• Sweden edition
 
SAS unveils massive cost-cutting bid

SAS unveils massive cost-cutting bid

Published: 12 Nov 2012 08:27 GMT+01:00
Updated: 12 Nov 2012 08:27 GMT+01:00

The airline announced on Monday that ground service and a Norwegian subsidiary will be sold, following a crisis meeting over the weekend.

Furthermore, 800 jobs at the airline will be slashed, according to the TT news agency, and negotiations have already begun for salary reductions.

"The Board has given its unanimous support to this plan and recommends that all of the company’s employees support it as well," SAS wrote in a statement.

The plan will result in annual savings of around 3 billion kronor and will also see some of SAS’s assets being sold for around 3 billion kronor. The company explained that this will make SAS less dependent on external lenders in the future.

"This truly is our 'final call' if there is to be a SAS in the future. We have been given this final chance to make a fresh start and to carry on these fundamental changes," Rickard Gustafson, President and CEO of SAS, said in a statement.

"I know that we are asking a lot of our employees, but there is no other way. I hope that our loyal and dedicated employees are willing to fight for the survival of SAS and for our jobs.

"If we do this, we will be able to invest in new aircraft in the long term and to further develop our operations. This will ensure that SAS will continue to play an important role for millions of people in Scandinavia in the future,” he said.

The SAS CEO told the TT news agency that most salaries will be cut by around 15 percent, while he plans to take a 20 percent pay cut.

The divestments and job cuts shave 6,000 positions from SAS payrolls. According to Gustafson, the airline will have around 9,000 employees following implementation of the savings package.

The savings plan announcement coincided with the delayed release of SAS's third quarter results, which showed the airline increased profits by nearly 300 million kronor to 568 million kronor.

Income increased by a half a billion kronor to 11.1 billion kronor.

Meanwhile, the Swedish government, which owns just over 20 percent of the airline, making it SAS's largest single shareholder, signaled on Monday is has no plans to provide additional capital to the struggling carrier.

"As a responsible owner, the government is willing to create the conditions for a limited time that will allow SAS to carry out the comprehensive changes called for by the business plan," Financial Markets Minister Peter Norman said in a statement.

Norman added however, that responsibility for implementing the changes "rests with SAS" and that agreeing to extend a loan does not entail any fresh injections of cash from the Swedish state.

In addition, the government is looking to sell its stake in the crisis-ridden airline.

"The government's ambition is to continue to look for another owner for SAS," the government said.

"The new business plan makes SAS more attractive for a potential buyer, and thus increases the possibilities for the state to reduce its ownership stake in the company."

The airline's problems have persisted in recent years and the firm has struggled to keep up with competitors. High salaries, pensions liabilities and an ageing fleet have all contributed to the company's perilous state.

The last time the firm's problems came to a head, in 2010, cabin staff backed down and accepted lower pay and conditions. A savings package carried out between 2009 and 2011 meant 4,600 jobs disappeared from the airline.

SAS shares climbed 8 percent in opening trading on the Stockholm stock exchange on Monday, climbing to a price of around seven kronor per share.

TT/The Local/og

sweden" target="_blank">Follow The Local on Twitter

Your comments about this article

10:29 November 12, 2012 by B Slick
Yes, massive cost cutting but that does NOT mean cutting the pay to the gang who sit in the SAS head office. I have flown on SAS but never booked directly with them because there pricing is not just a little more than the other airlines, there prices are SKY HIGH! So lets just let SAS go broke and stop pumping fresh blood into a dead body!
11:30 November 12, 2012 by Beavis
typical moronic response from the SAS management team- those are the guys and gals who need to be FIRED for mis-managing the airline, not letting go of the 800 useful staff. The solution to SAS's cashflow problem is so SIMPLE a 10 year old could point it out. Your short haul european lights are WAY WAY too expensive (with London route as an exception) Offer competitive (not 1980s!) pricing structre. During May to September SAS flights for example between Dublin-Stockholm for example is on average 2500kr one way, and in July it goes up to 5000kr one way! You can fly London to Sydney for that! Fix your pricing and return to profit, otherwise cease to exist!
13:57 November 12, 2012 by Migga
SAS is trying to compete on an international market with scandinavian prices, won`t work.
15:50 November 13, 2012 by mickeyonemore
Having worked at SAS technical site in Stockholm for years now on the shop floor,the amount of staff upstairs going into offices is criminal.Totally top heavy all with their pc's etc etc.The is a total shortage of Maintenance staff for the amount of aircraft operated,it's quite staggering to watch how many personal are going into work in the offices.Managers have managers to manage other managers.The whole system needs revamping seriously,as in my opinion sooner or later the will be accidents on the mechanical side due to lack of maintenance staff having to cut corners.The standard of Maintenance is high,but this problem of top heavy office staff just doesn't start and finish with Stockholm,it's down at Copenhagen and Oslo.
Today's headlines
National
Anti-Israel graffiti 'not a race crime': Court
Photo: TT

Anti-Israel graffiti 'not a race crime': Court

A teenage boy who painted anti-Israel slogans and symbols on the Concert Hall in Gothenburg has been convicted for the damages he caused, but he walked free from racial agitation charges. READ  

Politics
Israel's ambassador recalled from Sweden
Israeli ambassador Isaac Bachman. Photo: TT

Israel's ambassador recalled from Sweden

Israel has recalled its ambassador from Stockholm "in irritation" that Sweden has officially recognized the State of Palestine. READ  

Entertainment
A closer look at Sweden's rising stars
Swedish actresses Sandra Huldt and Julia Ragnarsson. Julia (right) has been nominated for a Rising Star award. Photo: TT

A closer look at Sweden's rising stars

Like to be ahead of the game when it comes to the next big thing on the silver screen? We find out more about the Swedish nominees for the Rising Star award to be presented at Stockholm's International Film Festival next week. READ  

Science
Swedish women in two-year sex pill study
Contraceptive pills have been linked to mood swings. Photo: Shutterstock

Swedish women in two-year sex pill study

Three hundred women from across Sweden are taking part in a study designed to demonstrate that modern contraceptive pills don't lead to decreased libido or mood swings. READ  

National
Stockholm 'sinking' oil spill ship safe
The ship was rescued on Thursday. Photo: Swedish Coast Guard

Stockholm 'sinking' oil spill ship safe

After fears a ship carrying around 52 tonnes of oil could sink in Stockholm's archipelago, Sweden's Coast Guard said the vessel had been towed to safety. READ  

National
Dog attack policewoman acquitted on appeal
A scene from a video of the attack published by Dagens Nyheter

Dog attack policewoman acquitted on appeal

A policewoman accused of letting her dog attack a drunk man while she repeatedly hit him with a baton, has had her conviction overturned by a court in Stockholm. READ  

Entertainment
What's On: October 31st - November 7th
Uma Thurman will soon be on her way to Stockholm. Photo: TT

What's On: October 31st - November 7th

Halloween fun and an international film festival are the big events hitting Stockholm this week. We cast our eye over the capital and the rest of the country for the best activities to check out this week. READ  

International
Pirate Bay Swede found guilty in Denmark
Gottrid Svartholm Warg. File photo: TT

Pirate Bay Swede found guilty in Denmark

Sweden's Pirate Bay Founder Gottrid Svartholm Warg was found guilty of hacking crimes in a Danish court on Thursday. READ  

National
Malmö loses out as rare toads move in
The European green toad. Photo: H. Krisp (WikiCommons)

Malmö loses out as rare toads move in

After a rare species of toad moved into southern Sweden's Malmö, builders have had to tone down massive expansion plans in the area. READ  

Politics
Palestine recognized as state by Sweden
Sweden's Foreign Minister is Margot Wallström. Photo: TT

Palestine recognized as state by Sweden

The Swedish government has officially decided to recognize Palestine, with the move announced in a speech by the country's new Foreign Minister Margot Wallström. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Lifestyle
Stockholm's shocking take on Halloween
Sport
Top ten quotes from Zlatan Ibrahimovic
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
Gallery
People-watching: October 30th
National
Sweden remains fourth best for gender equality
Blog updates

29 October

Scariest day (Blogweiser) »

"This is what’s frightening me on Halloween. http://www.youtube.com/watch?v=D4OFZVCu8J0&list=UUJu5J7jG4uoYSjWbpFsJBuQ Follow my posts on FB. ..." READ »

 

24 October

Editor’s blog, October 24th (The Local Sweden) »

"Hi readers, Get ready to read our weekly digest of Swedish news in less than 60 seconds. The..." READ »

 
 
 
National
Timeline: Julian Assange sex allegations
Sport
World Cup ski race on 'fake' Stockholm slope
Society
An Arctic tradition: hunting and handicraft
Society
Stockholm taxis offer free therapy sessions
National
The Local meets Health Minister Gabriel Wikström
Gallery
Property of the week: Österåker
Society
Homeless turtles get Stockholm police ride
National
Construction worker has 'Sweden's best beard'
National
Italian musician jazzes up Sweden's Lapland
Gallery
Zlatan's career in pictures
Finest.se
Gallery
People-watching: October 25th and 26th
Lifestyle
'Swedes are funnier than they think'
National
Swedish town 'like Venice' after heavy rains
Lifestyle
What's On in Sweden: October 24th - 31st
Gallery
People-watching: October 22nd
Gallery
In Pictures: Prince Carl Philip and Sofia Hellqvist
Lifestyle
Eight things to love about renting a Swedish apartment
National
Vasa ship cannon blasted in Sweden
National
Sub hunt: Day-by-day
National
Sub hunt: Stockholm islanders share their fears with The Local
Sponsored Article
The best options for oversea transfers
National
Dentist gives free care to Roma beggars
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
TT
Society
QUIZ: How good is your Swedish?
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
Stockholm is 'best' region for well-being
Sponsored Article
How to catch the first lobster of the year
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

970
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN