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Britair
Topic Author
Posts: 900
Joined: Fri Aug 27, 1999 3:50 am

SAS To Be Split Into 11 Separate Airlines

Mon Dec 01, 2003 11:32 pm

The SAS Group will be divided up into 11 separate airlines to get a better overview over the individual companies.

Currently comprising five airlines including Scandinavian Airlines, Braathens, Wideroes, Blue 1 and Spanair, the group will be split into 11 separate airlines shortly, confirmed SAS Information Director Hans Ollogren.

Air Baltic, Estonian Air and Snowflake will come under the SAS umbrella, while today's SAS will be divided up into three national airlines for each of the three Nordic countries, plus an intercontinental operator.

The reorganisation to more and smaller units with their own accounts is a central element in the SAS cost cutting plan "Turnaround 2005", reported the Norway Post.

Turnaround 2005 aims to reduce costs by 14 billion Norwegian krone (£1.19bn) by the year 2005.

Source http://norwaypost.no



[Edited 2003-12-01 15:33:40]
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: SAS To Be Split Into 11 Separate Airlines

Mon Dec 01, 2003 11:38 pm

This has got to be a joke... I cant imagine money can be saved by setting up ELEVEN individual airlines.
Yours truly - StarFlyer
 
RJ100
Posts: 3904
Joined: Wed Nov 22, 2000 1:37 am

RE: SAS To Be Split Into 11 Separate Airlines

Mon Dec 01, 2003 11:56 pm

Hello

Sounds strange indeed...

What about Cimber Air? Are they independent from the SAS Group?

Regards,
RJ100
none
 
tavve
Posts: 169
Joined: Thu Sep 04, 2003 4:24 pm

RE: SAS To Be Split Into 11 Separate Airlines

Mon Dec 01, 2003 11:57 pm

Are they insane or haven't we heard the entire story?

Assume a passenger wants to fly from ARN to NRT. The new national Swedish airline will probably try to make the passenger fly via e.g. the Star Alliance hub FRA since they probably will make more profit than if they fly the same passenger to Copenhagen, which is a very short distance.

The new intercontinental airline, flying from Copenhagen, will lose the passenger. The feeding traffic to CPH will get lost!  Confused
GOT, that's where I live
 
N754PR
Posts: 2909
Joined: Mon Oct 04, 1999 10:03 pm

RE: SAS To Be Split Into 11 Separate Airlines

Mon Dec 01, 2003 11:59 pm

A very ODD idea, can't see how this will work.
Bush, your a sad, sad man.
 
Bryston
Posts: 132
Joined: Fri Mar 09, 2001 5:46 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 12:00 am

Isn't the opposite of what the market is aiming to? Regrouping and fusioning? At first sight, it seems strange, but we'll see.....
I'd rather be flying...
 
Gnomon
Posts: 894
Joined: Thu Jun 03, 1999 12:38 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 12:31 am

Another example of overthought and overcomplication.
 
CanadianNorth
Posts: 3275
Joined: Sat Aug 24, 2002 11:41 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 12:32 am

I woulda thought 1 airline would be smarter than 3... 1 management, 1 fleet, 1 livery, and so on would simplify it thus making it easer for a profit no?


CanadianNorth
HS-748, like a 747 but better!
 
sevenair
Posts: 2983
Joined: Sun Feb 04, 2001 7:18 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 12:33 am

Maybe like the 'miniflots' which came from Aeroflot when it dispanded-or whatever you call it-cant see the need to make 1 airline into 12-administrative nightmare!
 
Guest

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 12:38 am


I have serious doubts whether this would happen. Like everyone else has said the norm now has become centralisation and merging, not the opposite. Things would be less efficient if they split up, and its unlikely they will actually make money out of it.

Have they given a reason why they plan to do this besides having 'a better overview', which I think they can easily be done if organisation and structure are improved within the airline?
 
Staffan
Posts: 3879
Joined: Tue Mar 18, 2008 9:21 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 12:38 am

Nothing about it on SAS wesite.

Seems odd, very odd..

Staffan
 
gte439u
Posts: 357
Joined: Tue Nov 04, 2003 7:49 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 12:41 am

Does this mean 11 new Star Alliance members? LOL!
 
Guest

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 12:41 am

I think the odds are pretty much against such a move
 
copenhagenboy
Posts: 543
Joined: Fri Sep 14, 2001 11:03 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 2:11 am

I don't think it is that odd, most of the other airlines in the group, are in fact doing very well. The only airline in the group who has difficult in earning money is Scandinavian Airlines, It is a littlebit difficult but there are Scandinavian Airlines (SAS) and The SAS Group. They are trying to make the SAS Airline into some kind of divisions. They want each division to learn something from eg. Spanair. Learn them to earn money. Before SAS Airline flew CPH-Barcelona once a day, it was given to Spanair because they could earn money on it, now they fly twice a day, earning money. They want a kind of competition inside the group, remember they are in a big turnaround, and many flightanalysts are saying SAS is doing what has to be done. That's capitalism  Smile/happy/getting dizzy

PS. Don't forget this is done because the SAS Group don't want to merger as KLM-Air France. They try to survive as their own group. Sometimes it is better to do what you think has to be done, than following the crowd  Smile/happy/getting dizzy

[Edited 2003-12-01 18:24:37]
 
nudelhirsch
Posts: 1371
Joined: Sun Oct 12, 2003 6:20 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 2:15 am

The only senseful reason would be outsourcing and getting rid of parts of the whole group. Which we of course do not want to see happen...
Putana da Seatbeltz!
 
meister808
Posts: 924
Joined: Sat Jan 01, 2000 11:45 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 2:18 am

That is rather retarded... if you don't mind my saying...
Twin Cessna 812 Victor, Minneapolis Center, we observe your operation in the immediate vicinity of extreme precipitation
 
boac707
Posts: 273
Joined: Thu Nov 13, 2003 2:55 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 2:22 am

This has the same footprint as Air Canada..tango, Jazz, Zip, ACJetz...it hasn't done great for them...tango is no longer...11 will never fly, the logistics are just tough complex
smokey classics to the end of time
 
transswede
Posts: 1008
Joined: Fri Sep 21, 2001 9:30 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 2:31 am

I like SAS, but really - this has to be one of the stupidest decisions I have heard about. (If it is true)
 
CRJ'sRule
Posts: 49
Joined: Thu Mar 01, 2001 8:12 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 2:31 am

This is an awfully strange philosophy that SAS is taking up. Might it have something to do with a tax loophole or something on those lines?
 
copenhagenboy
Posts: 543
Joined: Fri Sep 14, 2001 11:03 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 2:35 am

Just lets see how it will work, many years ago, SAS had a Swedish CEO, who said throw down the pyramids, because of him SAS was a really successful airline in many years. He was not looking at what other did, but many did the same after the success
 
Leskova
Posts: 5547
Joined: Wed Oct 08, 2003 3:39 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 3:03 am

If I remember correctly from an interview with the SAS CEO, he mentioned that they would be splitting SAS into different "Profit Centers" (the 3 national airlines and one intercontinental airline) - but they'd still all be run as SAS with essentially one strategy for the whole "conglomerate", while each sub-airline would be left to making decisions that concern their own ops in their own countries.

I think put this way, it makes a bit more sense than really splitting it up into completely separate airlines - but, to be honest, I do question the wisdom behind even this version...
Smile - it confuses people!
 
Guest

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 3:13 am

I think you've all missed the point, which is to enable each business unit to have its own profit and loss account. Nothing unusual about that in large complex organisations. Whilst SAS will financially account for each of its four airline units separately, they will continue at the operational level as one carrier. It's not difficult to understand if you take a step back and think about it rather than just jumping in with ill thought out comments.
 
Britair
Topic Author
Posts: 900
Joined: Fri Aug 27, 1999 3:50 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 4:41 am

I dont think it will be as drastic as it sounds at first, proabaly more along the lines of Qantas. Its reorganisation involved the establishment of ten businesses:

* Four flying businesses:

- Qantas Airlines (the main international and domestic operations)
- QantasLink (the regional airline operations)
- Australian Airlines (the international leisure carrier)
- Jetstar (a domestic low cost carrier)

* Two flying services businesses:

- Engineering Technical Operations and Maintenance Services
- Airports and Catering

Four associated businesses:

- Freight
- Qantas Holidays
- Qantas Defence Services
- Qantas Consulting
 
buckfifty
Posts: 1278
Joined: Tue Oct 16, 2001 4:05 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 5:19 am

And in fact, it is a very good way of cost saving, as management can be more efficiently on a micro level (as individual profit centers). Those units which are unprofitable will weed themselves out, while the profitable ones will stay afloat.

This is much more efficient than shaving costs from an across the board organizational level.
 
copenhagenboy
Posts: 543
Joined: Fri Sep 14, 2001 11:03 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 5:43 am

Nice to know that someone understand the strategy  Smile/happy/getting dizzy, SAS is into a cultural and business change, that will hurt some people and some national feelings, but I think SAS are going to be a strong regional player with their big markets in Scandinavia, the Baltic, Eastern Europe (Russia, Poland) and in the north of Germany.
Being big in that market will also allow SAS to have some good and profitable intercontinental routes........I hope  Wink/being sarcastic
 
kosmonaute
Posts: 87
Joined: Tue Sep 09, 2003 1:32 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 9:57 am

I thought that SAS was established by a signed contract between the three Scandinavian nations, which comes up for renewal every 10 years or so, with another few more years to go before it needed to be resigned. If my memory serves me correct, and this is the case, how could all of this happen within the next two years?
Burning airlines give you so much more.
 
leviticus
Posts: 1016
Joined: Sat Oct 27, 2007 7:34 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 10:03 am

Yes I read about this earlier this morning, I think the idea sucks. It's not just very wired but company's use to solve economic crisis the OTHER WAY.
 
bobrayner
Posts: 2038
Joined: Sun Apr 27, 2003 8:03 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 10:22 am

Here's a good summary of the SAS position... (including "Turnaround 2005"):
https://www.scandinavian.net/12208/1Teleconference_3q03.pdf
Cunning linguist
 
Sydscott
Posts: 3513
Joined: Thu Oct 30, 2003 11:50 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 10:36 am

I would just reiterate what Britair has said.

I think this is very workable and will allow SAS to micro manage itself better with each new business unit responsible for its own staff, budgets, balance sheet and profit targets. By breaking SAS up into parts for reporting purposes, it also gives the employees of the separate business units a better idea of exactly what they, and their unit, are contributing to the business as a whole and it means that individual business units can be singled out for reward if they are performing well or restructuring if they are going badly. It also makes the managers of the units more accountable to the board and senior executives and makes it easier for them to be rewarded, (or replaced), as the case may be. This practice is used by a large number of industrial conglomerate type companies around the world to separate their businesses into distinct operating units in order to more easily examine their performance. Its merely an adoption of the "sum of the parts is greater than the whole" principle.

It shouldn't make any difference to the flying operations of SAS whatsoever.
 
BA
Posts: 10516
Joined: Fri May 19, 2000 11:06 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 12:52 pm

This is an absolute shock and I have to say I am quite disappointed....
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
JumboBumbo
Posts: 168
Joined: Fri Aug 22, 2003 1:17 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 1:02 pm

Hey if it worked for Lucent... oops! It didn't really work for Lucent, now did it? I hope this is a joke, but if it is I'm not laughing.
 
Sydscott
Posts: 3513
Joined: Thu Oct 30, 2003 11:50 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 1:33 pm


It may not have worked for lucent but QF is using the same sort of thing right now as are companies like GE and Disney. Each of these have split their businesses into separate units in order to improve performance, hold down costs and ultimately improve profits. This is more of a financial and accountability tool. SAS isn't proposing to actually split up in reality. There is nothing wrong with it. Some of you people are too alarmist.  Nuts
 
copenhagenboy
Posts: 543
Joined: Fri Sep 14, 2001 11:03 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 4:13 pm

I really don't know why any passenger should be disappointed. Every company as well as any airline have their own way of building their organization. Depending on the market and the surroundings. I can understand that the employer can fell some fear in their stomach (I have tried it in a same same situation). But how could the customers buying our products care?

[Edited 2003-12-02 08:13:55]
 
connector4you
Posts: 770
Joined: Wed May 16, 2001 10:27 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 4:54 pm

Swiss, Sabena, KLM . . . SAS . . . Its eleven little crumbs will likely end up being sucked easier and faster into somebody else's turbofans . . . just a matter of time.

 
FBU 4EVER!
Posts: 980
Joined: Sat Jan 27, 2001 6:53 am

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 9:43 pm

We,as SAS employees,are already feeling the effects of having several independent airlines within the group.The splitting-up of SAS into 11 independent units is mainly being done to set large groups of employees up against one another in order to create "internal" competition and thus lower costs.I'm afraid that if these groups accepts this strategy,then all wage-,work- and social benefits will be at a "stoneage" level before long.
It seems that SAS' greatest competition will come from within and thus lose oversight of what the "real" competitors (BA,AF,etc.) are doing.
In addition,it will create a lot of new jobs for management,the final result being that SAS will continue to have some 300 employees per aircraft.That just doesn't make sense!
"Luck and superstition wins all the time"!
 
copenhagenboy
Posts: 543
Joined: Fri Sep 14, 2001 11:03 pm

RE: SAS To Be Split Into 11 Separate Airlines

Tue Dec 02, 2003 11:11 pm

I understand your worries, but come on: "then all wage-,work- and social benefits will be at a "stoneage" level before long" -
your are living in one of most wealthiest country in the world.
 
LastBaron
Posts: 269
Joined: Tue Oct 21, 2003 9:55 am

RE: SAS To Be Split Into 11 Separate Airlines

Wed Dec 03, 2003 1:01 am

Not to change the focus of the thread, but why did Spanair stop flying to the U.S.? They flew from IAD to BCN for a while and flights were full and also very inexpensive... what happened? Can you shed light on that?
 
amhilde
Posts: 628
Joined: Thu Oct 23, 2003 5:01 am

RE: SAS To Be Split Into 11 Separate Airlines

Wed Dec 03, 2003 7:19 am


Denmark isnt exactly poor either though CPHboy- and ive been to both NO and DK several times. Stoneage levels eh? Kinda like what we have in the US?  Smile

Ill agree with FBU 4Ever here on this one- i can see the idea of internal competition, but will they all be reporting seperately or udner the SAS umbrella, to investors? Are there some airlines that have overlapping and competing lines so that they end up cannibalizing from each other, and affecting the balance sheets anyway? It just seems like this will develop into an overburdened middle-upper management situation where plenty of money is funnelled UP the chain rather than consolidate and eliminate unneeded positions to save money and lower the fares. But i havent any background on Scandi labor law at all  Smile
Hang on tightly, Let go lightly
 
CPH-R
Posts: 6165
Joined: Thu May 03, 2001 5:19 pm

RE: SAS To Be Split Into 11 Separate Airlines

Wed Dec 03, 2003 7:31 am

Amhilde, most people have nothing else to do than critisize out system in one way or another, so I guess it's already at the stone age level  Laugh out loud - though it makes me wonder what I pay my 40% taxes for  Insane - oh, and we could have been richer if it wasn't for some VERY stupied minister who decided to give Norway all the nice oil fields in the North Sea  Angry

As for the idea of splitting SAS up, I think it's a good idea, since it'll make it easier for the SAS group to find the money losing areas and make them more effective.

As for labor laws, ugh, I haven't got a clue about them, all I know is that those are one of "no-go areas" if a politician wishes to keep his seat in the parliament.
 
mlsrar
Posts: 1384
Joined: Thu Mar 09, 2000 7:41 am

RE: SAS To Be Split Into 11 Separate Airlines

Wed Dec 03, 2003 7:35 am

though it makes me wonder what I pay my 40% taxes for

I'd have to say I am in envy of countries with state-funded health care and universities  Smile

I mean, for the right price I’ll fight a lion. - Mike Tyson
 
Sydscott
Posts: 3513
Joined: Thu Oct 30, 2003 11:50 am

RE: SAS To Be Split Into 11 Separate Airlines

Wed Dec 03, 2003 8:18 am


FBU & Amhilde - I can't see where all of these new management jobs are going to come from?? The whole point of restructuring into separate business units is to ensure that SAS's business, and consequently management structure, revolve around their flying operations and not the other way around.

You will not find new managers being employed by SAS, rather existing managers will be redeloyed to the new business units and assume new responsibilities. This makes them more accountable for their performance and doesn't allow them to hide in Head Office. It is also an easy way for SAS to reduce the size of its head office and weed out any dead wood they have in their management ranks. It is not a breakup of the airline in any way, shape or form. Rather it re-positions separate flying units, under the SAS banner, into its different major city markets to allow them to respond more rapidly to competition and to provide market specific service levels.

SAS may not want to publish the financial results of its separate flying units. Why would you give your competitors the opportunity to look at how much money your making in individual markets??? You wouldn't because it would just be an invitation for another airline to come in destroy your profitability.
 
prebennorholm
Posts: 7136
Joined: Tue Mar 21, 2000 6:25 am

RE: SAS To Be Split Into 11 Separate Airlines

Wed Dec 03, 2003 8:20 am

I think that this will have practically no effect on us as SAS customers. They will build 11 more or less separate business units. What large company in any business hasn't already made about a dozen separately accountable business units years ago?

But in any case SAS will change a lot in the near future. They have been very reluctant to change to the fact that they are now facing real competition. LCCs are eating up their revenue at a dramatic pace on many of their previously very profitable routes.

They will have somehow to get the production costs down on level with the competition. The time when businessmen en masse shed $7-800 for a CPH-ARN roundtrip is definitely over. To be profitable in the future they will have to adjust costs or find a more profitable business, shipping or trucking or whatever. Either that or it will be Sabena/Swissair all over again.

Hopefully they will make the "turn around" in time.
Always keep your number of landings equal to your number of take-offs
 
CPH-R
Posts: 6165
Joined: Thu May 03, 2001 5:19 pm

RE: SAS To Be Split Into 11 Separate Airlines

Wed Dec 03, 2003 8:38 am

Preben, unlike SN & SR, I do believe that SK have managed to survive for a while without the states paying  Wink/being sarcastic

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