Last week, there was a discussion on a.net about SAS long haul flights on https://www.airliners.net/discussions...general_aviation/read.main/2478352 . Yesterday, Boarding.no released some more information in an article headlined "SAS loses approximately 100 million on Bangkok route."

The article is available in Norwegian on http://www.boarding.no/art.asp?id=19435

Some of the main points in the article were:

* SAS is losing 100 million kroner on the Bangkok route this year. (The article didn't specify which currency, but I assume it's SEK, since the SAS accounting is made in SEK.)

* The flights to BKK, SIN and SEA are "hanging on a thin thread," meaning that they're likely to be cut away soon.

* SAS might introduce closer cooperation with Thai (I guess that this means codeshares on CPH-BKK, ARN-BKK and BKK-SIN).

* Flights to BKK are full (and they still lose SEK 100 million!!!), but flights to SEA have fewer passengers than expected.

Quoting RedChili (Thread starter): Flights to BKK are full (and they still lose SEK 100 million!!!)

Full flights do not necesarilly indicate profitable flights. The competition on Europe to Thailand is huge (out of my head with KL, AF, BA, LH, SK, AY, OS, SR, SU, QR, RJ, EK, EY, LY, GF, TG, SQ, BR, CI, MH, QF , add to that the numerous charters flying Europe-Thailand). I would think that most seats are sold at rock bottom prices in Y and that C is filled with FF spending their miles earned on other routes in C.

Quoting Manni (Reply 1): KL, AF, BA, LH, SK, AY, OS, SR, SU, QR, RJ, EK, EY, LY, GF, TG, SQ, BR, CI, MH, QF

You forgot CX  

CPH-SEA is not profitable? When they pulled out of LAX (ostensibly for not being profitable) in 1994 they later applied a little more arithmetic and concluded that it was making money when all connection traffic was factored into the equation. I hope they won't make the mistake again.

Hi!

It's for me quite strange to see an airline like SAS getting weaker and weaker! I grew up seeing this airline has one of "those monster" in air travelling, flying to almost any place in the world, with a great long-haul fleet, etc. etc. And now what I see is them closing more and more long haul routes, and that's really strange!!! How many A330's and A340's they have now???
Regards

Quoting CV990 (Reply 4): It's for me quite strange to see an airline like SAS getting weaker and weaker!

-Yes, they really have some problems and don't even suffer the full effects of LCC's like BA,LH and to a lesser extent AF.

I recall years ago SAS predicting that europe would end up with 4 dominant flag carriers, they predicted a to 4 of AF,BA,LH and themselves.

How times have changed, a shame really.

its very strange that SAS cant make money on BKK, while Thai is doing better and better.They fly 6 times weekly to CPH and have upgraded ARN service to 6 weekly from 4 recently.All flights on 747.
They need to open more direct flights from ARN and OSL. While would pax from OSL and ARN want to transfer to limited service out of CPH when they can make one stop to AMS,CDG,LHR,FRA and have the whole world at their feet,usually to a better price to. not to mention KLM s impressive service from AMS to many Norwegian airports.To be honest , i dont think SAS belongs in Star.They should join Skyteam....lol

Quoting CV990 (Reply 4): How many A330's and A340's they have now???

http://www.sasflightops.com/fleet/airbus_registration.html

Fleet Summary
Aircraft in SAS
Airbus A340-300 7
Airbus A330-300 4
Airbus A321-200 8
Boeing 737-600 29
Boeing 737-700 SAS 6
Boeing 737-700 SAS Braathen 9
Boeing 737-800 20
Douglas MD-90 8
Douglas MD-81/82/83/87 series 57
DeHavilland Dash-8-Q400 24
Fokker 50 8
Total number of aircraft 180

Do you think if SAS runs into financial difficulties they will let Spanair go?

The europe to Thailand route is always going to be tough as it's principally leisure. Especially for a carrier flying with a front cabin which isn't generating the loads and yield to justify it. Flying a business class cabin full of upgrades loses tons of cash.

There are regular charter services out of Scandinavia to Thailand too, which are another dilution of the traffic. TG is probably the best option as a codeshare would at least consolidate the business full-fare revenues on one operation.

Quoting BULLPITT (Reply 8): Do you think if SAS runs into financial difficulties they will let Spanair go?

They might. It all depends on the offer price. SAS is also trying to sell their 20% stake in BMI too, but this transaction will likely generate a loss as BMI has been adding losses to SAS consolidated results.

Sincerely,

Scalebuilder
 

H Scalebuilder

That's what I think, the way the market is these days it's a save yourself situations and companies wont hold onto anything that will not provide benefits in the short run for very long. Air Europa have announce a 20M Euro loss so I don't see them giving the company more than one or two yrs of slack before they get rid of them.

To me, this smells more like a campaign to press the unions into even more cuts. They have said recently that they will go into negotiations within the "SAS Intercontinental" company to cut costs. And in the same article they also claimed that they would close several intercontinental routes if the unions didn't agree to huge cuts.
This is typical the SAS way to cut costs, "if you don't do what we demand, we will shut you down". The same thing has happened 2 time at our maintenance base, resulting in the most ridiculous cost-cuts.
And since the longhaul routes is the pride and joy of the SAS employees, I bet this is a effective way for them to put pressure on the unions.
They did the exact same thing to CPH airport also, threatening to move most of its operations if they didn't lower their fees.

I think SAS should either cut all intercontinental routes, or start expanding its intercontinental traffic. The way the company is today, with only 11 longhaul aircraft is too small to make money.

Besides, i'm not surprised the CPH-BKK-SIN route is not doing too well. But probably because of the 2nd BKK-SIN leg. This leg is not doing good at all, because of all the competition they have on it. Mostly when i check this flight, its overbooked to BKK, and only half full BKK-SIN. I'm pretty sure they could fill the aircraft on its return, without having pax from SIN aswell.

Maybe have 2 direct flights CPH-BKK, and CPH-SIN instead of the routing they have today?

Just my   

Leif

[Edited 2005-12-17 17:10:51]

Hi!

I'm quite impressed to see that SAS only have 11 long-haul airplanes, only one more than TAP!!! I think in the past SAS had at least 2 dozens of long-haul airplanes right? I know that in the 80's they had DC-8-62/63, DC-10-30 and even 747-200's!!! I was just looking to JP Airline Fleets in 1982 and take a look:

4 X DC-8-62 - LN-MOG, LN-MOW, SE-DDU, SE-DBG
2 X DC-8-62CF - OY-KTE, SE-DBI
3 X DC-8-63 - OY-KTF, SE-DBK, SE-DBL
2 X DC-8-63PF - LN-MOF, OY-KTG
5 X DC-10-30 - LN-RKA, LN-RKB, OY-KDA, SE-DFD, SE-DFE
3 X B747-283B - LN-AEO, SE-DDL, N4501Q
3 X B747-283B (SCD) - LN-RNA, SE-DFZ, N4502R

22 airplanes!!!! This is just dramatic!!!
Regards

Quoting SKA380 (Reply 12): Maybe have 2 direct flights CPH-BKK, and CPH-SIN instead of the routing they have today?

SAS are about to order a new A340 next year and SIN is a potential destination.

Thank the Lord it is 100 million kroner. Wondered if it was a 100 million passengers for a moment!

Maybe my remark might be very silly, but if they lose money on full flights:

Why on earth don't they raise their fares ??

FB.

If you convert the SEK 100,000,000 loss into US $, its US $ 12.69 million that they've lost on the BKK route alone.

If its such a big loss, might as well suspend flights to BKK and allow TG to fly additional services and codeshare with them.

SAS should look into China and Japan more than SIN.

Quoting WhiteHatter (Reply 9): Flying a business class cabin full of upgrades loses tons of cash.

Very true. As one airline FF program rep once stated succinctly, first (and business) class cabins are "very expensive real estate" for an airline to offer and maintain.

If an airline chooses to offer business and/or first cabins, there is one way, and one way only, to justify the existence of routes where these cabins are offered: maintain high load factors in business and/or first class based on customers who pay business/first class fares. If such is not the case, the alternatives are 1) move aircraft so configured to routes where demand from pax who will pay premium fares to travel in premium class(es) justifies offering premium service, 2) convert aircraft to single class (all economy/coach) configuration, 3) continue to lose money on the route(s) where premium cabins are filled with upgrades and try to make up the difference by cross-subsidizing (airlinespeak for fare gouging) the money-losing route with windfalls from profitable routes.

SAS management is no doubt as aware as I am that #2 alternative above is impractical from an operations standpoint and single class configuration on a route such as CPH-BKK would likely, at the very best, reduce the amount of money they are losing on the route and #3 is virtually impossible since airlines are running out of markets that are profitable enough to subsidize money-losing routes. Therefore, #1 would seem to be the only viable alternative, which for SAS may mean "bye-bye" CPH-BKK. If so, SAS would be able to maintain CPH-BKK on a SK* operated by TG basis. And, as always, BKK along with a vast network of routes throughout the world can also be reached from Scandanivia by way of SK's defacto intercontinental hub at FRA.

For full-service airlines who offer premium cabin, the realites of today's longhaul market mean that even load factors of 100% may not equal profit unless business and/or first class cabins are mostly filled with pax who pay business and/or first class fares. SAS Star Alliance partner Lufthansa, in spite of having costs that are very much at the high end, have been able to turn this reality into a profitable longhaul network, which has meant dropping very high load factor routes such as FRA-PHX-FRA  in favor of routes where their "expensive real estate" is supported by a sufficient number of pax who pay fares that more than cover the higher costs of premium service.

Quoting Flyboy_se (Reply 6): its very strange that SAS cant make money on BKK, while Thai is doing better and better.

Thai doesn't have anyway near the cost for salaries and other personnel-related expenses that SAS has.

If your flights are full and you are losing money, the normal procedure is to raise your fares. SAS is not a cheap airline.

This story doesn't make sense. You could never lose money on full flights.

Quoting Babybus (Reply 20): This story doesn't make sense. You could never lose money on full flights.

Too many economy class passengers, too few business passengers... was the reason why SAS shut down CPH-LAX in 1994.

SK has an interesting price on Business Class if you book early. From SEA - CPH it is $2900 (during summer months!!). I would think this would bring people to business class, and at $2900 it should make money. It doesn't cost the airline that much more to fly a passenger in business class unless you factor in the lost revenue from having less seats in the plane. Usually bubsiness class is around $6,000 during summer months.

The Scandinavian countries have about the highest standard of living in the World. That's great for us, but can be bad for business. It makes us un-competitive since our wages are high, and everything else too. Oslo ranks right up there with cities like Tokyo as far as expenses are concerned.
SK will need to cut costs, plain and simple.

There seems to be a lot of trouble over at SAS.....sad to hear.

Firstly, concerning the SEA-Copenhagen flight, I am shocked....SAS is very well established at SEA, has a loyal following, and faces limited competition at SEA with respect to nonstop services from that city to Europe. I believed that SEA was a solid money-maker for SAS, good loads, good cargo revenue, respectable yeilds, etc. Did something change in recent months or years? With BA adding flights on the SEA-LHR route for the summer 2006 schedule, how can it be that SAS is considering dropping SEA?

Concerning BKK, Thailand is a tough market with lots of leisure pax.....Thailand is a major tourist destination for Scandanavians which means full airplanes and terrible yeilds. That being said, other European carriers seem to do OK with their services to BKK and found the appropriate mix of biz and leisure travel, why cant SAS? That SAS cannot make a profit on the Copenhagen-SIN route is also strange......SIN is oriented to biz traffic. As pointed out above, this is not the first time that we have heard SAS having these kinds of problems, back in the 1990s, SAS flew from LAX to Copenhagen with full and overbooked flights on a daily basis, only to pull the service claiming that it was loosing money on every flight.

Seriously, does SAS have a problem with its yeild management system? Or, have premium pax stopped flying SAS in favor of other STAR alliance carriers? Maybe the discussions that SAS will drop its interncontinental network in the future should be given more merit, as something is very wrong.

The reason is the expenses:

""It is a paradox, that we can not make a positive result, when we are flying with full planes" he says to the newspaper."

Not even the route to Seattle is doing well. You can read that from the monthly figures of flights to the USA.

Other companies have great results on Bangkok. Just ask Finnair and Austrian Airlines, not to mention Thai. For charters My Travel Airways can tell about good results on Phuket.

That is why SAS again is looking at the main problem. It is between 15 to 20 % more expensive for SAS to operate a route to Bangkok and Singapore than for its competitors. That is why Lindegaards is given this serious warning."

[Edited 2005-12-17 19:52:51]

I am leaving tuesday on a CRTWSTAR1 (Round-the-world in Business) and I chose SQ351 CPH-SIN instead of SK since the latter does not offer lie-flat beds.

Next time (mid-2006) the situation will be different: SK will offer a totally upgraded C product with a slightly better seats than SQ.

Don't you think many choose other Star carriers today because of the dated Business Class on the 343/343's?

Quoting Dutchjet (Reply 23): Seriously, does SAS have a problem with its yeild management system?

You would think that they do. It doesn't really seem crystal clear to management of this airline wheather it makes sense to stay in or pull out of a particular market. It is tough to decide but certainly not impossible.

I think this is reflected in their choice of Airbus aircraft for long haul operations too. This choice must have been additive to total operating costs. SAS used to serve the US east and west coast with the 767, and from what I can recall and still understand, there were profits in every route served from every Scandinavian capital.

I honestly think that the real SAS problem is that of operating costs. I just read that the airline is letting go of 300+ pilots. The airline will save millions per year. It is costly to have too much of everything - including pilots.

So to sum it up - SAS has too much of everything - too many companies, too many unions, too many employees, too many brands, and too many aircraft types in its fleet. I am not surprised that this airline can fly with full planes and still lose money.

As a good example they have tried the low cost concept - even on their mainline flights. They somewhat decrease fares, cut back on service and increase flexibility for the traveler. But this will help little if your cost does not decrease enough. All that this will do for the airline is to increase losses unless there is an offset due to increased demand. Demand did somewhat increase from this initiative, but overall profitability increased only marginally.

Strange that their longhaul to BKK is not doing profit.. As I have seen, on the internet and personally in Bangkok (I were there some Weeks ago, so beautiful) the flights were overbooked. Well, rumors say that SK in the future will be a medium to short haul airline, maybe that's good, but sure I will miss the days when Jan Carlzon ruled the airline..

they should have chosen the 777 instead

Quoting AirPacific747 (Reply 28):

Word! The 777 in SK livery would be a great a/c. I like airbus more than Boeing, but the 777 and 787 is not so bad  

A couple of things to mention.
1. The reason SAS pulled out of LAX was the fact that they were selling most of their tickets at a reduced rate. SAS has always seen itself as "The businessmans Airline" and no longer wanted to compete in the low fare Tourist market.
2. Most people at SAS would have prefered the 777 over the A340. The main reason was that they could have had much earlier delivery and larger cargo capacity.
3. If they had bought the 777 and purchased more than the 11 heavies they currently have, they could have created a dedicated CPH BKK and CPH SIN route.
Just my 2 cents

Quoting Malmoaviation (Reply 29): Word! The 777 in SK livery would be a great a/c. I like airbus more than Boeing, but the 777 and 787 is not so bad

I like Boeing and Airbus in different ways. I think that SAS would have been better off with some 787s instead of the A330 and some 777-200s instead of the a343, if they had just kept their 767s a little longer....  

Quoting AirPacific747 (Reply 28): they should have chosen the 777 instead

The typical, stupid and unnecessary A vs B "wars" start with a irresponsible remark like yours, AirPacific747, so please, keep silence if you are unable to contribute something useful in this thread.

Quoting Malmoaviation (Reply 27): Strange that their longhaul to BKK is not doing profit.. As I have seen, on the internet and personally in Bangkok (I were there some Weeks ago, so beautiful) the flights were overbooked

Yes, It's strange. Are the SAS fares a real bargain for travelling BKK??

Quoting BULLPITT (Reply 8): Do you think if SAS runs into financial difficulties they will let Spanair go?

The Spanair-SAS relationship is pretty curious. SAS is always refusing to sell JK, and the Spanish domestic market is more and more a difficult market being IB the main carrier and the LCCs thinking to operate domestic flights within Spain. Por cierto, Bullpitt, te envié un mensaje el otro día ¿no lo has recibido?

oops.. double posting

[Edited 2005-12-17 23:43:20]

it would have been sweet if SAS got the 777 and 757 instead of A330/340 and A321.They could have used the 757s on flights from OSL to EWR .Sort of CO style operation.Maybe even start a GOT-EWR service( i know , i m only dreaming..lol)Then they could have expanded with their 777s to some new and some old markets,like MEX,JNB,GRU,EZE,SCL,LAX,SFO,KUL,Osaka,CAN,YYZ,SYD,DXB......oh well now i am dreaming too much.
and then they could have divided their long haul operation like north America flights from OSL,South America and Africa out of CPH and Asia ond Oceania from ARN.Just imagine a 757 and a 777 in SAS colours..if only....

Quoting Anxebla (Reply 32): The typical, stupid and unnecessary A vs B "wars" start with a irresponsible remark like yours, AirPacific747, so please, keep silence if you are unable to contribute something useful in this thread.

relax pal.. ignore it if you dont like it.. I am sure you are not always objective either. I just shared my opinion with other people in this forum. I didn't bash airbus, so just because you don't like what I am saying doesn't mean I can't tell others how I look at it. It actually can start a useful discussion wether or not the A340 was a good choice

Quoting Anxebla (Reply 32): Por cierto, Bullpitt, te envié un mensaje el otro día ¿no lo has recibido?

have you not read the forum rules or do you choose to ignore them?

[Edited 2005-12-17 23:47:35]

Part of the decision to choose the A330/340s to replace the B767s was the ability for the aircraft to carry two LD3 containers side by side, as opposed to the narrower cargo hold of the 767, only being able to hold one row of containers. This enables SAS to carry more bellyhold cargo then before.

I tried to look up the stats for belly hold 777 v. 340, but neither Boeing nor Airbus has a clearcut presentation for cargo carrying capacity of their respective models.

Quoting AirPacific747 (Reply 35): It actually can start a useful discussion wether or not the A340 was a good choice

Are you insinuating SAS has problems in the BKK route only due to their A340s?? I tell you again: your remark is a irresponsible remark. And I am saying in a friendly way.

[Edited 2005-12-18 00:04:57]

Quoting Anxebla (Reply 37): Are you insinuating SAS has problems in the BKK route only due to their A340s?? I tell you again: your remark is a irresponsible remark.

No I am not. Where am I saying that? I have never even suggested it, so stop putting the words into my mouth... by the way, I am saying this to you in a friendly way  

I think that the A340 is part of the reason why it is not going so well on the BKK route. I heard in the news that SAS has problems with all their intercontinental routes. Another reason to believe that the Airbus planes are part of the reason for that.

[Edited 2005-12-18 00:08:19]

Quoting AirPacific747 (Reply 38): No I am not.

Then, It looks like another thing, or you don't explain yourself in a proper way.

SAS seems to have problems with its intercontinental routes......period. I dont think that the A340 is the problem since SAS specifically upgraded to the A333/A343 since SAS determined that they had outgrown the 763ER on longhaul routes. Maybe the decision to use larger aircraft is the problem. As much as I think that the 777 is an amazing airplane, SAS flying 777s on their longrange routes instead of A343s really would not change much.

SAS has historically purchased mis-sized aircraft for their operations: the 747s came and went in favor of DC10s, the DC10s were downsized to 763s, later the 763s were deemed to small so in came the A330s/A340s which may be too big. Along the way, SAS operated the A300s for a short period of time on European routes and rather quickly eliminated the type, and dont forget that SAS also saw the need for the 762ER for long haul, then dediced that it was too small for long routes and flew them for a while to London, and then dropped that type as well. We also have heard that SAS has determined that the A321s are too big for most european routes, etc, etc. All of this from an airline that has an MD80/MD90/737NG/A321 short to medium range fleet......one has to wonder what is going on.

Quoting Anxebla (Reply 39): Then, It looks like another thing, or you don't explain yourself in a proper way.

maybe you don't understand it in a proper way, because you seem to be the only one having a problem with what I wrote in here..

Quoting AirPacific747 (Reply 38): No I am not. Where am I saying that? I have never even suggested it, so stop putting the words into my mouth... by the way, I am saying this to you in a friendly way I think that the A340 is part of the reason why it is not going so well on the BKK route. I heard in the news that SAS has problems with all their intercontinental routes. Another reason to believe that the Airbus planes are part of the reason for that.

I doubt it is the plane (A340). Other airlines, like AF, do just fine with them.

To put another nail in the coffin, BA announced recently that they would fly LHR-SEA. For people on a budget, that would just suit fine. For those traveling outside the UK it would mean a changeover at LHR. However, for those traveling outside Denmark, it would also amount to a change of planes. When BA delivers its prices, I'll bet they are cheaper than SK and will make money on the flight.

Quoting Flybynight (Reply 42): I doubt it is the plane (A340). Other airlines, like AF, do just fine with them.

yes, some, but then again, I heard that SQ were unsatisfied with theirs. I really enjoy flying the A343, but I think it might have been a bad choice

Anexbla, check out the responses I got. People dont agree with me, but they are not flaming anyone. They are coming with constructive answers to a constructive comment IMO (my comment   )

[Edited 2005-12-18 00:22:07]

Quoting RIXrat (Reply 43): BA announced recently that they would fly LHR-SEA

BA has been flying LHR-SEA for many many years - what was recently announced is that, this summer, BA will operate 10 flights per week on the route all with the 772......thats three extra frequencies per week.

Quoting AirPacific747 (Reply 44): People dont agree with me

People are not agree with you, that is true. Can you answer yourself why?

By the way, I have edited my previous post to say "And I am saying you in a friendly way"  

Quoting Anxebla (Reply 46): People are not agree with you, that is true. Can you answer yourself why?

maybe you should ask them instead

by the way, if you don't have any idea why yet, maybe you should read their posts then.
And it is irrelevant to our discussion. The discussion was about whether or not my comment was starting an A vs B war, and it didn't, so there you go

Quoting Anxebla (Reply 46): By the way, I have edited my previous post to say "And I am saying you in a friendly way" Wink

thats great!

[Edited 2005-12-18 00:41:06]

[Edited 2005-12-18 00:42:03]

It surprises me a bit that SAS is not making enough money on their CPH-SEA & CPH-BKK routes.

I hope they can manage to sort out their apparently messy long-haul ops.

Reading through this thread, I get the feeling that the problem is one of marketing, that is, matching what the airline offers, to what the customers want, at a profit, and being vigilant for changes and trends in the market, flexing as necessary to remain on top of the competition.

Part of the problem could also be the challenge of having 3 hubs: CPH, ARN & OSL.

In the worst case scenario where SAS has to drop all long haul ops, I hope that SAS would be able to carve out niches for itself so as to stay around, and maybe come back to offer long haul flights later, after a successful turnaround. The niches which I think may be profitable to SAS (I'm purely guessing now) would be business routes, such as flights to major European cities (e.g. LHR, FRA, CDG, DUS, MUC, BRU, AMS, LUX, MAD, BCN, HEL, ZRH, VIE, GVA) from the 3 hubs, plus short/medium haul operations from the main and secondary airports in Scandinavia to the resorts in the Mediterranean and the Canaries... the sort of thing that SAS Braathens seems to be doing out of Norway.

I wish the very best for this lovely airline.

Quoting BBADXB (Reply 48): It surprises me a bit that SAS is not making enough money on their CPH-SEA & CPH-BKK routes.

Me too. All the times I have flown with SAS on those routes, the planes have always been crammed with people

the cph-ord, cph-iad, cph-ewr, cph-hkg, cph-pvg, cph-nrt routes I have also flown with sas, I experienced full planes there aswell

[Edited 2005-12-18 00:46:05]

[Edited 2005-12-18 00:54:45]