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SAS slashes workforce to save cash

TT/The Local · 12 Aug 2009, 08:39

Published: 12 Aug 2009 08:39 GMT+02:00

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The airline's various savings plans now total 4.5 billion kronor and its workforce will be ultimately be reduced to 1,500 staff.

Restructuring costs have come in higher than projected and have increased by 800 million kronor to 1.70 billion kronor for the full year 2009.

In total 1,066 full-time staff have left the concern and seven aircraft have been taken out of service. A further 14 aircraft will be grounded during the remainder of the year.

Passenger numbers continue their dramatic decline in the second quarter, down 17.1 percent.

The airline reported a pre-tax loss of 1.039 billion kronor for the second quarter, in comparison to a profit of 131 million kronor in the corresponding period of 2008.

Turnover amounted to to 12.223 billion kronor in comparison to 14.412 billion a year earlier.

According to a survey compiled by Reuters, analysts had expected a pre-tax loss of 1.143 billion kronor and a turnover of 12.123 billion.

Growth is expected to be negative during 2009, CEO Mats Jansson confirmed. It remained uncertain when the recovery would begin with SAS expecting further falls in passenger numbers in 2009.

Mats Jansson announced plans to push through significant pay cuts for aircraft staff.

SAS explained in its report that both the new savings measures and the previous CORE program are designed to slim down the airline's costs to closer to those of its rivals.

"In sum SAS has to compete on the same conditions as the competition, which is ultimately a question of survival," Jansson said.

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SAS staff costs are an average of 20 percent higher than many of its competitors.

Claus Sonberg at SAS explained that it can not be ruled out that Norwegian cabin staff are replaced by cheaper Swedes.

"In the long term we can not compete on different conditions and have more expensive staff than, for example, Norwegian," he explained.

TT/The Local (news@thelocal.se)

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Your comments about this article

09:47 August 12, 2009 by voyager
"Mats Jansson announced plans to push through significant pay cuts for aircraft staff"

I wonder how much of a pay cut he will take?
12:49 August 12, 2009 by Random Guy
Could it be that SAS doe not know how to run an airline? I fly to Sweden 2 or 3 times each year. I will NEVER fly SAS again. Why? Because of their rewards program and their non existent customer service. With Delta, NWA, KLM, AirFrance, I am Medallion and get free upgrades, am appreciated etc. With SAS, your miles go by by each YEAR even if you fly. Not only that, if you buy a cheap seat, they give you less points. They the staff seems to be upset you are flying with them! They are not "SJ", (the national train co), but they act that way. I see SAS grounded soon!
13:01 August 12, 2009 by Beavis
Utter morons... Slash your prices not your Staff SAS!!! 4800kr for a one way economy one way flight Stockholm to Dublin is why your planes are half full!!!Your website is slow and rubbish.Stop wasting millions on awful advertising.Im sure Mats will be giving himself a pay rise with the extra cash he gets from getting rid of the other workers.SAS..the worst run airline in the world..
16:02 August 12, 2009 by flyer12
Its a sad situation.

The SAS staff in Chicago organized and offered upper management to take an 8 percent pay cut, and said they were willing to do more. It was all arranged on a local level.

Not only did SAS management not even acknowledge their offer, they were served with a lay off notice that their positions would be outsourced within a week of their offer being made.
18:11 August 12, 2009 by skane refugee
SAS is a very poorly managed company

... loads of money wasted on grandiose acquisitions of hotels and unsafe Spanish airlines

... near comtempt for premium fare passengers who are the difference between profit and loss on many (particularly longhaul) flights

... more time spent lobbying Scandinavian governments against foreign (non-Scandi) low fare airlines than on improving their price/service levels

... their lobbying has succeeded in limiting Ryanairs ambitions in the region, but opened the door for Scandinavian competitors like Norwegian and Cimber who are decimating SASs short-haul customer base
21:03 August 12, 2009 by kenny8076
I work at Dulles International airport in D.C. and SAS flies nonstop from here to copenhagen. im moving to sweden in november and was looking around for plane tickets and on SAS website from dulles to gothenburg sweden. it starts at $2,651(one way) on november 10th. connecting in copenhagen. thats absurd and is why there plane leaves here nearly empty all the time, you can fly lufthansa or Austrian air on this route for less than $500
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