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SAS shares jump on bidding war rumours

AFP/The Local · 3 Jan 2011, 18:14

Published: 03 Jan 2011 18:14 GMT+01:00

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At 1445 GMT, shares in SAS -- in which Denmark, Norway and Sweden together own 50 percent -- were up more than 10 percent on a Stockholm stock exchange up 1.83 percent.

When the market closed at 1630 GMT, SAS shares had gained 11.11 percent to 25 kronor ($3.70) on a market up 1.84 percent.

The gains came the first trading day after a report in Danish business daily Boersen said three major European airlines -- Air France-KLM, Lufthansa and British Airways would be ready to enter a "bidding war" to buy SAS.

The newspaper quoted an unnamed source as saying "when the process starts, I think all the major aviation players will be interested," referring to when the Scandinavian governments will be ready to sell their stake in the airline.

The Swedish government is the single largest shareholder in SAS with a 21.4-percent-stake, while Denmark and Norway each hold 14.3 percent. The rest is privately owned.

In February 2010, the Swedish government said it was interested in reducing its holding in SAS at an "opportune moment" and Denmark and Norway followed suit.

SAS has been hard-hit by the rise of low-cost airline Norwegian and by plunging passenger traffic numbers in the wake of the global economic crisis.

Rumours of a sell-off have been circulating since 2008, with Lufthansa seen as the most probable buyer.

Story continues below…

Late last month, SAS shares soared on rumours that Lufthansa, already an SAS partner on some routes, could make an offer for the Scandinavian company as early as the first quarter of 2011.

An SAS spokesman reached Monday said the company would not comment on market rumours.

AFP/The Local (news@thelocal.se)

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Your comments about this article

18:40 January 3, 2011 by ISayWhatPeopleThink
"SAS has been hard-hit by the rise of low-cost airline Norwegian and by plunging passenger traffic numbers in the wake of the global economic crisis. "

Yeah. *sarcastic cough* That and the fact that SAS is horribly overpriced for what they deliver. Add in a complete lack of customer service, crap frequent flyer program, and a horribly aging fleet and you got SAS's real problem - an airline that still believes it is a full-service airline deserving of a premium ticket price. SAS has been operating as a low-price no frills carrier for years, but has been unwilling to deviate from the facade and likes to think they're still on top and the fare prices reflect that. They've been in denial for years. Hopefully someone will buy them out and set it right.

Aviation moved on and changed their services and their prices to reflect the economic crunch, while SAS got stuck in a strange 1980s time warp. It was only a matter of time until they went belly-up.
19:12 January 3, 2011 by johnny1939
So true "I saywhat people think". But it is still my prefered airline between Newark & Stockholm. I have tried Delta, continental and they are ok but I really like to fly my country's airline. Oh well.......what happens happens
19:19 January 3, 2011 by Essingen
British Airways taking over SAS.....what a terrible prospect.
21:36 January 3, 2011 by ingka
yeah ... brittish inefficiency combined with swedish laid back attitude that will be fun :-)
22:16 January 3, 2011 by Beavis
Is it on tradera? Lets see if my 200kr bid wins (all its worth!) Yep BA taking over SAS..well beats a merger, that truly would be one of the worlds worst airlines.
02:18 January 4, 2011 by Eagle63
Mmm, I think I'm gonna call Air Canada (or WestJet), maybe they'd be interested, creating one Great Nordic Airline.....
07:50 January 4, 2011 by expatjourno
I love SAS. Best cabin crews anywhere. Professional and caring. They've been fantastic with my daughter ever since she was an infant. As soon as I get on the plane in Chicago, I feel like I'm home.

And the ground staff at Arlanda was unforgettably kind and comforting when I had to make an emergency visit to the U.S. to visit my dying mother.

On top of that, I feel certain that SAS would never compromise on safety to improve the bottom line. It will always be my first choice.
08:00 January 4, 2011 by Rick Methven
Lufthansa is the only real potential buyer for SAS. BA, apart for having its own big problems is at the start of its merger with Iberia and Scandinavian routes are a low priority. KLM/AirFrance are consolidating at the moment.

Lufthansa on the other hand are recruiting staff and putting larger aircraft with lower frequencies on to a lot of routes freeing up a lot of modern narrow bodied aircraft which could be used to replace the ageing narrow bodied fleet of SAS.
11:34 January 4, 2011 by Eagle63
@ 0750:

I agree SAS crews are very professional, almost as good as those of Canadian airlines like WestJet and Air Canada.

And concerning aging fleets; that doesn't have to be a bad thing: most pilots favor flying some of the older jets (such as the MD-80 and especially the L-1011 TriStar) over newer over-automated Airbuses.
15:38 January 4, 2011 by alingsaskev
I'm with "Isaywhatpeoplethink" on this one.

SAS is rated as a 3star airline on most websites, in such illustrious company as Ethiopian Airways and Aeroflot.

It's routes are limited, complicated and ineffectual, it's on-board services meagre, it's fleet aged, it's cabin crew churlish and it's prices excessive.

When you consider that, Finnair, Icelandair, Norwegian, Ryanair, Easyjet, and even Lufthansa, BA and KLM are doing fine servicing Scandinavia - it points to the fact that SAS's marketing mix is all wrong. The wrong destinations, the wrong product, and the wrong price.

I really hope Lufthansa do buy SAS, as they have been getting it right for years, better still would be a middle eastern or far eastern carrier like Etihad, Qatar or Cathay, who lead the way in both comfort and service.
17:37 January 4, 2011 by ChrisPDX
Once upon a time, SAS flew from Copenhagen to Seattle, Washington. I live in Portland, Oregon.

I would pay 300 bucks more to fly SAS out of Seattle to Co[Copenhagen, than be at the Mercy of United and/or Lufthansa. I love SAS and the staff. I immediately feel back at home in Sweden once on board. (Although I was flying to Copenhagen, but had Swedish crews.)

The flight attendants on Lufthansa are too uptight for me.

Also by flying with United/Lufthansa, I would be at the mercy of Dulles airport in Wash. D.C. or Frankfort in Germany. Both airports I wouldn't wish on my worst enemy for punishment. A slow painful death would be kinder. hehehe
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