The fall of the dominoes

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Viewing 13 posts - 241 through 253 (of 253 total)

  • Tom Otley
    Keymaster

    transtraxman
    Participant

    Maybe this thread should be reopened with the news about SAS.
    “SAS on the verge of bankruptcy, according to some analysts”. (Aviation24.be 16-02-22)

    SAS on the verge of bankruptcy, according to some analysts

    The airline was famously promoted as the carrier of Denmark, Sweden and Norway. Each government subsequently sold down its shareholding. That means that the airline is now basically supported by the Danish and Swedish governments in a minority shareholding (about 14% each I believe). While the Norway government reduced its shareholding further (to about 1.5% I believe), since one way or another it was supporting Norwegian Air Shuttle with its global ambitions – and we know what happened to that airline – now trying to rebuild itself.


    cwoodward
    Participant

    I don’t see the governments involved allowing SAS to go bankrupt.


    esselle
    Participant

    I don’t see the governments involved allowing SAS to go bankrupt.

    Agreed.

    They seem to have a cycle. Lots of talk of collapse. Restructure. Life goes on.


    transtraxman
    Participant

    I tend to agree with C Woodward and Esselle. Too much is at stake in regard to company and national prestige. Plus there is a plethora of subsidised flights which somebody has to fly. To break the labour contracts might well mean an outrageous expense.

    However, there does come a breaking point which is the straw which breaks the back. We all have it and SAS is no exception.That is why the Norwegian government sold down its shareholding to a single digit level.To square the circle they put their money (just some) and support (a lot) into promoting Norwegian Air Shuttle.This airline has been a disaster because of excessivw ambition and lack of funds. They even made the airline continue running despite effectively having run out of funds over the Christmas period.The share capiutal was reduced to nothing and they “bullied(?)” one of Norway¨s famous billionaires to bankroll the enterprise.Even now their ambitions are curtailed.

    So what would happen to the rest of SAS? It could follow the same route as Norwegian. It could put its hopes into Flyr and Norse Atlantic. They however, would want to operate on their own terms. Other long term Scandinavian operators could step in to operate the local routes with some mid-haul European ones. Wideroe, BRA Brattherns Regional, for lower cost flights, Air Baltic for mid-haul flights to Europe, as Nordica, Finnair plans on offering long-haul flights from Stockholm and maybe elsewhere, Sun-air of Billund – a BA franchisee – could fly Denmark and Western Sweden on short and mid-haul flights. Others might well step in, such as Eurowings, LOT for long-haul. If need be there are airlines willing to step in.

    What the Scandinavian governments will do, is a different matter.They will not want a loss of Scandinavian identity so will use Scandinavian vehicles of one sort or anothe. Will there be a clear out? possibly. No indications of intent have been given as yet. The old solution of shovelling cash into the bottomless pit is no longer an option . Brussels will ensure that. But can SAS be resurrected? Alitalia was after all.

    1 user thanked author for this post.

    Cedric_Statherby
    Participant

    Thank you @Transtaxman, a very interesting post.

    The EU’s rules on state support are paper tigers, and when faced with the alternative – bankruptcy and full disappearance of a major company (especially a “national champion”) a way round is nearly always found. As well as the Alitalia/ITA saga, there is the SABENA/SN Brussels/Brussels Airlines example as a precedent, not to mention SwissAir’s reincarnation for an example just outside the EU.

    The idea of national flag carriers is an extremely resilient one. Except for a few isolated countries like perhaps Iceland or Mauritius, for whom one can just about argue the case that having an airline they can control is a genuine way to ensure they are not abandoned and left without air connections completely, there is little logic in it in the 21st century, and one would have thought even less for the member states of the EU where commerce is meant to ignore the borders between member states. After all the US doesn’t see the need for a flag carrier any more, if indeed it ever did, whatever status PanAm tried to claim for itself. But the idea of flag carriers persists nevertheless, and I cannot see Denmark or Sweden letting SAS just disappear.

    At any rate I hope not as, courtesy of cancelled flights due to the 2020 lockdowns, I have rather a lot of credit vouchers from them!!


    AMcWhirter
    Participant

    What the Scandinavian governments will do, is a different matter.

    SAS is a national airline of several nations rather like Gulf Air was before Emirates was founded in 1985.

    However the difference here is that the Gulf states have deep pockets (and a perfect sixth-freedom location) to fund their global carriers.

    (By “deep pockets” note that Oman Air paid Kenya Airways US$75 million for a single LHR slot a few years ago !)

    Scandinavia does not have that advantage. It’s good for transfer traffic from Europe to the Far East * but crucially it cannot tap those voluminous markets between East and West, North and South.

    (* Even here Norwegian failed to operate a single flight to Japan/S Korea/Hong Hong because it wasn’t able to obtain Russian overflying rights (perhaps because it found the Royalties too costly)


    Cedric_Statherby
    Participant

    SAS

    A Swedish colleague tells me that “this time it is different” and the Swedes at least are looking to pull the plug rather than invest more – the talk in Stockholm is that “Norway was right and we don’t want to be the last one supporting the airline”.

    Does anyone have any more authoritative news?


    cwoodward
    Participant

    It is not looking good for the airline with the share price declining by 40.6 over the past 12 months and continuing to fall daily.
    However perhaps too important to be allowed to fail. A case of ‘White Knight needed perhaps.


    transtraxman
    Participant

    A case of ‘White Knight needed perhaps.

    ….wielding a big sharp white axe.

    1 user thanked author for this post.

    esselle
    Participant

    It is not looking good for the airline with the share price declining by 40.6 over the past 12 months and continuing to fall daily.
    However perhaps too important to be allowed to fail. A case of ‘White Knight needed perhaps.

    Lufthansa?

    1 user thanked author for this post.

    AMcWhirter
    Participant

    In fact Lufthansa is already present at Stockholm with Eurowings as we reported in September 2021.

    Eurowings plans significant expansion

    1 user thanked author for this post.

    cwoodward
    Participant

    This from the Hong Kong Standard NP
    ‘An Irish company last Friday (Mar 4) filed a petition to the High Court, asking it to wind up Hong Kong Airlines. The hearing has been scheduled on May 11.

    According to the Judiciary’s website, the petition was filed by Stellar Aircraft Holding 1 Ltd, a company based on Dublin, and listed Hong Kong Airlines Ltd as the respondent on the writ.

    In June last year, Hong Kong Airlines has already fired 700 workers. The company also shuttered its subsidiary Hong Kong Aviation Ground Services Ltd (HAGSL) a month later.’

    HKA is a loss making subsidiary of the failing Chinese HNA group. It was established in 2006 and has always been loss making, has shuttered most of its routes and relinquished most of its aircraft. It is said to have substantial debts particularly to aircraft leasing companies and has been sued for non payment of landing charges and fuel.

    Its decline looks to me to be probably terminal.

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