• 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

Don't miss...X
Left Right

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
Roma advocate scoops Wallenberg prize
Emir Selimi: The winner of the 2014 Raoul Wallenberg Prize. Photo: Charles L. Sjölander

Roma advocate scoops Wallenberg prize

A Roma man has been hailed as "inspirational" after scooping this year's Raoul Wallenberg Prize for setting up an organization to help stamp out racism against the community. READ  

Goverment keen on Nato forces in Sweden

Goverment keen on Nato forces in Sweden

Nato will soon be able to deploy military forces to Sweden with the government likely to sign an agreement with the military alliance this week, but an expert told The Local that full membership remains unlikely. READ  

Beggar hit in exhaust fume 'attack'
Exhaust fumes. Photo:Shutterstock.

Beggar hit in exhaust fume 'attack'

A beggar in southern Sweden was forced to flee in terror after she was enveloped with thick black smoke, part of an apparent attack that was captured on video and spread via social media. READ  

Elections 2014
Sweden opens the gates for election voting
Don't forget to vote. Photo:Shutterstock.

Sweden opens the gates for election voting

If you're busy on September the 14th, or simply can't wait to have your voice heard, Wednesday morning marked the opening of the polling booths for early-bird voters. READ  

Whooping cough alert after two infants die

Whooping cough alert after two infants die

The Swedish Public Health Agency has urged parents to be aware of the dangers of the infectious whooping cough disease after two babies have recently died from the illness. READ  

Chuck Berry wins 2014 Polar music prize
Chuck Berry performing in Oslo in 2007. Hakon Mosvold Larsen /Scanpix Norway

Chuck Berry wins 2014 Polar music prize

The Polar music prizes were handed out in Stockholm on Tuesday night, with Chuck Berry and theatre director Peter Sellars sharing one million kronor ($153,000) in prizes. READ  

Swedish store scraps high heels for toddlers
The shoes pictured are indeed the shoes in question. Photo: Joakim Loamotte/TT

Swedish store scraps high heels for toddlers

UPDATED: A social media storm has seen a supermarket chain recalling its heeled children's shoes. The man behind the storm says other countries could learn from how seriously Sweden takes equality. READ  

My Swedish Career
'How I came to run my own business in Sweden'
Scarlet Vikarby and her husband Jimmy. Photo: Private

'How I came to run my own business in Sweden'

American Scarlet Vikarby owns a home theatre installation business. She talks to The Local about owning a company, how being a woman can be a game changer, and how to overcome reserved Swedes. READ  

Elections 2014
Why Sweden's election oozes uncertainty
The Alliance leaders. Photo: Drago Prvulovic/TT

Why Sweden's election oozes uncertainty

Sweden's prime minister got his claws out on Tuesday, accusing the opposition of "promising everything to everyone". With the elections just weeks away, an expert tells us why the campaigning is heating up. READ  

Elderly Swede unhurt after train runs over her
A freight train in Sweden. Photo: Magnus Hjalmarson Neideman/TT

Elderly Swede unhurt after train runs over her

An elderly woman decided to take a stroll on the Swedish railway tracks on Tuesday afternoon, for no apparent reason. After being run over by a freight train the woman emerged completely unharmed. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
Princess Estelle through the years
Business & Money
Swedish city all set for six-hour workday trial
Business & Money
Five golden rules for the Swedish job hunt
Sponsored Article
Graduates: Insure your income in Sweden with AEA
Gallery
People-watching August 22-24
Blog updates

25 August

Hit och dit, här och där (The Swedish Teacher) »

" Hej igen! A common challenge for Swedish language students are the location adverbs hit/här, dit/där, hem/hemma etc. Some of the location adverbs come in two versions. We should use one type of location adverb when we use a verb describes where we are, and we should use the other type of location adverb when we the verb..." READ »

 

25 August

The Dollar Store (Blogweiser) »

"A dollar store in Sweden. Blog post: http://t.co/tNuuvcP1q0 #USD #greenbacks #sweden #sverige pic.twitter.com/RHFAYf7U1k — Joel Sherwood (@joeldsherwood) August 23, 2014 There’s a chain here in Sweden called The DollarStore. This name always stood out to me in a country where they don’t use dollars. I went there for the first time this weekend. They actually accepted greenbacks..." READ »

 
 
 
National
Armed royal guards caught (very) drunk on the job
National
Sweden orders textbook on Roma discrimination
Gallery
Violent anti-Nazi demonstrations in Malmö
Society
A closer look at Sweden's five official minority languages
Gallery
See the destruction from the southern Sweden floods
Politics
'Sweden Democrats hold the key to elections'
Society
Swedes celebrate first day of smelly fish season
Politics
Sweden elections: How do they work?
Finest.se
Gallery
People-watching August 20th
Society
Did you know the Bronx in NYC was named after a Swede?
Politics
"Iraq reminds me of the Yugoslav wars. It's the same story."
Society
Swedes slam Danes for 'racist' art
National
Majority of Swedes favour more or just as many refugees
Society
Lock your bathrooms: Swedish toilet invader on the the loose
Politics
'Assange will not leave until safe'
Sponsored Article
Find out what gives this Swedish school executive appeal
Society
Serial chicken smuggler caught at Norway border. Again.
Society
This gold coin may be the key to solving a Swedish massacre
Shutterstock
Lifestyle
The Swedish mentor (and why you may need one)
Politics
Reinfeldt calls for tolerance to refugees
Skatteverket
Sponsored Article
Introducing... ID cards and permits in Stockholm
Sponsored Article
Introducing...Your finances in Stockholm
Sponsored Article
Introducing...Housing in Stockholm
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

723
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