SAS slashes workforce to save cash

Scandinavian airline SAS has announced cuts of 1,000 to 1,500 jobs as part of a new austerity programme to shave 2 billion kronor ($274 million) off its outgoings.

SAS slashes workforce to save cash

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.

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.

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‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers.