Business & Money

SAS cuts 650 jobs

Published: 9 Feb 10 08:18 CET
Online: http://www.thelocal.se/24874/20100209/

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Troubled Scandinavian airline SAS has announced a new share issue to raise 5 billion kronor ($674 million) as well as a programme of cuts and savings designed to save a further 2 billion kronor.

The new rights issue is supported by the airline's major owners, SAS confirmed in its annual report statement on Tuesday.

The new round of cuts means that the Core SAS savings programme will lead to a total cost reduction of 7.3 billion kronor and will include the loss of a further 650 jobs within the concern across Scandinavia.

"This will mainly affect administration," according to Bertil Ternert at SAS.

The previously advertised programme of savings affected 3,000 staff.

SAS also states that it has reached an agreement with unions representing pilots and cabin staff, which includes "clearly stated goals" over savings of a further 500 million kronor.

SAS confirms that it has reached an agreement with banks to improve the airline's credit conditions. The firm has begun negotiations to secure the refinancing or delay of deadlines for the majority of the bonds which fall due during 2010.

The new rights issue, aside from having secured the support of major shareholders, is also backed by a consortium of banks. The conditions for the right issue will be made public on April 6th. The issue requires the approval of an extraordinary board meeting planned for April 7th.

SAS reported a pre-tax loss of 1.52 billion kronor for the final quarter of 2009. This can be compared with losses of 360 million in the corresponding period of 2008.

Turnover in the period amounted to 10.32 billion kronor in comparison to 12.82 billion in 2008.

Analysts had forecast a loss of 506 million kronor and a turnover of 10.26 billion, according to a Reuters poll.

The Swedish state and the other main shareholders have backed the rights issue on the condition that negotiations with staff are concluded and that the bonds are refinanced.

"When the firm, staff, creditors and owners all pull together then SAS can be a competitive company," Enterprise Minister Maud Olofsson said in a statement.

"We have analyzed and valued the measures which the management has proposed. Our judgement is that the plan is a prerequisite to creating a competitive SAS and giving the Swedish taxpayer a competitive return on invested capital."

After the completion of the rights issue, the Swedish state will retain its stake of 21.4 percent - requiring an investment of some 1.07 billion kronor on the part of the state.

"When these cost cuts have been completed then SAS will be able to compete against the toughest competition, which is an asset for industry and jobs in Sweden," Maud Olofsson said.

SAS passenger numbers declined in January by 5.1 percent in comparison with the same month in 2009. The so-called cabin factor, which indicates how full the planes are, climbed 4.9 percentage points to 65.6 percent.

TT/The Local (news@thelocal.se/08 656 6518)

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#1
10:44 February 9, 2010 by Beavis
SAS is still refusing to takle its biggest problem, pricing structure. Jobs will continue to be lost and losses will continue to increase until this is done. They also need to get a new management team in as the current are out of touch with reality. The reality is people are not willing to pay 2000-4000kr one way for a short haul european flight. Also why do so many seats have to be reserved for "economy extra" I have often travelled on an otherwise full plane, with 1 seat taken out of 16 for "economy extra" If its not booked, then why not sell it as an economy seat. No matter how much ta payers money is wasted on this, its still goign to be badly run with the current management team who are still living in the 80s.
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#2
11:06 February 9, 2010 by Twiceshy
Crappy service, no meals, high prices.

In other words, low cost service for high price. F off...
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#3
11:07 February 9, 2010 by peropaco
Indeed Beavis, I agree with you. I travel twice a month back and from to Paris and I very seldom manage to get a good deal on SAS. Also, their stupid idea to sell sandwich and drinks is not paying off either. In short, unless something drastic happens, I will continue to travel with Airfrance.
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#4
11:09 February 9, 2010 by summo
Agree with the above, their sibling carrier Cimber/sterling has gone from being a decent service with food and drinks, to something nearer Ryan Air, but still at often premier prices. 3 out of 4 of my last flights with them have been delayed, some out of their control another time the crew were late into work and the ground team had no problem in telling in the passengers, to make sure that they did not get the blame.
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#5
11:26 February 9, 2010 by cogito
Recent round trip to Paris with Air France, I paid 2,373 sek. AF served a (good) three course lunch, with wine.

SAS on same dates wanted 5,967 sek. And they even charge you for drinking water.

Moreover, SAS has a one of the worst online websites.
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#6
11:29 February 9, 2010 by karex
I travel frequently. It seems to me that to maximize profits the airlines should look deeply into how the cabin is organized.

Ditch first and business classes. Many companies don't allow their employees to fly BC anymore anyway. Make all flights 6 hours or longer duration (i.e. to another continent) 100% Economy plus, which is basically an economy seat with the ability to lift your legs a bit and therefore run less risk of blood circulation problems.

Make all flights less than 6 hours (inside Europe) 100% Economy, and reduce the prices.

Bottom line nowadays, those that can afford first class and business could probably afford to charter their own flight.
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#7
11:32 February 9, 2010 by just a question
Sell SAS to the norwegians and stop with this nonsense. Maybe they can teach you how to run an airline (like Norwegian airlines, good service, low prices)
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#8
11:32 February 9, 2010 by stoffer
I can not complain about SAS. They are still cheaper than Lufthansa. The savings, as compared to Lufthansa, offset the fact that they do not serve meals. However, from PR point of view, it would probably be better to serve even a simple cheap sandwich.

There is one good thing about SAS - punctuality and customer care. Low cost airlines do not provide that and that is what makes them low cost. When I was flying with Ryanair and WizzAir the delays were at least one hour. If you have a connecting flight - never ever choose Wizzair or Ryanair.

When we are at connecting flights - I had happened to me only once, when SAS flight was delayed, it couldn't make it before the departure of the next flight, but they provided a convenient rebooking. Do not count on that when flying Ryanair or Wizzair.

All in all, I think that SAS is asking fair prices for fair services.
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#9
11:40 February 9, 2010 by summo
stoffer, do you work for SAS's PR dept.?

SAS - Punctual? hardly.

Customer Services - It can be a nightmare to change details and the like, the staff on routes do what they can, but the saying you can't polish a turd springs to mind.

Cheap and good value, compared to who? BA perhaps although there is little in it at times.
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#10
12:00 February 9, 2010 by davo339
I have flown SAS, Lufthansa, Aircanada and Iceland air. SAS by far being the worst. Crap cabin interior bad service and very very cramped.

Lufthansa and Aircanada were the best service wise, except Aircanada domestic is pretty bad but if you do long distance as i often do its great.
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#11
12:30 February 9, 2010 by senthil v
Its really cheap if you can book your tickets like two months in advance, otherwise its not worth the price like everyone says. They need to change the way they operate.

The website is horrible. It gives weird error messages and when you want to change the dates and search again ,it cannot remember the destination.
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#12
12:33 February 9, 2010 by Alex Coman
They need a new management team.

I m sure they throw out good workers and want to keep in place the same management team ...
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#13
12:46 February 9, 2010 by peropaco
Yep, if SAS want to stay afloat, they need to change their management and the way they do business. No wonder many frequent SAS customers are now switching to Ryanair. The service is pretty much the same (none); but at least with Ryanair you have the chance to win a €40.000 car. LOL
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#14
12:57 February 9, 2010 by Callidus
As a frequent flyer, travelling across Europe and to the US/East Asia, I find SAS a reasonable choice: if booked in advance is rather cheap, the service is overall very good both on the ground and during the flight. They also run a generous frequent flyer programme that thanks to the Star Alliance gives you points wherever you fly in the world. The problem they are facing is more due to bad strategic choice in the past than the actual price ticket and/or the lack of free meals/drinks (but come on guys: do you really need to eat during a 2 hours flight??): the very expensive and highly disputable choice of Copenhagen as the main hub, the ridicously costly negotation with the danish employees, the acquisition of a battered spanish air company. Yes, many management erros, but there's hope for Scandinavian as the cabin factor as gone up quite a lot (but still not high enough). Keep it up SAS!
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#15
13:06 February 9, 2010 by V8farty
One word for SAS - Rubbish!

Bad service, rude staff, TWICE they have failed with an internal connection service and given a poor excuse. (+500kr compensation - Big Deal!)

I now fly Ryanair. On time, clean, young energetic staff, and above all cheap. With 3 kids, SAS don't even come close.

Sell it off.
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#16
13:35 February 9, 2010 by Twiceshy
stoffer what are you smoking? Low-cost airlines are the most punctual, that's the only way they can make a profit, by constantly keeping their planes flying and making short stops.

You do have a point that low-cost airlines suck for connecting flights, as they don't guarantee your connection. But that's not the same as not being punctual.
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#17
13:41 February 9, 2010 by Beavis
stoffer and Callidus were you frequent flyers in the 80s?!

Rubbish website, awful prices. Oldest fleet in Europe.

They have "online" checkin.. but when you print the boarding pass it defaults to the wrong size (due to a badly written script) so its not accepted when you go to security. When it used to work, they used to change your seat without asking you anyway.

Have flown SAS 14 times in the past 8 months. Checked lugage in 4 times, lugguage lost 4 times. Every single flight was late except one. Even booking 2 months in advance anytime afer April the prices are insane. At least in the 80s you got some free food (SAS are living in the 80s, their planes, their staff, their prices)

Find the cabin staff very snotty and unfriendly on most flights.

Without state aid this company would have gone bust a long time ago.

I really do wish they would stop laying people off as a solution to their problems. The only people that need to be laid off are their useless management (a 12 year old would do a better job) Your probelm is price SAS, you CANNOT offer a "no frills" service and ask people to pay high cost. Thankfully on many routes there is competition now, so no one has to fly with this terrible airline.
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#18
14:05 February 9, 2010 by tapaninyc
Second everything Beavis said. I live in Stockholm, fly frequently the Newark, but haven't flied SAS since 2004. I rather spend six more hours and fly via Frankfurt, just as long as I wonät need to put up with SAS.

On my last leg on a return flight, my Lufthansa flight from Frankfurt to Stockholm was flown by SAS. It was one of the worst flights I have been to. I do not mind them not serviing meals on a three hour flight - I just want to lay back and get to where I am going. BUT what really annoys me is the purser going on and on and on with the speaker system with her shrill voice, about every single thing that can be purchased. And the clueless staff who simply do not know what to do when someone wishes to pay their ¤4 cup of coffee with dollars.

Especially contrasted with the pleasant and comfortable Lufthansa flight with competent crew, the SAS leg was a joke.

Just need to remember to make my Lufthansa is actually flown by Lufthansa in the future. SAS, nej tack!
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#19
14:28 February 9, 2010 by texasgubbar
I prefer KLM between the states and Europe. The SAS international waiting area in Kastrup is awful (unless its changed in the last year).
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#20
14:29 February 9, 2010 by Rick Methven
I flew SAS to Moscow and Aeroflot bac

Aeroflot was 10 times better than SAS

Now that says a lot about SAS!
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#21
14:39 February 9, 2010 by tapaninyc
My really bad juxtaposition of unrelated newsitems:

If SAS were a kid brought to Astrid Lindgen Hospital for Children, the doctors would put it out of it's misery. Pumping in five more billion krona is comparable to a respirator that just 'prolongs SAS suffering'

I wish the swedes were as quick to euthanize corporations as they are small children ;)
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#22
16:16 February 9, 2010 by Callidus
Beavis, were you a frequent flyer in the 50s? Back then you could have all you had in the '80s and much more...

;)
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#23
16:50 February 9, 2010 by Beavis
@ Callidus "The problem they are facing is more due to bad strategic choice in the past than the actual price ticket" ....

What a joke! have you not read some of the prices they were charging vs their competition, the only thing extra being given was a newspaper. Yes we can do without the food, if the ticket price is lower.

Heres a typical example: Last July they were charging on average 4200kr for the whole month (from May on) one way for a short haul 2 hours 20 minutes flight Stockholm to Dublin. The competition was offering it for 400kr (inc all taxes etc)

I wrote them an email saying that I would prefer to fly to Arlanda than Skavsta and didnt mind paying a little more but 10 times the price was not reasonable. I got a reply stating "Prices for fares arr worked out using complex calcuation. We hope to see you fly with us again in the near future".

Either they need to fire the 8 year old counting on the abacus to do these calulations or continue to loose money
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#24
19:01 February 9, 2010 by conboy
After several experiences with SAS in recent years including clumsy scheduling i.e. forty minute connecting flights to Ireland via Kastrup with small children due to snow problems in Arlanda IN THE MONTH OF MARCH, forgetful and unprofessional service from stewarding staff I say sack the bluffers and sell of their planes to Mongolian Airways.
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#25
21:38 February 9, 2010 by coy
I flown with SAS for many years internationally and found them to be an excellant team to fly with. They have new airbus planes and 9 times out of 10 the staff are excellent.

I recently flew to frankfurt from lax with Lufthansa on an old 747 without a video screen in the seat ...now that was a horrible flight. Very 80's....

I dont fly domestically with SAS but have heard that they are not good as the international flights. One service you don't see though, are the experienced pilots and service engineers. Ryan air probably goes with lowest bidder for their engineering services and least experienced pilots to get a real nice price. Be sure to catch the latest episode of air crash investigation on Nat Geo channel.

SAS website does have it its glitches every now and then, but you can get get good deals there if you are quick or it is low season. Last minute too, I've never been able to do that on Lufthansa's site.

Its a tough business to be in now for any airline. I hope SAS can keep up the quality and stay in the game.
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#26
22:43 February 9, 2010 by Callidus
@ Bevis

Let me see...

Flying to Ireland....

with Ryan Air...

Do I need to say more??

I don't think so.
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#27
01:08 February 10, 2010 by Beavis
SAS have a total of 23 airbus worldwide but mainly use MD82,s for their euopean flights (according to their website) There have been 13 major crashes with SAS (yes they have flown longer) compared to Ryans 0 (consider their fleet is 50 times bigger)

Need you say more what exactly? Ive flown with the 94 times Skavsta -Dublin, late twice (due to weather)

Yes Ryan for the Dublin to Stockholm (no other choice as SAS is crazy prices 9 months of the year) Norwegian CPH to Dublin (So happy they came in to give a choice)'

And either Ryan or Norwegian Dublin to Oslo (as SAS charge up to 5400kr in the summer, whereas the other 2 are craging around 550kr)

At the end of the day SAS are clueless on realistic pricing option 90% of the time.
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#28
06:28 February 10, 2010 by tapaninyc
"One service you don't see though, are the experienced pilots and service engineers. Ryan air probably goes with lowest bidder for their engineering services and least experienced pilots to get a real nice price. Be sure to catch the latest episode of air crash investigation on Nat Geo channel."

I am always fascinated as to how the Swedes always, no matter how bad things are, presume that there is some hidden quality of supreme Swedish wonderfulness. No evidence in the world can compete against this invisible quality the Swedes ACTUALLY believe is there... There must be a horrible dissonance in their minds, when things like SAS are going belly-up. How CAN it be, with all the inherent Swedish wonderfulness? How CAN people fail to see and appreciate it!

I tell you why: It is all in your minds - it does not exist!
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#29
10:23 February 10, 2010 by JulieLou40
@ tapaninyc-I found your comments extremely distasteful! How do you think the parents of the little baby who died at Astrid Lingrens hospital, would feel if they saw you joking about the death like that? Especially with a "wink" afterwards? You disgust me, and I have reported you for your appallingly tasteless comments.
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#30
12:26 February 10, 2010 by Beavis
@ JulieLou40 I think you totally mis understood his comments. The first part is a quotation from another poster...

What he is say that just because its Swedish it must be better. For example the strawberries in the summer that are "Swedish" are 20% more expensive than the ones that come from Belgium. To most Swedes the Swedish ones are somehow better. (To me the Belgian ones actually tasted much better) The governtment last year even set up a task force to try to catch people selling foreign strawberries as Swedish.

SAS ar ejust like SL, badly run beacuase they overcharge their customer for short trips.
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#31
14:51 February 10, 2010 by wandermust
I've always flown SAS to/from the states with no real complaints. Until today. My flight was cancelled so I called them to rebook. After keeping me on hold for almost an hour, they tell me I have to physically GO to Arlanda in order to rebook. Citing the reason that my ticket was purchased in the US and that this is the return leg of my ticket. I don't understand this logic - regardless of where I bought my ticket, I'm still a paying SAS customer and they should be able to assist me over the phone. Don't they all share the same computer system??
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#32
15:53 February 10, 2010 by JulieLou40
@ Beavis. From which poster is tapaninyc taking the quote? Because I surely can't see it. And even if he had taken the quote from someone else-there was absolutely no need to add the 2nd paragraph!
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#33
16:04 February 10, 2010 by tapaninyc
@JulieLou40

not the child. The children.

As you can see from for instance http://sismicro.wordpress.com/2010/01/25/swedish-doctors-put-a-7-year-old-boy-out-of-his-misery/ the swedish euthanasia program is systematic, and the MDs kill children even in cases where the parent expressly plead them to not do so.

The Swedes think this is ok, and find it 'ridiculous' that the MDs right to kill is even questioned, and that these things are talked about.

I for one intend to keep bringing these things up. Don't care how many ppl I rub the wrong way, I intend to keep on rubbing to make the point that you people by accepting this are enabling the killings. Just like you do, by not actively trying to silence the little reminders the rest of as are dropping all over the place that these murders are still taking place. ;)
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#34
22:39 February 11, 2010 by Bender B Rodriquez
@tapaninyc: No, Swedes in general do not support the actions of the MD at Astrid Lindgrens Barnsjukhus. No, Swedes in general do not find SAS to be a superior airline. One reason many Swedes still fly with SAS is because they operate the smaller Swedish airports; not everyone can start their journey at Arlanda or Landvetter. Personally, I prefer Malmö Aviation for domestic and Lufthansa for long-haul flights.
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#35
07:31 February 12, 2010 by karex
@coy

New airbuses= Now there's a reason not to fly SAS. Haven't you heard? Airbuses have been dropping out of the sky like flies lately.
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#36
10:17 March 12, 2010 by Localer
saw their advertisement today, return to Athens should be around 1400 SEK....but it cost like 7000 SEK for a return ticket !!! hell no yeah am going to buy it, no wonder the airline is going bankrupt soon.
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