Key figures from the SAS Group's year end report published today:
· Income before capital gains and nonrecurring items amounted to MSEK
114 in 2005, an earnings improvement of MSEK 1 815.
· The Group's total operating revenue rose 6.5% to MSEK 61 887 for 2005.
· The Group transported a total of 34.9 million passengers, an increase
of 8% compared with 2004.
Earnings of MSEK 114 are in line or slightly better than market expectations (SME Direkt MSEK 120 and Reuters MSEK 20).
Jørgen Lindegaard, President and CEO of the SAS Group, comments:
-Turnaround 2005 comprising savings of SEK 14 billion was completed as planned. The unit cost has fallen by over 30% since 2002. After five years of sweeping changes, the SAS Group posts positive earnings before capital gains and nonrecurring items, an earnings improvement of SEK 1.8 billion compared with 2004. Scandinavian Airlines' new business models have strengthened competitiveness with improved cabin factors but weaker yield.
Despite powerful measures, further cost savings must be made to ensure long-term competitiveness in several of the Group's units. The SAS Group has, as communicated earlier, initiated new cost-cutting measures corresponding to SEK 2 billion.
Moderators: richierich, ua900, PanAm_DC10, hOMSaR
RE: SAS Back In Black - Positive Result For 2005
Come on, don't believe the spin - buried in the full document is the minor issue of Scandinavian Airlines making an operating loss in Sweden, Denmark, and on the international services. Only SAS Braathens is making much of an improvement.
Lindegaard says that the mainline airline biz is still unprofitable which means more cost cuts are on the way.
Lindegaard says that the mainline airline biz is still unprofitable which means more cost cuts are on the way.
RE: SAS Back In Black - Positive Result For 2005
Buying Braathens seems like a gold mine to SAS. I hope they will get the airlines back on track.
RE: SAS Back In Black - Positive Result For 2005
Then came 2006, and down into the drain it went...
RE: SAS Back In Black - Positive Result For 2005
Braathens is the reason why there are black numbers in SAS today
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- scalebuilder
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RE: SAS Back In Black - Positive Result For 2005
| Quoting Heisan67 (Reply 5): Braathens is the reason why there are black numbers in SAS today |
Yep. SAS Norway the only profitable segment in the SAS family (official results reported by both SAS Braathens and Wideroe). Results of both Danish and Swedish operations running way red again.
The losses in Sweden and Denmark have been blamed on the stronger presence of low-cost carriers there. Credible excuse. This, however, does not explain why SAS long haul operations continue to rake in losses. High cost base the most likely reason, but there must be more to the story for it to make any sense. There are no long-haul low cost operators serving CPH.
RE: SAS Back In Black - Positive Result For 2005
And Norway is the only SAS hub with no long haul SAS flights - ironic!
RE: SAS Back In Black - Positive Result For 2005
Longhaul flights are problematic for countries not having a sufficient home market. Good examples are the Scandinavian countries, Switzerland and Austria (there are more of course).
Longhaul fleets are very costly, but income is low (the more connecting traffic you need, the less).
But anyway, good to see the company can generate money elsewhere!
Regards,
RJ100
Longhaul fleets are very costly, but income is low (the more connecting traffic you need, the less).
But anyway, good to see the company can generate money elsewhere!
Regards,
RJ100
RE: SAS Back In Black - Positive Result For 2005
Unfortunately SAS do not have the best aircraft size/types for long haul flights from eg Oslo.
As most airlines have discovered (SAS Braathens too) - most travellers prefer travelling nonstop.
Hopefully SAS will dicover it too.
So far - Continental have success with their OSL-EWR service, and PIA from Oslo to Islamabad/Lahore/Karachi.
As most airlines have discovered (SAS Braathens too) - most travellers prefer travelling nonstop.
Hopefully SAS will dicover it too.
So far - Continental have success with their OSL-EWR service, and PIA from Oslo to Islamabad/Lahore/Karachi.
RE: SAS Back In Black - Positive Result For 2005
Well then there will be one there ;=)
RE: SAS Back In Black - Positive Result For 2005
The price SAS charge for a sandwich or a cup of coffee on their intra European flights, Im not suprised to hear they are making profit.
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- sorayafaradiba
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RE: SAS Back In Black - Positive Result For 2005
| Quoting Heisan67 (Reply 9): Unfortunately SAS do not have the best aircraft size/types for long haul flights from eg Oslo. As most airlines have discovered (SAS Braathens too) - most travellers prefer travelling nonstop. Hopefully SAS will dicover it too. So far - Continental have success with their OSL-EWR service, and PIA from Oslo to Islamabad/Lahore/Karachi. |
SAS should try to operate the A319 on OSL-EWR and or OSL-ORD (UA hub!). LH, LX and KL seem to be successful with these flights.
RE: SAS Back In Black - Positive Result For 2005
A319 OSL-EWR? Isn't that a bit to long distance for A319?
SAS Braathens operate only B737 (400-500-600-700-800)
The problem for SAS is that their long haul fleet consists of to large aircrafts
SAS Braathens operate only B737 (400-500-600-700-800)
The problem for SAS is that their long haul fleet consists of to large aircrafts
RE: SAS Back In Black - Positive Result For 2005
Thats right. The 757 or even 763 would have been ideal for a few long haul routes from Oslo. I think its a disgrace that SK offer no long hauls from Norway.
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- sorayafaradiba
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- scalebuilder
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RE: SAS Back In Black - Positive Result For 2005
| Quoting Orion737 (Reply 17): Thats right. The 757 or even 763 would have been ideal for a few long haul routes from Oslo. I think its a disgrace that SK offer no long hauls from Norway. |
With all the turbulence related to union unrest within SAS recently (and historically too), I bet most Norwegians would prefer that Continental continues to serve their only long-haul. They are doing a good job.
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- Tango-Bravo
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RE: SAS Back In Black - Positive Result For 2005
| Quoting Scalebuilder (Reply 6): Yep. SAS Norway the only profitable segment in the SAS family (official results reported by both SAS Braathens and Wideroe). Results of both Danish and Swedish operations running way red again. |
How can this possibly be?
Isn't competition supposed to be a zero-sum game in the world of airline service, where there must be a loser for every winner -- and there absolutely cannot be two winners where head-to-head competition exists -- and especially where the competitior is an eeeeeeeeevil LCC? (at least according to the gospel of the U.S. legacy-lovers) Sounds like SAS Norway/Braathens is doing well, thank you, in spite of meaningful competion from LCC Norwegian Air. Apparently not the same story for SAS Denmark and Sweden where little, if any, serious competition exists in their respective domestic markets.| Quoting Orion737 (Reply 14): The price SAS charge for a sandwich or a cup of coffee on their intra European flights, Im not suprised to hear they are making profit. |
If so, sufficient demand at the prices charged is obviously "there;" no demand = no profit regardless of margin per unit (not) sold.
RE: SAS Back In Black - Positive Result For 2005
| Quoting Tango-Bravo (Reply 20): Apparently not the same story for SAS Denmark and Sweden where little, if any, serious competition exists in their respective domestic markets. |
In Sweden there are manyh competitors for SAS. You've got Flyme, flynordic, Malmø aviation to mention some. Sterling operates out of Sweden. In Norway you practical only got Norwegian on the domestic market.
But strange to see that SAS Braathens is doing that well, and SAS Danmark/Sverige are getting red numbers. Don't forget that SAS Danmark has had to reduce traffic since SAS Braathens, and not to mention Norwegian, have launched many new international routes from Norway. Previously SAS flew almost all Norwegian passengers to Copenhagen, and then out in Europe. No we don't need that extra stop (the duty free shop at CPH is NOT happy) and get to our destination on SAS Braathens/Norwegian much faster.
RE: SAS Back In Black - Positive Result For 2005
Heisan67 is right, the situation in Sweden is different, SAS has to compete much harder there, with Flynordic (Finnair), FlyMe, Malmo Av.
Sweden, Norway and Finland all have rather busy domestic markets, all countries are large by area.
Finland's situation is bit same than Norway's, there are only two airlines in domestic business now, Finnair and Blue1 (SAS), serving together around 20 airports. Other companies have not succeeded, markets too small after all?
Sweden, Norway and Finland all have rather busy domestic markets, all countries are large by area.
Finland's situation is bit same than Norway's, there are only two airlines in domestic business now, Finnair and Blue1 (SAS), serving together around 20 airports. Other companies have not succeeded, markets too small after all?
RE: SAS Back In Black - Positive Result For 2005
SAS Braathens route network:
http://www.sasbraathens.no/WCM/templates/IFrame.aspx?id=26
Widerøe network (100% owned by SAS):
http://www.wideroe.no/modules/module...yType=2&iCategoryId=42&iInfoId=248
Norwegian route network:
http://www.norwegian.no/sw181.asp
http://www.sasbraathens.no/WCM/templates/IFrame.aspx?id=26
Widerøe network (100% owned by SAS):
http://www.wideroe.no/modules/module...yType=2&iCategoryId=42&iInfoId=248
Norwegian route network:
http://www.norwegian.no/sw181.asp
RE: SAS Back In Black - Positive Result For 2005
Cool, SAS makes profit. So lets buy A340-600s, 777s, MD11s, more A319, 737NG, RRJ to get more airplane types!!!
Or maybe they could introduce some F100 into the fleet...
But seriously, it is nice to see SAS making a profit again. I always enjoyed flying them.
Or maybe they could introduce some F100 into the fleet...
But seriously, it is nice to see SAS making a profit again. I always enjoyed flying them.
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- Tango-Bravo
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RE: SAS Back In Black - Positive Result For 2005
| Quoting Heisan67 (Reply 21): In Sweden there are manyh competitors for SAS. You've got Flyme, flynordic, Malmø aviation to mention some. Sterling operates out of Sweden. In Norway you practical only got Norwegian on the domestic market. But strange to see that SAS Braathens is doing that well, and SAS Danmark/Sverige are getting red numbers. |
Thank you for making this valid point. I will confess that I was not previously aware of the extent of Sweden-based LCC competition with which SAS Sverige must contend, both within Sweden and to the rest of Europe.
My reply concerning the profitibilty of SAS Braathens in spite of serious, direct competition from LCC Norwegian Air was meant to dispel the widely-held myth (at least in the U.S.) that it is impossible for a legacy/established airline and LCC competitor to co-exist, much less for both to be profitable at the same time. SAS Braathens and Norwegian Air demonstrate that it is possible for both types of airlines to be profitable while operating very similar route networks in which they directly compete on many routes -- if both stay focused on their resepctive strengths instead of following the U.S. legacies' tendency to try to be all things to all people in response to LCC competition.
RE: SAS Back In Black - Positive Result For 2005
| Quoting Tango-Bravo (Reply 26): My reply concerning the profitibilty of SAS Braathens in spite of serious, direct competition from LCC Norwegian Air was meant to dispel the widely-held myth (at least in the U.S.) that it is impossible for a legacy/established airline and LCC competitor to co-exist, much less for both to be profitable at the same time. SAS Braathens and Norwegian Air demonstrate that it is possible for both types of airlines to be profitable while operating very similar route networks in which they directly compete on many routes -- if both stay focused on their resepctive strengths instead of following the U.S. legacies' tendency to try to be all things to all people in response to LCC competition. |
OK sorry - was not aware that Americans have trouble beliving it is possible for both LCC operators and established airlines to co-exist and make money at the same time.
In Norway that is very much possible :=)
| Quoting TheSonntag (Reply 25): But seriously, it is nice to see SAS making a profit again. I always enjoyed flying them. |
Yes it is nice. However it is rather alarming that SAS Sweden/SAS Denmark/SAS international are NOT making money. SAS Braathens in Norway is once again making up for the "mess". For how long I wonder...is SAS becoming 3 totally individual companies at the end.....back to frame no 1 then!
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- Tango-Bravo
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RE: SAS Back In Black - Positive Result For 2005
As a matter of curiousity with regard to SAS Braathens' positive financial results, does anyone know how routes within Norway perform financially in comparison to their routes to European points outside of Norway?
RE: SAS Back In Black - Positive Result For 2005
| Quoting Tango-Bravo (Reply 28): |
I belive both their domestic and international routes are doing well.
More info about this at http://www.sasgroup.net
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- scalebuilder
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RE: SAS Back In Black - Positive Result For 2005
| Quoting Tango-Bravo (Reply 26): My reply concerning the profitibilty of SAS Braathens in spite of serious, direct competition from LCC Norwegian Air was meant to dispel the widely-held myth (at least in the U.S.) that it is impossible for a legacy/established airline and LCC competitor to co-exist, much less for both to be profitable at the same time. SAS Braathens and Norwegian Air demonstrate that it is possible for both types of airlines to be profitable while operating very similar route networks in which they directly compete on many routes -- if both stay focused on their resepctive strengths instead of following the U.S. legacies' tendency to try to be all things to all people in response to LCC competition. |
Well...lots of interesting points in this post. The Norwegian market is much smaller and also very different from the US market. Most Norwegians fly because of necessity, many Americans do so because of the convenience. The automobile in the US is much more competitive to air travel than in Norway (ferry across all those fjords and difficult weather crossing all those mountains - in the end a very expensive alternative). I don't think SAS Braathens and Norwegian are that different when it comes to the customer that they both serve. Domestic flights with both in one single class. Hard to distiguish one from the other.
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