SAS – disappearing soon?

IIRC SAS has been undertaking a restructuring such as this for at least the last ten years and has made little if any progress.

I always think of them as a case of death by a thousand cuts. It’s coming but there are probably still about three hundred to go before SAS finally dies.

It is heavily unionised with many very senior staff in terms of service who have terms and conditions that were generous by industry standards forty years ago.

Fares are unrealistically high for things like shorthaul C considering the product but they seem to fail to take opportunities to generate cash from offering reasonably priced ones prefering to fill Y seats and charge for service.

I certainly can’t see them selling slots at LHR as those routes are in the main profitable.

SAS is the national airline of three countries, namely Denmark, Norway and Sweden. And it’s been too slow to adapt to today’s fast-moving environment.

So the present cuts would seem a way in which its cost base can be reduced to that of Norwegian which is expanding next year on to SAS’ long-haul territory..

Some facts which were not entirely made clear or were missed out of the flightglobal.com piece were that:

* SAS will sell off Wideroe which is the largest regional airline in the Nordic region and which is profitable.
* SAS will outsource its call centres and ground handling operations. In which case I sincerely hope service standards can be maintained because SAS will become, as far as I can see, the only national airline in Europe which will employ agency staff (ie non-SAS staff) to check-in passengers at its hub airports.

Local media mentions (as stated above by LondonCity) that SAS will/plans to sell Wideroe (a profitable subsidiary), their ground handling business and Eurobonus.

The CEO has taken a 20% cut in salary. Staff may be asked for 15% pay cut and/or increased productivity. Admin functions to be centralized in Stockholm.

They emailed Eurobonus members today:

“There has been media speculation recently as to whether SAS will be selling EuroBonus. It is therefore necessary to emphasise that EuroBonus is one of SAS’s offers to its loyal customers and an integral part of our company, today and into the future. We therefore look forward to continuing to develop the programme in cooperation with our partners, for the benefit of all of our customers.”

That doesn’t quite say they are not going to sell it….

It seems that a few days back, trading in SAS was halted.

http://uk.reuters.com/article/2012/1…89T0IK20121030

As many have said on BT, the major Airlines are grouping, and these will be the ones that will survive.

IAG. LH, and AF/KLM, as groups will stand, as the asset rich and long haul Airlines of Europe, with much of the European networks taken by Easyjet, or other low cost Airlines. I think many of the days of business travel in Europe have gone. AF + KLM shares have doubled in the last 6 months.
Look at LH letting go all the European non profitable flights (apart from Munich and Frankfurt) to German Wings from January?
Will all the LH FF’s earn any miles of their European flights then?
Maybe AF/ KLM and BA will pick up much business traffic when others let it go in Europe?

The game is changing more and more.

There are many Airlines yet to go, being in an Alliance as a FF is essential and in one of the big groups programs. It is sad to see BMi, SAS, and part of LH going, but this is reality.

We often forget then eating into the market the Middle East Airlines are having, taking business from every European city and now clearly at the cost of others.
Redundancies in Ibieria, AF, LH, SAS show where the direction is. Many crews are leaving for Emirates, and Etihad, who are tying up with AfFKLM , Qantas with EK.
It is an important strategy as to where Virgin Atlantic will fall, but long enough left and they should decide pronto. I think that Skyteam will leave them the best represented and less duplicated on routes and business.
Considering Etihad have linked in with VAustralia, and bought equity, i find it difficult to see them opting elsewhere with a tie in of 10 years with AF /KLM.

Air Asiua has had a massive impact on the Asian Market as have jet star, and now even low cost but high tech planes down to Australia with FlyScoot, to have 787 dreamliners eventually. The investment matters, people want smart aircraft, comforts at a better price. Many Oceania routes are now classified Regional or Medium haul from Asia.

The game changes continue, but assets, collateral, and new planes with expanding networks are the key to success in my views. Those that are left now, are indeed left out in the cold. The Asian and Middle Eastern Airlines, are stealing the business and will quell many other European Airlines to the past yet sadly.

SAS has not gone to the wall, yet! I can confidently say this as I sit in the excellent SAS lounge at CPH. It will be a loss, if and when it does.

With legacy “national” airlines, much depends on the attitude of the national governments concerned. A way was found to keep Austrian and Swiss alive, in the LH group, and one factor was the wish of the national governments concerned to keep the name of the national airline alive. At least one other European government is trying to sell its national airline in a way that will at least preserve its name. This is in contrast to the way the Hungarian government reacted to the problems at Malév.

There are many ways in which one could picture SAS living on in a very different form.