Tuesday, June 19, 2012

SAS cuts costs

Boeing 737 in Oslo, one of the three SAS Scandinavian Airlines hubs
The Scandinavian flag carrier SAS Scandinavian Airlines want´s to to get back in the black. But  cost-cutting measures later, the airline did not reach their goal. SAS is still losing money.

The current austerity program, launched September 2011, should cut cost at three to five percent. But this will probably not reach to be profitable. In the recent years the airline sold there participations in several airlines like Estonian Air, British Midland, Spanair and other companies. This generated saving about 23 percent compared with 2008. But to reduce costs further, the airline have to change it´s structure. Nowadays SAS is run three major Hubs in Copenhagen, Oslo and Stockholm. This is very expensive, if you regard to the huge number of transfer passengers in the SAS network. New savings only can achieved, if SAS reorganize their network and business model. Beside some changes in the schedule SAS will renew it´s fleet. The last MD-80 will be retired in 2014 and also the Airbus A340-300 will probably be returned to the lessors next year, when the lease contract will end. Another measure is, that SAS will offer there passengers a better range of long-haul flights due code-sharing arrangements.

SAS is the biggest airline in Scandinavia and partly government-owned by Sweden, Norway and Denmark. In the past, the carrier always produced at high costs, but with the emerge of low-cost carriers the revenue decreased and the airline went in the red. Several trials to bring the airline back in the black failed. The airline has to feel gloomy about the future: Norwegian has just ordered several dozen of new planes and will commence their first long-haul flights shortly while several other airlines pushed into the market. A bleak future for SAS Scandinavian Airlines.

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