OYRJA
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SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 7:18 pm

I read in danish travel magazine that SK might end all their Intercontinental flights in 10 years because they are loosing way to much money on them.
And they will concentrate on operating only in Europe instead of.
They are still in debt with 13 billion Dkr. And that is alot, so something has to be done.

Would that be a good decision to make now that there are so many LCC's in Europe? Wouldn't it be smarter to make a new Niche and fly to places where not too many airlines fly to overseas?
 
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solnabo
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 9:15 pm

I wouldnt be suprised at all if SK goes down the toilet..

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Lufthansa
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 9:34 pm

I think SK need a completely new business model because the old one clearly isn't working.

Unless you live in CPH, what advantage does taking SK for an intercontinental flight offer you? Not much, unless you happen to live in ARN and want to go to either EWR or ORD.

It could very well be a case of trying to get the cost base down to a level to make it worthwhile, but some attempt does need to be made to serve these people... to the greater world, otherwise what is the point? KLM, LH and BA serve just as effectively.

It is worth noting that Finnair seem to be able to succefully connect little HEL to the world a lot better than SAS manage the much larger ARN? And what about OSL? CO seems to make it work. At the very least, ARN should be linked to a few Key hubs in Asia (changi and BKK for starters) and the USA.
 
Maersk737
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 9:37 pm

I think the management say things like that, to lay maximum pressure on the employees....

Cheers

Peter
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AF-A319
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RE: SK To End Intercontinental Flights In 10 Years

Thu Nov 24, 2005 9:48 pm

If they have been loosing money on these routes for many years, why don't they stop them now? Maybe the SK Shareholders (i.e. the Scandinavian taxpayers) are happy to pay for them?

That's only a point of view, but I think that Star alliance has WAY TOO MANY hubs in central Europe (CPH, FRA, MUC, ZRH, WAW, VIE...) and some will need to go! CPH is unfortunately a likely candidate, unless SK dramatically change the structure of its long haul network and only keeps some very limited presence on routes where it can have a geographic advantage (AY could be an example to follow).
 
SK973
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 9:59 pm

More long haul routes out from ARN would be a nice start. Especially BKK and SIN like Lufthansa said!  Smile
 
OYRJA
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 10:25 pm

But they have BKK already from ARN.
But maybe they should expand some more in Asia/Far east instead.
 
PavlovsDog
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 10:44 pm

My impression from the last financials I saw that was SAS-Braathens (Norway) and Spanair were basically paying for the rest of the company.

The 340's are too big for SK. They could use the 787's when they come out.
 
CRJ900
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 10:52 pm

I thought most of SK's intercont. flights were flying pretty full all the time... are the yields too low to earn money?

I think SK made a big mistake back in the 1980s when they branded themselves as "the businessman's airline" - many "ordinary" people felt that they weren't good enough for SK and chose other airlines and stuck to them for the next 15-20 years... thus limiting SK's opportunities as their pax potential became limited. Scandinavians take egalitarianism seriously, you know... we are all as good as the next person  Smile

Now SK is striving to be an airline for everyone, and it's working in regards to their European network where they have had significant growth this year with increased profits.

Maybe they ought to reduce their biz-class cabin and offer more Y seats as the leisure market is growing fast - as LCCs can attest... the long-haul leisure market is the next step.
Come, fly the prevailing winds with me
 
Matt27
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 11:00 pm

Quoting PavlovsDog (Reply 7):
The 340's are too big for SK.

Really?? From what I hear SAS' A330/340s are more or less full on most flights?
Man ska inte dricka rödvin i en vit hall.
 
scalebuilder
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 11:03 pm

I agree with Lufthansa's statement. SAS is in need of a complete revamp as an organization. Over the years SAS has gobbled up most of the competition. Needless to say, some of these resulted in some nice gains when they were sold.

In it's current day form SAS is run as a hodge podge airline with two many brands under the same umbrella. You have the traditional SK brand,SAS International, SAS Braathens in Norway, and then you have Snowflake on top of that (I am leaving out all other subsidiaries in the SAS family). I'm not surprised why the flying passenger is having a hard time identifying SAS as a brand out there.

SAS used to be a pioneering airline famous for innovation. For the past 10 years it has adopted the "lets follow and copy Joe" approach. The end result is an airline that has faced stagnation and incurred consistent financial losses.

To end intercontinental routes may be just another symptom of what I have described above. Most airlines make money participating in this segment. It is ultimately how you run your airline in this segment, and not just where you fly, that determines profitability.
Go the extra mile......and avoid the traffic!!!
 
MAS777
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 11:10 pm

It is interesting that SAS has managed to survive all this time serving 3 masters (as national carrier). Perhaps dissolution may be the way forward? Look at Malaysia-Singapore Airlines - since its split in 1972 we now have 2 of the worlds best carriers competing almost head-to-head with the consumer being the ultimate winner.
 
Maersk737
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 11:17 pm

Well, if we look at the third quarter report from SAS, it looks as they are actually doing pretty well Big grin

http://www.sasgroup.net/SASGROUP_IR/CMSForeignContent/q305eng_s.pdf

Cheers

Peter
I'm not proud to be a Viking, just thankfull
 
kiwiandrew

RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 11:25 pm

Quoting MAS777 (Reply 11):
Look at Malaysia-Singapore Airlines - since its split in 1972 we now have 2 of the worlds best carriers competing almost head-to-head with the consumer being the ultimate winner.

there is a huge difference - both SIN and KUL are well situated as intercontinental hubs and are in an area of huge traffic growth. How much of a hub could either ARN or OSL be on their own . They are on the periphery of Europe in sparsely populated countries ( albeit very wealthy ones ) .

At the moment SK does seem something of an anomaly as a multinational carrier ( there is an interesting thread out there on the subject although mainly with reference to TA rather than SK ) but with increasing consolidation of the industry I think this will become more common - we are already seeing tentative steps in this direction AF/KL , LH/LX etc .
 
scalebuilder
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RE: SK To End Intercontinental Flights In 10 Years?

Thu Nov 24, 2005 11:58 pm

I don't think we should put too much emphasis on numbers that turned from red to black. Competing (and partnering) airlines like Lufthansa, KLM etc. have shown consistent profitability for several years. SAS has not.

SAS management needs to simply face the facts. The SAS product has become way too complicated. If you study their financials. there are exceptions from subsidiaries within the SAS family that have shown viability of its own, but that is likely because these have the independence and autonomy to be run as simple stand-alone brands.

I think it makes sense for Scandinavia to have one common carrier. And facing the demographic challenges of low population and traffic growth in the years ahead, this airline simply needs to think new. A new CEO who understands these facts is step number one. Their current one simply doesn't get it. He has cut cost, but made the organization even more complicated.
Go the extra mile......and avoid the traffic!!!
 
bjornstrom
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 12:22 am

All flights from SIN/BKK (yes, they fly to SIN via BKK) are sold-out until the last seats recently. I had a real problem getting a Business Class ticket home from BKK but got Seat 1A when someone didnt make it to the airport (had to standby for the seat).

Talked to the Stewardess aboard our flight: "Its always full on these flights".

After renewing the Business Class to only 32 (or 36?) seats they will have even less seats to sell.
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RedChili
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 12:28 am

Quoting OYRJA (Reply 6):
But they have BKK already from ARN.

No. The only long hauls from ARN are to EWR and ORD.

Quoting PavlovsDog (Reply 7):
The 340's are too big for SK.

I think that they actually need bigger planes for some routes. Thai can fill a 744 seven days a week between CPH-BKK. SAS has only six weekly flights on an A343 on the same route with an extension to SIN.

AY has more seats in their MD-11 than SAS has in their A333 and A343. Besides, AY is the home carrier for five million people only, while SAS is the home carrier for 19 million people. The difference is that AY has a vision of making HEL into a long haul hub, while SAS has a vision of trying to compete with Ryanair.

Quoting Kiwiandrew (Reply 13):
How much of a hub could either ARN or OSL be on their own . They are on the periphery of Europe in sparsely populated countries ( albeit very wealthy ones ) .

Sweden and Stockholm are much bigger than Finland and Helsinki, so I believe that ARN has a much bigger potential than HEL has.
Top 10 airplanes: B737, T154, B747, IL96, T134, IL62, A320, MD80, B757, DC10
 
persotvik
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 12:34 am

Quoting OYRJA (Reply 6):
But they have BKK already from ARN.
But maybe they should expand some more in Asia/Far east instead.

SK Don't fly ARN-BKK. That's TG.
The main problem is the costbase of the airline. CEO Lindegaard have stated if they can lower the costbase by 20 % they will start three new longhauls from ARN. Additional 3 aircrafts will be brougth into the fleet Smile
ARN-TYO is very much wanted Smile
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TR
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 12:36 am

Quoting Scalebuilder (Reply 14):
new CEO who understands these facts is step number one. Their current one simply doesn't get it

The easiest thing to do is to blame it all on Jørgen Lindegaard. It is correct that he came without an aviation background. IMO being an 'insider' is not always right. Look at many airline CEO's who are walking from one airline to another, leaving a mess bigger every time. Lindegaard had it all against him almost from day 1. 9/11 came almost as his took office followed about a month later by the tragic disaster in Milan. Then the 'airline man number one' in SAS, Vagn Sørensen, had to resign in the aftermath of the SAS/Maersk cartel. Sørensen for sure was the man who was supposed to stand by Lindegaard and take care of much of the day-to-day running of SAS. Lindegaard was left alone with a cargo hold full of disaster.

From there I think he has worked his way up. He has made mistakes, yes. Who wouldn't? But he has stuck with his plan and he has followed it and adjusted accordingly. I think he has taken the approach "it is better to make faults when you work to achieve own objectives than to make faults by blindly following other peoples objectives".

Weather he will stay or go I think depend on the results. SAS has been cutting costs, but SAS is still flying so many costs were there to be cut. They are back in black numbers. Yes, there is a lot to decide on, but I am sure SAS will survive. Maybe in another shape than today. But SAS will be around. And who knows. Vagn Sørensen will not extend his contract with Austrian Airlines and he returns to Denmark in a year from now.

[Edited 2005-11-24 16:40:58]
 
CRJ900
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 12:46 am

If the 343 is too small for some Asian routes, perhaps they should give fellow Star partner Air Canada a call and lease their two A345s when AC start accepting the 777s... will be cheaper than buying new aircraft and mx-wise the 345 and 333 use the Trent 500 and 700 engines which are very similar.
The 345 should have room for 20-30 more Y seats.
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scalebuilder
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 12:49 am

Quoting RedChili (Reply 16):
The difference is that AY has a vision of making HEL into a long haul hub, while SAS has a vision of trying to compete with Ryanair

Could not have said this better myself. SAS is a legacy carrier, not a low cost carrier, but look at how SAS management deals with just that? The lack of vision within SAS will one day bring this airline down. Instead of acquiring Finnair, SAS should rather try to learn from this airline. If Finnair can make money filling up their long haul flights in a 5 million market, then why is it so that SAS can't do the same in a 19+ million market?
Go the extra mile......and avoid the traffic!!!
 
OYRJA
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 12:55 am

Quoting Persotvik (Reply 17):
SK Don't fly ARN-BKK. That's TG.

Thats true. It's TG. My bad.  Sad
 
TR
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 12:58 am

Quoting Scalebuilder (Reply 20):
The lack of vision within SAS will one day bring this airline down.

One of those statements that people start to believe just because it is repeated over and over again. I am not saying that I have any idea on how to run an airline. It is not my profession. However SAS has for many, many years been a 'first mover' and they still are. Not everything goes as planned - that's obvious. But to repeatedly state that they have no vision is far off.

Quoting Scalebuilder (Reply 20):
If Finnair can make money filling up their long haul flights in a 5 million market, then why is it so that SAS can't do the same in a 19+ million market?

SAS fills their long haul flights!! I travel a lot on SAS long haul and most flights are full to the last seat. Even in high yield Business Class. A full plane is not the same as making money. It is not that easy. If it was, many long gone airlines would still be flying proudly.
 
Matt27
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 1:03 am

Quoting Scalebuilder (Reply 20):
If Finnair can make money filling up their long haul flights in a 5 million market, then why is it so that SAS can't do the same in a 19+ million market?

The thing is: if a Swede(or Dane) wants to go on vacation (long-haul) the last airline he/she looks at is SAS. We have gotten used to fly long-haul via AMS, LHR, FRA, CDG. People don't see SAS as an option. The same thing happens if you go to a travel agent. They never look up SAS' prices or schedules. It's always KLM via AMS or Lufthansa via FRA.
I think ARN-BKK would be profitable for SAS, Thai fly the route 5/w all with a B747-400. The demand for seats to Thailand is HUGE in Sweden (maybe in Denmark and Norway too)
Man ska inte dricka rödvin i en vit hall.
 
scalebuilder
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 1:13 am

Quoting TR (Reply 18):
The easiest thing to do is to blame it all on Jørgen Lindegaard.

I am not trying to blame Jørgen Lindegaard. I just don't see success for SAS in his future tenure with this airline. Maybe SAS simply needs someone with a strong airline and financial background to get the job done. I wish Gordon Bethune had a European counterpart. That person could get this airline on track and with results to prove it.

I think SAS has followed a blindfolded strategy over the past few years. They created Snowflake...what's the purpose of that? You only create competition against yourself. It just doesn't fit.... and here comes SAS Braathens. I know that the name Braathens has strong brand loyalty in Norway, but what value does it really add to overall consolidated results to brand your airplanes SAS Braathens rather than plain SAS? They need to let go of the sentimentality. It costs money to hang on to those kind of things. Think of how SAS reports results? My guess is that additional people had to be hired just so we can effectively "track that SAS Braathens" brand.

I acknowledge that Jørgen Lindegaard has achieved much needed cost cuts, and maybe better integration with the labor unions. He has just added too much complexity to the SAS organizational chart. We need a man (or woman) who can use and apply the word simplicity.
Go the extra mile......and avoid the traffic!!!
 
scalebuilder
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 1:19 am

Quoting TR (Reply 22):
A full plane is not the same as making money

True statement for SAS it seems. Wrong for Finnair. Why?
Go the extra mile......and avoid the traffic!!!
 
Tristarsteve
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 1:30 am

Quoting CRJ900 (Reply 8):
I thought most of SK's intercont. flights were flying pretty full all the time... are the yields too low to earn money

Anyone can fill an aircraft with pax. The clever bit is filling it with pax who have paid good money for their ticket.
Look at Ryanair. They can fill aircraft to airports I have never heard of!
But if SK fill their aircraft at these fares they make a loss because their costs are so much higher. For a network carrier you have to size the aircraft to carry First and Business class pax, and try to carry only full fare economy and allow the cheap ticket pax fill the Y seats on the other days. TG can fill ARN-BKK B747 because they are a low cost carrier. If SK tried this they would make a loss on the route.
 
scalebuilder
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 1:44 am

Quoting Matt27 (Reply 23):
The same thing happens if you go to a travel agent. They never look up SAS' prices or schedules

This is key. This is where Jørgen Lindegaard can make a difference. Instead of inventing yet another brand of air travel that never gets the necessary momentum to be recognized, he needs to keep on focusing on building one that does. That will make a difference.
Go the extra mile......and avoid the traffic!!!
 
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Stitch
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 1:47 am

I hear our SEA-CPH flight is one of the best moneymakers in the system. No clue if it is true.

They are advertising that they have Connexion pretty heavily here in the SEA market, however.
 
Lufthansa
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 1:49 am

You know guys, the Ideal man for this Job is available.

I think, as unthinkable as it may seem to those in Scandinavia, it is time to bring in an outsider.... and yes, take an Anglo-assertive approach.

Quoting Scalebuilder (Reply 24):
I wish Gordon Bethune had a European counterpart. That person could get this airline on track and with results to prove it.

We've got somebody better, who is proven! His name is Rod Eddington. He basically built Cathay, in his brief period at Ansett manage to squeeze 100 million profit (with owners who were staving it of capital) before taking the number one job at BA, and his results there speak wonders. Eddington is proven! Edington understands how the LCC do their job well, and he showed that BA could learn from them, and but also do what BA do well (i.e - not trying to become a LCC itself, like the absurd 'go' experienment). He also understood market segmentation, how to make Long Hauls work etc. As much as SAS needs to retain its Nordic flavour and style, I think its time for an Anglo push. Unfortunately this tends to happen to Scandinavian companies from time to time, they tend not to be aggressive enough when German, British and Dutch companies up the anti..... the dutch have done wonders at Ikea, I think it could be time for SAS to follow suit. It was very good brand... it can be again.
 
scalebuilder
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 2:10 am

Quoting Lufthansa (Reply 29):
I think, as unthinkable as it may seem to those in Scandinavia, it is time to bring in an outsider.... and yes, take an Anglo-assertive approach.

I am with you on this one.... Bring in some completely new thinking. Jørgen Lindegaard may be good at cutting cost, but we should not confuse that with being a good leader. I frankly speaking do not think that any airline is necessarily successful simply because their costs are low. There is branding and customer recognition too. SAS lacks that today. It is their own fault that customers cannot identify with them.

I think Scandinavians would be quite welcoming to an outsider! I am Scandinavian, and take great pride in our multilateral carrier. Scandinavia absolutely needs SAS to be around.
Go the extra mile......and avoid the traffic!!!
 
thaiaggie
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 2:51 am

Quoting TristarSteve (Reply 26):
TG can fill ARN-BKK B747 because they are a low cost carrier. If SK tried this they would make a loss on the route.

TG low cost??? since when???
Barrow, Alaska in Feb. It was Cold!
 
Econojetter
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 3:06 am

Quoting Kiwiandrew (Reply 13):
but with increasing consolidation of the industry I think this will become more common - we are already seeing tentative steps in this direction AF/KL , LH/LX etc

I, too, believe that's where the consolidation in Europe is headed. SAS was formed more for political reasons than market pressures. Remaining in such a way (and absorbing competitors in its own backyard, such as Braathens etc.) has ensured its dominance in Scandinavia over the coming years as consolidation takes place in Europe as the market continues to evolve. Great for SAS but there were serious anti-competitive concerns, until Ryanair (and later FlyMe and FlyNordic) came into the picture.

Quoting Scalebuilder (Reply 10):
In it's current day form SAS is run as a hodge podge airline with two many brands under the same umbrella. You have the traditional SK brand,SAS International, SAS Braathens in Norway, and then you have Snowflake on top of that (I am leaving out all other subsidiaries in the SAS family).

Those terms (except Snowflake) are of greater significance to management than to customers. To most people in Scandinavia, SAS is just SAS. That said, I agree that the current Economy Flex regional product and the whole do-I-get-food-or-not thing are a little messy and could use more streamlining.
For example:-
Business - full ticketing flexibility, extra FFP points, lounge access, free onboard catering
Economy (full fare, without giving it a name) - full ticketing flexibility, full FFP points, lounge access (optional: can offer a yearly lounge access package)
Economy (discounted, without giving it a name) - ticketing restrictions, partial or no FFP points

While I also understand that airlines frequently adjust product offerings based on the competition, someone needs to evaluate the cost of these inconsistensies to the overall integrity of the brand and the logistical complexities they cause.

As an aside, I think that the LCC-inspired leaner product offerings adopted by SAS are appropriate for the market in this day and age. Many lament the passing of the days of luxury, but it is something that the average passenger will eventually get used to.

Quoting Lufthansa (Reply 2):
At the very least, ARN should be linked to a few Key hubs in Asia (changi and BKK for starters) and the USA.

Agreed. I think the whole insistence upon bunching all medium/longhaul services through CPH was a strategic misstep. The whole drop-the-767s, multiple-daily-from-CPH-before-considering-ARN/OSL approach gave great cost-saving numbers but neglected longer-term growth; the result is now the loss of valuable O&D to AY, CO and other airlines and the non-availability of suitable equipment to respond to the erosion of customer base.

The last part is a pity because the recent SAS restructure decentralized the management, which would allow individual divisions (Denmark, Norway, Sweden and International) to be more nimble in addressing the needs that are specific to each of them. ARN could benefit from a few longhauls to e.g. NRT, PEK, BKK (perhaps joint ops with TG). OSL could perhaps be connected to IAD. However, those cannot be realized without a few 767-sized aircraft.

Quoting MAS777 (Reply 11):
Perhaps dissolution may be the way forward? Look at Malaysia-Singapore Airlines - since its split in 1972 we now have 2 of the worlds best carriers

Different region, different market, different set of demands. Besides, your example needs a qualifying statement. The only thing for which MAS is in the league as SIA is the inflight experience. It is still far behind SIA in overall delivery and corporate strategy, not to mention a perennial drain on national resources.
 
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AirPacific747
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 3:11 am

All the longhaul flights with SAS I have been on have been full.

I think that maybe if they introduced some allnew longhaul routes, that would help together with a lot of advertising for the new routes. The problem is that they probably won't be able to create new routes without removing others.
 
hodja
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 3:15 am

Not intending to side with Jørgen Lindegaard in any way, but I think he's up against almost insurmountable forces.

Forget about Snowflake experiments, A330/340s, Vagn Sørensen, visions, intercontinental routes etc.

The core issue is simply that SAS Group is a very difficult entity to reform.

One example would be the union, or rather unions. How many unions across the 3 countries is covered within the SAS umbrella, something like 40 different ones? How do you maneuveur effectively within such a setup?

The one overriding problem: The cost base. Whenever SAS does something the competition is simply able to do the same for 20-50% less cost, so the numbers just doesn't add up. Plain and simple as that.

And retooling a company group for such a massive cost cutting is very difficult and invasive, and a lot of the old customers + staff will have a hard time along the way.

In a way it would be much easier to simply dissolve the current SAS and start all over again with a new, lean & mean SAS, designed for todays current airline business climate.
 
scandinavian
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 3:28 am

Quoting Matt27 (Reply 23):
Thai fly the route 5/w all with a B747-400

Since the beginning of November they fly 6/w, Monday is the only day when they do not fly ARN-BKK.
"He was a wise man who invented beer"-Platon
 
scalebuilder
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RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 3:40 am

Quoting Econojetter (Reply 32):
SAS is just SAS.

I have to disagree here. It is one of the most fundamental problems SAS has today. When you market yourself under too many brands, you simply lose track of who your customer is. In the end, your customer can't identify with you. I simply don't think that SAS knows it's target market very well anymore.

As an example, Snowflake was invented as a no frills, low cost airline. SAS has simultaneously introduced a very similar class on their regular flights. There is virtually no differerence between the two. So why maintain two different airlines serving the same customer? Subsidiaries are competing against eachother, and it costs money to maintain different identities (paint, staff, uniforms etc.). After all, this is where money is simply wasted away, and it is hard for management to see this. Egos will come in to play in the boardroom as well.

The SAS Braathens brand may very well be useful for management to track for profit and loss purposes. I know that this can be done without the different paintjob etc. Frivolous costs wasted away again.

When you see a lot of overlap between market segments in an organization, it should be a cause of concern. It is a strong symptom that there simply isn't any clear strategy present, and that a CEO is in charge who simply isn't up to the job.
Go the extra mile......and avoid the traffic!!!
 
Maersk737
Posts: 654
Joined: Sun Feb 22, 2004 3:37 am

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 3:45 am

They dont have any Snowflake airline anymore....

SAS have to bring down the cost, before they can bring up the visions.

Cheers

Peter
I'm not proud to be a Viking, just thankfull
 
Doona
Posts: 3382
Joined: Fri Feb 18, 2005 9:43 am

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 3:48 am

Quoting Scalebuilder (Reply 24):
I wish Gordon Bethune had a European counterpart. That person could get this airline on track and with results to prove it.

What's Jan Carlzon doing nowadays? We want him back!

Cheers
Mats
Sure, we're concerned for our lives. Just not as concerned as saving 9 bucks on a roundtrip to Ft. Myers.
 
scalebuilder
Posts: 605
Joined: Thu Nov 24, 2005 10:32 pm

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 3:51 am

Quoting Hodja (Reply 34):
Not intending to side with Jørgen Lindegaard in any way, but I think he's up against almost insurmountable forces

He needs to step down in favor of someone who could effectively deal with this. If you can't get the job done, you need to move on. Scandinavia needs SAS to be around. There is plenty of identity for this company to rebrand itself in the markets that it serve. We just need to get out of this "serving a little bit of lowcost" and "a little bit of long haul" mentality. A firm and crisply defined SAS needs to emerge.
Go the extra mile......and avoid the traffic!!!
 
windshear
Posts: 2261
Joined: Tue Mar 14, 2000 4:45 pm

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 3:52 am

ok!
I have heard the opposite thing, that SK was loosing money on trying to combat the European string of airlines.
I have heard that the one thing they were making money on, was intercontinental flying.

I might be wrong, as I remember about 10 months ago SAS mentioned that they felt that getting rid of their 67s so fast was a mistake, and that they had problems making money with the A340/A330s also with their A321s...

I think they are just in dire straits, even though they will exit 05 with a plus for the first time in many many years.

Think it is all so confusing.

Boaz...
"If you believe breaking is possible, believe in fixing also"-Rebbe Nachman
 
Maersk737
Posts: 654
Joined: Sun Feb 22, 2004 3:37 am

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 4:03 am

Quoting Doona (Reply 38):
What's Jan Carlzon doing nowadays? We want him back!

He did bring the airline up, and down again  Smile

Quoting Scalebuilder (Reply 39):
Quoting Hodja (Reply 34):
Not intending to side with Jørgen Lindegaard in any way, but I think he's up against almost insurmountable forces

He needs to step down in favor of someone who could effectively deal with this. If you can't get the job done, you need to move on.

I do not agree with that....And I am a best armchair-CEO on A.net bigthumbsup 

Cheers

Peter
I'm not proud to be a Viking, just thankfull
 
panamandy
Posts: 94
Joined: Wed Mar 02, 2005 12:32 am

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 4:14 am

vikings

one thing is for sure, if sas fails one day, one of the best and innovative airlines wl be gone!

their problems is the burden of the past! sas was/is a good employer so there employees stay with them for the whole life and the mature you become the more money you earn or cost! to give up priviliges hurts everybody and nobody want to give anything up, i would cry foul very loud!

the last time i was in stockholm sas invited me to fly onboard their betsy dc3 from bromma that was something, better than s.x!

the cost thing in sweden is hard to understand at least for me, the taxi from downtown to arn cost 500sek and a flight from arn to ham was advertised for 89sek, i used the train which is much quicker and cheaper but still more than the airfare.

isnt there also some dogfight between ay and sk with airbotnia and this flynordic which they only run to hurt each other and are losses for both?

i flew sas to gru,lax,ord,jfk,ewr,osl,cph,arn,hel,got,kir and never experienced any service failure!

i truly hope that they make it!

go vikings go

panamandy
 
scalebuilder
Posts: 605
Joined: Thu Nov 24, 2005 10:32 pm

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 4:47 am

Ending note from me on this topic...

I haven't even touched on the fleet selection of SAS. Puzzles me just as much as their lack of business strategy.They are interconnected. Poor choices for the routes that they serve. They should have kept their 767s and not ordered from Airbus at all. I have flown their Airbuses and have enjoyed it, but the airline is suffering because the economics are simply not there.

Someone out there must have been pretty impulsive when decision time was upon them. You could start to wonder if anyone one with understanding of numbers was involved when the choices of aircraft was made.

I am truly worried about this airline. It represents the viability of a hard working, technology savy, and important part of this world. SAS makes sense for Scandinavia. Hope to see this airline around, but under new management with new visions.
Go the extra mile......and avoid the traffic!!!
 
thepilot
Posts: 1191
Joined: Fri Jan 08, 2010 2:34 am

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 5:03 am

Quoting Stitch (Reply 28):
I hear our SEA-CPH flight is one of the best moneymakers in the system. No clue if it is true.

I believe this is true. I have flown SEA to CPH twice, and both times, to and from, the flight was completely full. From what I hear at SEA, this route is a definite moneymaker. I guess a full plane does translate into profit on this route. Might not be true in all cases though.
From YVR
 
persotvik
Posts: 265
Joined: Wed Nov 24, 1999 12:38 am

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 5:37 am

The problem is that SK don't have enough longhaul traffic to make up for the losses on the European network. Finally the Norwegian division is back into the black.

A good example is BA. They loose money on European operations but their longhauls are highly profital.......much the same with LH, very strong longhaul traffic with high yields on many sectors.
Just love flying
 
scalebuilder
Posts: 605
Joined: Thu Nov 24, 2005 10:32 pm

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 5:41 am

Quoting Scalebuilder (Reply 43):
From what I hear at SEA, this route is a definite moneymaker.

Even though the flight is full does not make the flight is a moneymaker. SAS used to fly to NYC from Oslo with full flights too, but lost money on that effort. It is now abandoned. SAS seemed to be particularly dependent on the business class traveler. If business class is empty, and economy is full, profitability is marginal for that flight. Margins could actually be negative as a result.

Continental can fly the same route and make money. I am really glad we finally got an airline that can serve North-america profitably with a route to Oslo. At the end of the day, profits emerge on how well you can contain costs.

Despite your statement, SAS may very well lose money on this route from Seattle.
Go the extra mile......and avoid the traffic!!!
 
RedChili
Posts: 1440
Joined: Wed Jul 27, 2005 9:23 am

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 7:10 am

What I'm really concerned about is that SAS may turn into a mere feeder airline for Lufthansa's long haul flights. I already have the impression that this is happening.

Quoting Scalebuilder (Reply 36):
As an example, Snowflake was invented as a no frills, low cost airline. SAS has simultaneously introduced a very similar class on their regular flights. There is virtually no differerence between the two.

Snowflake is now basically only a web site where SAS sells tickets for the last few rows in economy.
Top 10 airplanes: B737, T154, B747, IL96, T134, IL62, A320, MD80, B757, DC10
 
scalebuilder
Posts: 605
Joined: Thu Nov 24, 2005 10:32 pm

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 7:42 am

Quoting RedChili (Reply 47):
What I'm really concerned about is that SAS may turn into a mere feeder airline for Lufthansa's long haul flights. I already have the impression that this is happening

You see, Lufthansa has done it's homework. They have their strategy that SAS lacks. Do you see low cost subsidiaries around that compete directly against Lufthansa? I do not think that we do.

This is the problem with SAS. They have decided to compete against themselves. These guys in the boardroom need to get their act together and pick up on how to manage and run a successful airline. If they can't, they simply should go to be replaced along with their CEO.
Go the extra mile......and avoid the traffic!!!
 
CPH757
Posts: 652
Joined: Fri Sep 09, 2005 11:40 pm

RE: SK To End Intercontinental Flights In 10 Years?

Fri Nov 25, 2005 8:33 am

I'm quite surprised by the topic and many of your comments about the status of the SAS organization and the CEO.

The fact is that SAS has undergone a huge reorganization the lasts years, which large reductions in staff and costs. The concept has been changed a couple of times, but it seems that they have found the right one now, which is indeed simple. This has lead to black numbers on the bottom line again, and we are all curious to see if it is consistent.

In my opinion Jørgen Lindegaard has done a fantastic job. It is never an easy task to reorganize such a large company successful. He has taken many unpopular decisions and conflicts with unions.

For now SAS has to focus on getting a stable bottom line. The next project could very well be to expand their long haul business. Finnair are having a huge success with HEL as a gateway to Asia. SAS could turn CPH into the same, but taking advantage of many more connections to Europe than Finnair.
Last flight: SAW-CPH on H9 on 02/11/09 - Next Flights: 23/12/09 CPH-AAL on QI, 30/12/09 CPH-LHR on SK, 19/01/10 CPH-CDG-

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