It was well reported yesterday that SAS’s future is bleak  with 6,000 jobs for the cut and a SEK3 Billion (or ~US$444 Million) costs savings plan.

More details have emerged with the Norwegian regional airline – Wideroe now on the sale block too, along with SAS Ground Handling.

SAS’s CEO Rickard Gustafson says

“We are facing a very serious situation. That is clear,”

“We have not made money in a number of years and you cannot continue to operate if you don’t make money. We need to create a new business model. We need to stand on our own two feet. That is what we need to demonstrate very rapidly.”

Other assets up for sale make sorry reading with the airline selling some its crown jewels (its some property, even some aircraft engines).

They’re also trying to save money by outsourcing more work to external suppliers including the call centres.

The elephant in the r0oom however is agreement with staff (pilots and cabin crew) with a chilling warning being given out

The company’s existence is subject to the new collective agreements being reached.

The plan calls for staff to agree to take pay cuts of up to 17%, and cabin crew pay being cut by an average of 12%.

With SAS’s board meeting again on the 18th November, it could be that time is starting to run out for this carrier unless some serious fixes are found.

SAS’s problems are exhausted by Norwegian Air Shuttle and other low cost carriers eating into its traditional markets. Norwegian is preparing to launch 787 services to Bangkok and New York with a much lower cost base as the crews will be based in Thailand.

Whilst services at the moment are unaffected, I’d be watching extremely carefully what happens next week at the meeting to see if SAS can survive – or if we’ll see the implosion of the airline and something being born out of it that is leaner and meaner…

Posted by Kevin M GhettoIFE | 5 Comments

5 Responses to “SAS in trouble: Wideroe for sale…”

  1. Mark Mercer says:

    Another hit hurting Star if these guys go under. With Tam likely leaving, Spanair ending almost a year ago, and still a chance of a US-AA merger putting ex-US in oneeorld, not a great year for *A. Despite getting Avianca-Taca & Copa.

  2. Andrew says:

    Sounds like Sabena a few years back…..they came out as Brussels Airlines….and under partial ownership of LH. Perhaps a “new” SAS will emerge as well….? Also wonder if they will still start SFO service in spring?

    • Kevincm says:

      SAS – Swedish Airline System. Has a nice ring to it….

      As to the Long Haul Additions… who knows right now. SAS could call it time next week….

  3. Frank G. says:

    Let’s hope SAS stays afloat, in some form. Best service to Scandinavia, and not much alternative exists, at least now.
    By the way, SAS stands for ‘Scandinavian Airline System’, not just Swedish; it’s also Danish and Norwegian.

    • Kevincm says:

      My little jibe of “Swedish Airline System” is what could happen if the funding is pulled and SAS has to reorganise itself quickly as a single country company ;)

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