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FINANCIAL WOES AT SAS
No future for SAS in Europe: expert

No future for SAS in Europe: expert

Published: 19 Nov 2012 17:13 GMT+01:00
Updated: 19 Nov 2012 17:13 GMT+01:00

Despite Scandinavian airline SAS announcing on Monday that all eight unions had signed deals to save the company from bankruptcy, one analyst has predicted that the company needs to change tack if it wants to stay airborne.

“It’s like the meaning of life – it’s complicated,” airline industry consultant Anders Lidman told The Local.

“And it hasn’t even really started yet, there’s a long way to go.”

Lidman’s comments come after the announcement that all eight SAS unions signed new labour agreements with the troubled airline, a precondition for SAS to move ahead with a comprehensive cost-cutting plan touted by management as the only way to save the airline from bankruptcy.

The new union agreements include centralization of administration functions, reduction of compensation to market levels, new pension terms and outsourcing of call centers and ground handling, the airline said in a statement.

The airline’s staff members agreed to pay-cuts, longer work hours and a time-out on salary negotiations for at least two years.

Some pilots have essentially received a 30 percent pay cut, with extra hours to boot.

However, the fact that negotiations came to a close was a foregone conclusion, according to Lidman.

“If it’s a choice of a job or not I can’t say I’m surprised. It’s not so easy to get jobs these days. And it’s not as if the pilots were starving anyway,” he told The Local.

Lidman explained that since SAS lost its monopoly status following deregulation, the company has suffered to adjust to new market conditions.

He pointed to a flight between Madrid and Stockholm costing a quarter as much today as it did in the eighties, even though costs are much higher now in comparison.

“All the other airlines drew the conclusion that you can’t make money unless you’re a low-cost airline,” he said.

“But SAS has kept its traffic where it’s the worst – Europe.”

In terms of the next step for the airline, Lidman criticized SAS’s lack of a new plan, stating that changes must be made to avoid further turbulence.

“I can’t see a future for SAS if they stay in Europe. They will have to work out a plan and I can’t see a positive plan for them to move forward. They’ve not announced any change of direction and they must do this to survive.”

Meanwhile, passengers should keep an eye on developments, but have no cause for concern, according to Lidman.

“There’s no need to worry now, but passengers should be aware of the situation, and should be keeping an eye on the company,” he told The Local.

Oliver Gee

Follow Oliver on Twitter here

The Local (news@thelocal.se)

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Your comments about this article

20:59 November 19, 2012 by cogito
Please, SAS, don't kill your non-stop to Paris.
21:33 November 19, 2012 by Beavis
some "expert"... Its EASY for SAS to survive-

1 fire the ceo and senior management team- you failed miserably. (I mean fire not let go)

2 Hire any 16 year old who can calculate to replace them all

3 Match the prices of the competition or at least offer a sligtly higher price (not 20 times the price)

(500 euro one way for a shorthaul euro fare is NOT reasonable!!!)

Come out of the 80s and into 2012 or go bust you choose SAS!!
14:54 November 20, 2012 by DrMartin
SAS bankruptcy is a delight for the modern traveler; it will allow more companies to compete for the routes allowing for lower prices and better service. SAS has a monopoly and can't make a profit, which shows you the level of incompetence we would allow to survive if it doesn't go busy. Goodbye SAS, you will not be missed!
19:41 November 23, 2012 by james7
Since the Swedish and other governments own a percentage of the airline, it is up to them to take the lead to save it from bankruptcy as it would be detrimental to the airline for the governments to sell their stake.. They should demand changes that would make it more profitable and efficent. The more airlines we as consumers have to choose from, the better prices and service we will receive. If Lufthansa can survive and thrive, why can't SAS? SAS is a national treasure that has always had a reputation as one of the best airlines in the world. The Swedish government missed its chance with Volvo and Saab, don't allow SAS the same fate.
13:38 November 25, 2012 by Beavis
@james SAS has anything but a good reputation.. Its prices are the worst in Europe. Its fleet of planes are the oldest and most dangerous in Europe. (tons of MD82s that should have been retired 10 years ago) Rude old battleaxes on most fligts, piltos caught over the alchol limits, poor customer service,awful poorly thoguht flight times, etc etc
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