Report Card by John Gruber, March 18, 2024. A solid report card overall from a widely read technology blog. (Daring Fireball)

Podcasts

Christopher Bloomstran on Buffett, Berkshire, Munger, and China, March 19, 2024. 1 hour, 1 minute. Video. Also be sure to check out the latest Semper Augustus client letter which has a lengthy section on Berkshire Hathaway. (Value After Hours)

Renaissance Technologies, March 18, 2024. 3 hours, 10 minutes. Notes. “Renaissance Technologies is the best performing investment firm of all time. And yet no one at RenTec would consider themselves an ‘investor’, at least in any traditional sense of the word. It’d rather be more accurate to call them scientists — scientists who’ve discovered a system of math, computers and artificial intelligence that has evolved into the greatest money making machine the world has ever seen.” (Acquired)

Intuitive Surgical: Robotic Precision, March 20, 2024. 1 hour, 6 minutes. Transcript. “Intuitive creates robotic products to assist minimally invasive surgeries. Its Da Vinci system is a pioneer in this area as it increases the efficiency & accuracy of surgery and reduces the burden on the surgeons themselves.” (Business Breakdowns)

The Lessons of History (Will & Ariel Durant), March 18, 2023. 53 minutes. Notes. “In every age men have been dishonest and governments have been corrupt.” (Founders)

A Classicist Believes that Homer Directly Dictated the Iliad, and Was Also an Excellent Horseman, March 14, 2024. 53 minutes. “The Iliad is the world’s greatest epic poem—heroic battle and divine fate set against the Trojan War. Its beauty and profound bleakness are intensely moving, but great questions remain: Where, how, and when was it composed and why does it endure?” (History Unplugged)

Triumph of Achilles

Triumph of Achilles by Franz von Matsch, 1892 (public domain)

Copyright, Disclosures, and Privacy Information

Nothing in this article constitutes investment advice and all content is subject to the copyright and disclaimer policy of The Rational Walk LLC.  The Rational Walk is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

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Major airline learns its Chapter 11 bankruptcy fate

The airline industry has suffered since the covid pandemic changed how and when people travel.

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March 20, 2024

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The covid pandemic dealt multiple blows to the airline industry. The first hit was simply that air travel largely went away for over a year, and international travel was hit even harder.

Airlines were barely flying and the planes that did take off had very few passengers. That did not mean that expenses stopped. Airlines still had to pay their employees and keep their fleet in working order.

Popular clothing retailer shuts down all its stores unexpectedly

Related: Popular clothing retailer shuts down all its stores unexpectedly

Basically, it was a period where a lot of money went out, but very little came in. That led to many airlines increasing their debt load at high interest rates while they put off every possible expense.

The second hit came when the impact of the pandemic gradually receded. People had learned that some travel that once seemed essential maybe wasn't.

A lot of companies cut back on business travel while international routes were slower to come back in any way. Losing business travelers who often paid for seats in Business or First Class robbed airlines — companies that desperately needed cash — of some of their best customers.

It's not that people no longer fly, but some in-person trips have become Zoom meetings, and many companies have cut back on trade shows, in-person meetings, and other events.

That situation has hit some airlines harder than others. It pushed one leading global airline into bankruptcy and the company has just learned whether U.S. courts have successfully approved its Chapter 11 filing.

Air travel has returned to pre-pandemic levels, but demand has shifted.

Image source: Shutterstock

SAS shared its Chapter 11 bankruptcy process

While many Americans don't know Scandinavian Airline SAS, it's a major global carrier. The company shared its mission on its website.

"Aviation is a vital part of Scandinavian infrastructure. We maintain the highest frequency of departures to and from Scandinavia and connect smaller regional airports with larger hubs. As part of Star Alliance, we fly our customers to 1300 destinations worldwide."

SAS does fly to a number of U.S. destinations, and its Chapter 11 bankruptcy was filed in an American court.

"The chapter 11 process is a legal process conducted under the supervision of the U.S. federal court system, which many large international airlines based outside of the U.S. have successfully used over the years to reduce their costs and complete financial restructurings," the company shared on its website.

It has been a long bankruptcy process as SAS first filed in July of 2022. The company has tried to reassure passengers and potential passengers that it had the money needed to keep operating.

"SAS’ operations and flight schedule are unaffected by the chapter 11 filing, and SAS will continue to serve its customers as normal. Importantly, we expect to have sufficient liquidity to support our business and meet our obligations going forward. SAS has obtained $700 million in Debtor-in-Possession (DIP) financing which provides SAS with a strong financial position to fund our operations throughout our restructuring process in the U.S.," the airline added.

SAS gets a Chapter 11 answer

SAS has received approval from U.S. Bankruptcy Judge Michael Wiles of the New York Bankruptcy Court to move forward with a plan that gives it $1.2 billion in new funding from a group that included the Danish government. 

"The winning bidder consortium consists of Castlelake, L.P., onbehalf of certain funds or affiliates, Air France-KLM S.A., and Lind Invest ApS, together with the Danish state," the airline shared on its website.

Junior creditors will receive a mix of credit and equity, totaling $350 million. SAS did not share how much of what the company originally owed was not repaid.

“The investment agreement that was approved by the court today is a key milestone in our SAS Forward plan, and it shows that our new investors believe in SAS and our potential to remain at the forefront of the airline industry for years to come" CEO Anko van der Werff shared.

"The restructuring will result in the cancellation of SAS equity, with no payments to existing shareholders," Reuters reported.

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