SAS expects profits in 2013 after cost cuts

Scandinavian airline SAS said on Wednesday it will be profitable next year, thanks to an aggressive cost-cutting drive which prompted objections that it had strong-armed unions in the Scandinavian countries.

SAS expects profits in 2013 after cost cuts

Assuming “that no significant unexpected negative events occur in our operating environment and that jet fuel prices remain stable at current levels, the SAS group’s assessment is that potential exists” for a pre-tax profit in the coming year, chief executive Rickard Gustafson said in a statement.

He added that the current quarter will be “extremely weak” since it’s traditionally a less profitable time of the year for the airline industry.

SAS last month struck deals with all of its unions to cut salaries and pensions and raise working hours in a bid to turn the company’s dire financial situation around.

Critics have said the company’s demands, dubbed its “final call” savings plan, ran counter to the Scandinavian labour model, which relies heavily on collective bargaining and a close dialogue between unions and employers.

“Our unions have shown that they have shouldered responsibility and delivered under extraordinary circumstances. The new agreements create the necessary conditions for increased flexibility, reduced complexity and lower costs,” Gustafson said.

SAS has come under increasing pressure in recent years from low-cost rivals such as Oslo-based Norwegian, Europe’s third-largest budget airline.

The group said on Wednesday that its high level of customer service and a global network of destinations would differentiate it from budget rivals.

The company, which had already announced its third quarter results, said it made a pretax loss of 1.25 billion kronor ($189 million) in the truncated financial year ending October.

The group’s new fiscal year began in November, meaning that the current three-month period is its first quarter.

AFP/The Local/og

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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.