The Beginning Of The End For SAS

SKAirbus · Fri Nov 09, 2012 9:16 am

For years SAS has introduced austerity measures after austerity measures, cut jobs, sold subsiduaries but now it looks like it is last chance saloon for the ailing flag carrier of three countries. In reality the airline is bleeding cash and not much can be done to stop it. Also, with militant unions in especially Denmark and Norway, any cost-cutting is very hard to push through and SAS staff are on average paid well in excess of the industry averages.

SAS have for some unknown reason refused to publish its quarterly results, pushing this back until Monday. Many assume that this is because SAS is seeking EU approval for the three Scandinavian governments to guarantee loan-extentions provisionally agreed by six banks. This would give the airline some breathing space to restructure. However, the EU could (and in my opinion are likely to) rule this as being illegal state aid. Norwegian are staunchly opposed to any state aid although as joint-owners of the airline there is an argument that the Scandinavian governments are within their rights to support the carrier.

Will SAS survive the next year? Could creating individual national carriers be a solution?

News article from NRK (in Norwegian): http://www.nrk.no/okonomi/eu-avgjor-skjebnen-til-sas-1.8390490

News article from DR (in Danish): http://www.dr.dk/Nyheder/Penge/2012/11/09/093709.htm

sweair · Fri Nov 09, 2012 9:23 am

DK can revive the Sterling Brand, Norway has its Norwegian and Sweden could buy into either Sterling or Norwegian to make sure some traffic flows our way.

Sterling was my favorite Airline, nice crews and good prices

Their prices were too good I guess.

solnabo · Fri Nov 09, 2012 9:37 am

The NEO´s out the window!

//Mike

teme82 · Fri Nov 09, 2012 9:46 am

If SK goes belly up I think AY will launch some kind of airline in Sweden. Either with co-operating with FlyBe or alone.

KC135Hydraulics · Fri Nov 09, 2012 10:09 am

Sounds like the middle of the end rather the beginning. This has all been in the works for a long time.

kl911 · Fri Nov 09, 2012 10:42 am

Quoting sweair (Reply 1):
DK can revive the Sterling Brand, Norway has its Norwegian and Sweden could buy into either Sterling or Norwegian to make sure some traffic flows our way.

Don't forget about Ryanair opening bases immediately in ARN, CPH and OSL like they did with the Malev - Budapest scenario. They have quite some 737's parked.

ZRH · Fri Nov 09, 2012 11:27 am

Unfortunately it is fact in our days that an airline in this size can not survive alone when it wants to be a network airline with long- and short-haul. SWISS only survived and makes such good results because she is under the wings of LH. Also OS failed. Most others are big (LH, AIG, AF-KL, TK), are low-cost or niche airlines.

toobz · Fri Nov 09, 2012 11:47 am

SK is just giving it away. Been checking flights from LHR/AMS-HEL and SK come up waaaay cheaper than anyone else. Even DY is coming up more expensive.

steman · Fri Nov 09, 2012 12:10 pm

This is so sad.
Such a history rich airline and an earyl example of european collaboration.
If they shut down I hope somebody will make sure the brand and name can be
preserved and maybe in the future used again.

Good luck to SAS and its people.

Kiwirob · Fri Nov 09, 2012 4:25 pm

Quoting solnabo (Reply 2):
The NEO´s out the window!

It doesn't mention that in either article.

For those that don't read Scandinavian here is an article in English

http://www.newsinenglish.no/2012/11/...sas-postpones-crisis-plan-release/

[Edited 2012-11-09 08:26:04]

sweair · Fri Nov 09, 2012 6:24 pm

Sk keeps selling its assets, but then what, when there is nothing more to sell?! It is better to try to find a merger partner as long as there is something left of SK.

kyrone · Sat Nov 10, 2012 1:48 am

Shame to see another iconic brand going the way of Pan AM, TWA, Eastern, and so many others...

Globetraveller · Sat Nov 10, 2012 9:05 am

Quoting toobz (Reply 7):
SK is just giving it away. Been checking flights from LHR/AMS-HEL and SK come up waaaay cheaper than anyone else. Even DY is coming up more expensive.

They are giving seats away and still not filling the cabins. I was on a LHR-CPH flight recently and the load must have been below 30%. I think that says alot.

sweair · Sat Nov 10, 2012 9:24 am

I met some swedes in Spain that had gone with SK to ALC and a lot cheaper than me with IB, I didn't even know they flew that route, they ended it long ago but it is back. Maybe a bit of marketing would have helped in this case, I didn't check their site as I knew they didn't fly that route..but they do..

They have been the "expensive" choice for many for so long this view of SK lives strong in many people. I don't know a single swede that would travel with SK above any competitor, there is just not enough tradition left to keep its customers. Norwegian has modern nice planes with free wifi etc And they go on many routes SK doesn't any more.

I think SK had the wrong attitude in the wrong market for a long time, its almost as customers existed for their behalf not the other way around. Be happy that you can fly with SK sort of culture.

yp6370 · Sat Nov 10, 2012 10:05 am

Quoting globetraveller (Reply 12):
They are giving seats away and still not filling the cabins. I was on a LHR-CPH flight recently and the load must have been below 30%. I think that says alot.

Individual experiences of single flights don't say anything about the state of an airline.
My last SAS flight was 100% full but that doesn't mean, they achieved a sufficient yield.

I just like to wait for the official numbers to be announced.

Kiwirob · Mon Nov 12, 2012 8:21 am

Quoting sweair (Reply 13):
They have been the "expensive" choice for many for so long this view of SK lives strong in many people.

Once you add in reserving a seat and paying for baggage SAS normally works out cheaper than Norwegian.

EBGflyer · Mon Nov 12, 2012 8:45 am

Quoting globetraveller (Reply 12):

No, it doesn't actually. You have to look at the average load factor and it is not as critical as you are saying. You have to count in that some return flights load might be light in one direction and full in the other. That seems to be the case with typical one-day meeting destinations, where passengers are being 'picked up' by an half full plane and then going home full.

[Edited 2012-11-12 00:45:37]

BNE · Mon Nov 12, 2012 9:09 am

I wouldn't be surprised if SAS didn't work in closer with LH.

It seems that with old airlines unless they can almost reinvent themselves or in the US case go broke every few years then you have so many rules and regulations that tie you down that you find hard to get rid of.

imiakhtar · Mon Nov 12, 2012 11:14 am

Here are the links to the released reports:

http://se.yhp.waymaker.net/sasgroup/con-all.asp#

SAS launches comprehensive plan to improve profitability and secure long-term financial preparedness - new union agreements must be signed in the near future

Targeting approximately 3 bn SEK of annual improvement from cost reductions and organizational restructuring and approximately 3 bn SEK increased liquidity from asset sales ~ New 3.5 bn SEK Revolving Credit Facility from Banks and Core Shareholders to secure financial preparedness conditional on signed union agreements and parliamentary approvals ~The Board unanimously supports the plan and recommends all employees to do the same ~ The Board will meet again on Sunday November 18, 2012 to decide if the conditions for the implementation of the plan exist

[Edited 2012-11-12 03:17:14]

TC957 · Mon Nov 12, 2012 11:32 am

I'm wondering if SAS should just concentrate on long-haul and domestic feed to it and leave inter-european services to Norwegian et all. Odd that AY seems to be doing so well and SK is in such a pickle.

TomFoolery · Mon Nov 12, 2012 1:49 pm

I flew with them 2 years ago, and found them to be a pretty nice airline. I flew with them 2 weeks ago, and was really disappointed with the product. The MD82 was in fair enough shape (for the age), but I found it really gross to find chewing gum in the seat pocket, all over the magazine, barf bag, and my newspaper. My connecting flight also found a wad of gum under my armrest and dried soda on the tray table.

The first flight was a 45 minute turn around time in MUC, which for an MD82, is plenty of time to tidy up. Not a great impression.

Not sure how to gauge SAS to other carriers.

Intra Europe:
Water, Tea, Coffee = Free
Buy on board for all other items (Prices only noted in DKK, NOK, SEK)
One checked bag = Free
Seat Selection= Sometimes it works on line, other times not until at the airport.

Not quite LCC, not quite Full service.

IB is the closest I can think of.

kyrone · Mon Nov 12, 2012 1:51 pm

I'm curious if all these cuts will affect their SFO opening..

Kiwirob · Mon Nov 12, 2012 3:56 pm

Quoting kyrone (Reply 21):
I'm curious if all these cuts will affect their SFO opening..

Hope not I've got tickets booked for July and August return.

Mortyman · Mon Nov 12, 2012 4:50 pm

Quoting TC957 (Reply 19):
Odd that AY seems to be doing so well and SK is in such a pickle.

AY don't have 35 unions in spread over 3 countries ...

viasa · Mon Nov 12, 2012 6:48 pm

If SK will shut down it's operation, that would be a mess for many airports/destinations. For example is SK the only operator for the following destinations:

- Longyearbyen (LYR)
- Kalmar (KLR)
- Ronneby (RNB)
- Skellefteå (SFT)

And lot of routes within Scandinavia will be unserved.

Mortyman · Mon Nov 12, 2012 7:25 pm

Quoting viasa (Reply 24):
- Longyearbyen (LYR)

Norwegian will start flying to LYR fromk OSL in march.

RyanairGuru · Sun Nov 18, 2012 4:42 pm

Quoting viasa (Reply 24):

Because these routes are so important to Norway I could see the government immediately nationalizing WF in the case of a bankruptcy. Presuming that it happens this week there is no way an agreement over its sale could be reached in time, and this would allow the Norwegian government to keep these routes open. If the chose to privatise it again down the line, then of course the can.

For long flights such as Oslo to Svalbard which are clearly beyond the range of a Dash, I provide subsidies to DY (or in fact anyone) to launch the flight ASAP

Thule · Sun Nov 18, 2012 6:03 pm

Quoting Mortyman (Reply 25):
Norwegian will start flying to LYR fromk OSL in march.

Interesting to hear - looks like 3X weekly. Is there a press release anywhere? I'm wondering if DY plans to operate this route only seasonally as a summer tourist bus, or year round...

Quoting RyanairGuru (Reply 26):
Because these routes are so important to Norway I could see the government immediately nationalizing WF in the case of a bankruptcy. Presuming that it happens this week there is no way an agreement over its sale could be reached in time, and this would allow the Norwegian government to keep these routes open. If the chose to privatise it again down the line, then of course the can.

For long flights such as Oslo to Svalbard which are clearly beyond the range of a Dash, I provide subsidies to DY (or in fact anyone) to launch the flight ASAP

That would be the only option for LYR, wouldn't it? I'm guessing the current SK routes to LYR are heavily subsidized (but I could be wrong). A big part of the daily SK flights there is the cargo and of course the expertise required to fly in Svalbard weather conditions. Hopefully DY is up to the job if they need to take over!

AeroWesty · Sun Nov 18, 2012 9:47 pm

The end is nigh:

http://www.thelocal.se/44486/20121118/

• Downroute cabin crew advised to keep cash on hand to manage on their own
• Aircraft ordered to be fueled in order to make it back to base in case of a bankruptcy filing

Fairly ominous moves.

southwest737500 · Sun Nov 18, 2012 10:13 pm

What happens to Blue1

Asturias · Sun Nov 18, 2012 11:03 pm

I hope SK pulls through, it is not just the name but the infrastructure that SK has that would be a real shame to lose.

An airline is an infrastructure and as such needs to be protected for the public interest.

I'm not sure privatizing SAS was a good move to begin with. It certainly was a dumb move with Iberia.

flyorski · Sun Nov 18, 2012 11:12 pm

Flew SK a few times trans-atlantic. Always exceptional service and a really great time. I would hate to see them go.

PlymSpotter · Sun Nov 18, 2012 11:50 pm

Quoting Mortyman (Reply 25):
Norwegian will start flying to LYR fromk OSL in march.

Quoting Thule (Reply 27):
Interesting to hear - looks like 3X weekly. Is there a press release anywhere? I'm wondering if DY plans to operate this route only seasonally as a summer tourist bus, or year round...

They flew it a few years ago, just in the summer - twice weekly IIRC.

Quoting Thule (Reply 27):
That would be the only option for LYR, wouldn't it? I'm guessing the current SK routes to LYR are heavily subsidized (but I could be wrong).

The winter months probably don't pull in great yields, but during the summer seats are easy to sell and fares are sky high. It's a 1,200 mile round trip with fares are generally above £250rtn cheapest and the planes are full all summer.

Dan

HELyes · Mon Nov 19, 2012 3:54 am

Quoting TC957 (Reply 19):
I'm wondering if SAS should just concentrate on long-haul and domestic feed to it and leave inter-european services to Norwegian et all. Odd that AY seems to be doing so well and SK is in such a pickle.

AY have had problems too but this year looks ok. They want to focus on long-haul and find partners for feeding, Flybe Nordic operates their Embraers already. SK's structure is heavy and they have been walking on three legs, while AY has been more flexible.

Quoting southwest737500 (Reply 29):
What happens to Blue1

Blue1 is SAS Finland now, they probably would go down too.

I feel sorry for the SK employees, they will be hit hard even if the company is somehow saved today

southwest737500 · Mon Nov 19, 2012 4:35 am

Quoting HELyes (Reply 33):

Wow this is so sad. I've never flown them but it seems like all the good airlines our going through trouble

legacyins · Mon Nov 19, 2012 5:51 am

Negotiations between management and the Unions is still going on. Two Unions have agreed and only six more to go.

http://news.yahoo.com/airline-sass-s...ded-monday-001605266--finance.html

Mortyman · Mon Nov 19, 2012 5:59 am

Quoting legacyins (Reply 35):
Negotiations between management and the Unions is still going on. Two Unions have agreed and only six more to go.

Other way around my friend

6 has agreed, two to go ...

legacyins · Mon Nov 19, 2012 6:10 am

Quoting Mortyman (Reply 36):

So, is this an update from the article?

"SAS spokeswoman Elisabeth Manzi said SAS had inked deals with Norwegian cabin crew unions SNK and NKS, and it was still in talks with the remaining six unions."

Kiwirob · Mon Nov 19, 2012 7:26 am

All the lastest news here in English

http://www.newsinenglish.no/2012/11/19/pilot-unions-agree-to-sas-cuts/

It's the Danish and Norwegian cabin attendants unions which are the 2 holdouts.

CPHFF · Mon Nov 19, 2012 7:38 am

Nice to see them SK planes in the air this morning. I was really worried.

AeroWesty · Mon Nov 19, 2012 4:24 pm

Quoting KiwiRob (Reply 38):
It's the Danish and Norwegian cabin attendants unions which are the 2 holdouts.

SAS 'saved,' at least for now

"Scandinavian Airlines (SAS) was able to avoid filing for bankruptcy on Monday after the last of nine key labour unions finally agreed to go along with pay and pension cuts, along with more demanding work rules. The agreement ended a weekend drama that some say put the entire Nordic transport system at stake."

Kiwirob · Mon Nov 19, 2012 8:20 pm

Quoting RyanairGuru (Reply 26):
For long flights such as Oslo to Svalbard which are clearly beyond the range of a Dash,

If WF gets bought by Per Braathen which has been widely reported in the Norwegian press, Braathens have Bombardier C series on order for Malmo Aviation, shouldn't be any problem for a C series to do Oslo Svalbard.

Who is online

Popular Searches On Airliners.net