• Sweden's news in English
 

SAS unveils massive cost-cutting bid

Published: 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
Spotify chief unveils Sweden innovation bash

Spotify chief unveils Sweden innovation bash

Spotify founder Daniel Ek and Avicii's manager Ash Pournouri are set to launch a major new tech and music event to reflect Stockholm's status as a lucrative hive of start-up activity, Billboard reports. READ  

The Local List
The ultimate guide to Sweden's party leaders
The outgoing leader of Sweden's Christian Democrats, Göran Hägglund, with the new leader, Ebba Busch Thor. Photo: Pontus Lundahl/TT

The ultimate guide to Sweden's party leaders

Two are pregnant, four are under 40 and nearly half are women. As the Christian Democrats elected their first female party head on Saturday, The Local's beginners' guide to Swedish political leaders reveals who has clung on to power and whose heads have rolled in the months since Sweden's general election in September 2014. READ  

Sweden Democrats boot seven in extremism row
From left, Sweden Democrat youth leaders Gustav Kasselstrand and William Hahne on Monday. Photo: Anders Wiklund/TT

Sweden Democrats boot seven in extremism row

Seven people have been expelled from the Sweden Democrats - including the two heads of the nationalist party's youth wing - in a row over far-right extremism, the party announced on Monday afternoon. READ  

Swedish arms giant one of Europe's 'cleanest'
An Air Force pilot uses a simulator to fly a Saab Gripen fighter aircraft at the LAAD Defense and Security International Exhibition in Rio de Janeiro, Brazil, Tuesday, April 14th 2015. Photo: AP/TT

Swedish arms giant one of Europe's 'cleanest'

Swedish defence giant Saab does more than most other European arms companies to tackle corruption but should give staff better access to whistleblowing channels, according to a Transparency International report released on Monday. READ  

Taxman: Cosmetic surgery is not deductible
Winners of the Miss Plastic Hungary beauty pageant. If they lived in Sweden they would not be able to make deductions for breast implants, nose jobs or face lifts. Photo: AP/TT

Taxman: Cosmetic surgery is not deductible

With next Monday the deadline for filing tax returns, Swedes will try to get the taxman to cover the cost of everything from milk to plastic surgery, explains a tax agency worker who has seen it all. READ  

My Swedish Career
Building my Swedish lego dream brick by brick
James Gill in his lego shop. Photo: The Local/Bobbie Carlson

Building my Swedish lego dream brick by brick

James Gill was working as a chef in the UK when he one day decided to combine his two passions in life: Sweden and Lego. The Local's reporter Bobbie Carlson visited his shop in Stockholm - and discovered that there is far more to the famous children's toy than meets the eye. READ  

Head rolls in Sweden’s private jets scandal
Anders Nyrén attends SCA's annual general meeting in Stockholm on April 15th 2015. Photo: Anders Wiklund/TT.

Head rolls in Sweden’s private jets scandal

A major corporate scandal involving the “excessive” use of private jets claimed a fresh victim on Monday as the main owners of investment giant Industrivärden blocked the under-fire CEO Anders Nyrén from taking over as chairman. READ  

US rap mogul Jay Z defends Tidal venture
Jay Z's got 99 problems but Tidal ain't one. Photo: Chris Pizzello/Invision/AP

US rap mogul Jay Z defends Tidal venture

Rapper Jay Z has defended his Tidal streaming service as viable and a boon to artists after a much-criticized start to the revamped company has given its main Swedish rivals at Spotify little cause for concern. READ  

Nepal earthquake
Swedes join earthquake rescue efforts in Nepal
Residents rescue items from the debris of a house damaged in Saturday's earthquake in Nepal. Photo: AP Photo/Bernat Armangue

Swedes join earthquake rescue efforts in Nepal

An expert team from Sweden is set to travel to Nepal on Monday to help with a search and rescue operation following a devastating earthquake which is believed to have claimed 3,200 lives so far. READ  

Rush-hour chaos for Swedish rail commuters
It's not the first time train delays cause headaches for Swedish commuters. Photo: Tomas Oneborg/SvD/TT

Rush-hour chaos for Swedish rail commuters

A faulty railway switch in Stockholm was expected to cause rush-hour headaches for travellers across Sweden on Monday morning after several trains were cancelled and others diverted. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
IN PICTURES: Sweden's Princess Leonore meets Pope Francis
VIDEO: How did these Swedish cops become New York heroes?
Business & Money
Five crucial things you need to know before you move to Sweden
Gallery
People-watching: April 25th
National
What's on in Sweden: April 23rd - 30th
Blog updates

24 April

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

"Hi readers, Spring has well and truly arrived, as evidenced by the start of strawberry season. The..." READ »

 

15 April

Gång, timme, tid & dags (The Swedish Teacher) »

"Hej! In this article I will talk about “gång”, “timmar”, “dags” and “tid”, because they all translate..." READ »

 
 
 
Stockholm School of Economics
Sponsored Article
How the Stockholm School of Economics changes expat lives
National
Brits in Sweden face NHS black hole
Swedish Hasbeens
Sponsored Article
Is the world wrong to connect Sweden with sex?
Business & Money
The Swedish regions where you're least likely to stay jobless
Gallery
People-watching: April 22nd
Sport
Sweden's Eriksson joins row over foreign England player quotas
National
MEP says ignoring migrant crisis like 'Sweden's Holocaust appeasement'
Gallery
IN PICTURES: The Swedish mining town that's being moved
National
How much would you pay for first Swedish strawberries of 2015?
Gallery
Property of the week: Kungsholmen, Stockholm
Sponsored Article
Want to study in Sweden? Read why Stockholm is the best choice
Photo: TT
National
Get set for a sunny week in Sweden
Sponsored Article
Does far-north Sweden have to punch above its weight?
National
Refugees in Sweden fear for families lost at sea
National
Syria claims ‘most dangerous’ Isis leaders are Scandinavian
Gallery
People-watching: April 18th
National
Swedish researchers pore over link between coffee and cancer
Features
What you can buy in Sweden for the price of a London shed
National
What's on in Sweden this week
National
Swedes launch first donut into space
Politics
Is Sweden returning to 1990s social democratic welfare politics?
National
Mamma Mia! Abba entertainment venue set to open in Stockholm
Gallery
People-watching: April 15th
National
Why Sweden is top place in the world for expats to raise children
National
Swedish 'submarine' was civilian boat
National
Why has a US town got pulled into a Swedish spelling row?
Gallery
Property of the week: Hovås, Gothenburg
National
What does Zlatan think of his ban?
National
Swedish teenagers help rebuild Breivik massacre island
National
Would you live in a steel box?
National
How an act of kindness by one Syrian immigrant went viral
Gallery
People-watching: April 8th
National
Swedish bids for Billboard fame
National
Swedish monkeys denied Saudi visas
National
Sunny spring weather predicted
Sponsored Article
'Impossible' to run Skanska without Bromma Airport
National
Half of Swedes want begging ban
Gallery
Property of the week: Gotland
National
Why are expats less likely to settle down with Swedes?
Sport
What does Sweden think of Zlatan's recent outburst?
Society
Get to grips with Sweden's most bizarre Easter traditions
Gallery
People-watching: April 1st
National
The Local's best April Fools' gags
Sponsored Article
'Sweden must embrace openness and diversity'
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

3,330
jobs available
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:
psdmedia.se
?>