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SAS-VISIT STOCKHOLM - 2011-06
SAS-VISIT STOCKHOLM - 2014-10
FORMED AND STARTED OPERATIONS IN 1946. DOMESTIC & INTERNATIONAL, SCHEDULED, PASSENGER & CARGO, JET AIRPLANE SERVICES.
Frosundaviks Alle 1
19587 Stockholm, Sweden
The Kingdom of Sweden was established in 1523, it covers an area of 449,964 sq km, its population is 8.8 million, its capital is Stockholm, and its official language is Swedish.
JANUARY 1994: 1993 = -$62.3 MILLION.
(SAS) FLIES 308 767 EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) FLIGHTS/MONTH OVER THE NORTH ATLANTIC, AND 202 OVER ASIA.
APRIL 1994: JAN STENBERG, NEW PRESIDENT & (CEO).
(SAS) PAYROLL HAS BEEN CUT -17% IN LAST 3 YEARS.
-2,900 EMPLOYEES IN 1994 = SWEDEN -545, NORWAY -240, DENMARK -630 FLIGHT CREW (FC) & CABIN ATTENDANTS (CA) 1,215, OUTSTATIONS -300, FROM CURRENT 20,000 EMPLOYEES.
19,064 EMPLOYEES (INCLUDING 1,643 FLIGHT CREW (FC), 2,886 CABIN ATTENDANTS (CA), & 3,501 MAINTENANCE TECHNICIANS (MT)).
OCTOBER 1994: 1 MD-82 (JT8D-219), EX-NORDIC EAST.
JANUARY 1995: (SAS) GROUP 1994 = +$206.5 MILLION (1ST PROFIT IN 5 YEARS): 65.6% LF (LOAD FACTOR) (+2.1%, 11TH IN ASSOCIATION OF EUROPEAN AIRLINES (AEA)).
CONVERTING MD-80'S FROM 2 CLASS, 95 PASSENGERS (PAX) (58 BUSINESS (C), 37 ECONOMY (Y) 5-ABREAST, TO 128Y 6 ABREAST SEATING. 1 MD-82, EX-(RNO).
MARCH 1995: $1.18 BILLION ORDER, 35/35 737-600 (CFM56-7B). 1 MD-81 (JT8D-217C), EX-SWISSAIR (SWS). 1 MD-82 (JT8D-217C), EX-(RNO).
JULY 1995: 17,593 EMPLOYEES (INCLUDING 1,525 FLIGHT CREW (FC), 2,419 CABIN ATTENDANTS (CA), 3,188 MAINTENANCE TECHNICIANS (MT)).
1 MD-81 (JT8D-217C), EX-SWISSAIR (SWS).
AUGUST 1995: +2 ORDERS (FOR TOTAL 8) MD-90-30 (V2500) (7/96) ($320 MILLION), 143 PAX, 5 ABREAST.
OCTOBER 1995: COPENHAGEN TO BORLAND, DALA REGION OF SWEDEN (SOUGHT AFTER SERVICE - ACTIVE ON INTERNATIONAL SCENE). ALSO, STOCKHOLM TO WARSAW, COPENHAGEN TO POZNAN. CODE SHARE WITH UNITED AIRLINES (UAL) SCANDINAVIA TO USA & CODE SHARE WITH ICELANDAIR (ICE) TO ICELAND.
DECEMBER 1995: LEASING 1 DC-8-70 FROM EMERY (EAF).
JANUARY 1996: EUROPEAN COMMUNITY (EC) OK'S LUFTHANSA (DLH) ALLIANCE.
NEW ROUTES TO BOLOGNA (DC-9-21, 75 PAX) & NEWCASTLE (F 50, 46 PAX), WITH MORE TO EDINBURGH.
IN 1995, (SAS) GROUP EMPLOYEES REDUCED FROM 22,769 TO 20,499 (-20%), & (SAS) AIRLINE EMPLOYEES 20,888 TO 17,593:
1995 = +$389 MILLION (+$216.9 MILLION) (NET PROFIT): +1% (RPK) (TRAFFIC), 18.8 MILLION PASSENGERS (PAX).
TO HUSHKIT DC-9 FLEET. TO LEASE 8 MD-81'S & 2 MD-87'S FROM SWISSAIR (SWS).
MARCH 1996: POSSIBLE STAKE OF 66% OR 20% IN ESTONIAN AIRLINES (ENA).
SVEN-GORAN DANIELSSON OUT ON INDEFINITE SICK LEAVE. TORVALD CARDELLI VP TECHNICAL OPERATIONS; & WILFRED LYKKE ACTING DIRECTOR, 767 PRODUCTION UNIT.
1 747-200F, ATLAS AIR (TLS) WET-LEASED, FOR FREIGHT TO USA & ASIA, TO BE MAINTAINED IN OSLO. 1 767-300ER (25411), EX-(EIY), 3 YEAR (GUI) LEASED. 1 MD-81 (JT8D-217C), EX-SWISSAIR (SWS) DELIVERY.
APRIL 1996: CODE SHARE WITH THAI AIRWAYS (TII) TO BANGKOK.
MAY 1996: (SAS) GROUP, BIDS $20 MILLION FOR 66% STAKE IN ESTONIAN AIRLINES (ENA) = 34% GOVERNMENT, 28% (SAS), 17% TALLINA BANK, 21% SWEDFUND & DANISH INVESTMENT.
JOINT 747-200SF SERVICE, KANSAI TO GOTHENBURG, VIA NEW DELHI.
AUGUST 1996: 50TH YEAR ANNIVERSARY!
TO MINSK, BELARUS (DC-9-41).
SVEN-GORAN DANIELSSON, 737-600 PROJECT MANAGER REPORTING TO OTTO LAGARHUS, SENIOR VP PRODUCTION DIVISION.
SEPTEMBER 1996: TO ARKHANGELSK, RUSSIA'S WHITE SEA (MD-87).
OCTOBER 1996: JOHN DUEHOLM VP TECHNICAL OPERATIONS REPORTING TO OTTO LAGARHUS; LENNART APPEL DIRECTOR CENTRAL ENGINEERING; WILFRED LYKKE DIRECTOR MAINTENANCE CONTROL; TORVALD CARDELLI DIRECTOR TRAFFIC RELATED MAINTENANCE (CPH); ERIC JURLANDER ACTING MANAGER 767 ENGINEERING (CPH).
CODE SHARE WITH AIR CANADA (ACN) TO CANADA VIA FRANKFURT, LONDON & NEW YORK.
CURRENT 20,757 EMPLOYEES = +823 FROM 1995.
1ST MD-90-30 (V2500), 18F, 141Y, OF 8 ORDERS (1ST MD-90 IN EUROPE).
NOVEMBER 1996: HONEYWELL (TCAS) 2000 FOR 76 737-600'S (1998).
JANUARY 1997: 1996 = +$248 MILLION (-31%): 12.11 BILLION (RPK) (#29 HIGHEST IN WORLD) (+5%), 19.83 MILLION PASSENGERS PAX, +5% (FTK) FREIGHT TRAFFIC.
OTTO LAGARHUS SENIOR VP PRODUCT DIVISION, RETIRES.
APRIL 1997: TO SZCZECIN, POLAND (F 50, 46 PAX).
20,500 EMPLOYEES (INCLUDING 5,000 FC & 3,200 MT).
MAY 1997: JOINS "STAR ALLIANCE" WITH LUFTHANSA (DLH), UNITED AIRLINES (UAL), AIR CANADA (ACN), & THAI AIRWAYS (TII), TO SHARE TICKET COUNTERS, AND SOME CODE SHARES.
RESUMED COPENHAGEN TO COLOGNE.
JULY 1997: CODE SHARE WITH SOUTH AFRICAN AIRWAYS (SAA), COPENHAGEN TO CAPE TOWN (747).
VOLVO SELLS 4.72% SHARES TO (SAS) FOR $41.5 MILLION.
767 180 MINUTES (ETOPS) FLIGHTS/MONTH: 389 OVER NORTH ATLANTIC AND 224 TRANS ASIA.
AUGUST 1997: 1 MD-90-30 (53544) DELIVERY.
OCTOBER 1997: 23,607 EMPLOYEES.
767 180 MINUTES (ETOPS) FLIGHTS/MONTH: 384 NORTH/MID ATLANTIC, & 227 TRANS ASIA.
NOVEMBER 1997: PLANS TO SELL HOTEL CHAIN AND FOCUS ON CORE BUSINESS.
COPENHAGEN TO POZNAN AND ZAGREB.
1 767-3Y0ER (25411), WET-LEASED TO AEROMEXICO (AMX).
DECEMBER 1997: JOINS STAR (SAL) ALLIANCE WITH LUFTHANSA (DLH), UNITED AIRLINES (UAL), VARIG (VAR), AIR CANADA (ACN), & THAI AIRWAYS (TII). AGREES TO A GLOBAL CARGO SYSTEM, SHARING INFORMATION TECHNOLOGY (IT), HANDLING FACILITIES, & TO DEVELOP JOINT PRODUCTS.
BJORN BOLDT-CHRISTMAS SENIOR VP INFORMATION SYSTEMS RESIGNS.
$350 MILLION, 15/18 ORDERS (7/99) Q402'S FROM BOMBARDIER (BMB).
Bombardier Aerospace demonstrated that turboprops will be part of the regional airline industry well into the next century with the delivery of the 500th Dash 8 to Horizon Airlines and the unveiling of its newest family member, the 70-seat Dash 8-Q400. The (SAS) order signals a growing European market for the Dash 8-Q400, an airplane some thought would find a limited presence only in the Asia/Pacific region. 1st flight of the Dash 8-Q400 was last month. Certification flight testing will take place at the Bombardier Flight Test Center in Wichita and certification to (JAA) standards is scheduled for the 1st quarter of 1999.
JANUARY 1998: KURT KUHNE, VP FLEET DEVELOPMENT STATES SCANDINAVIAN AIRLINES (SAS) WILL LAUNCH 737-600 FLIGHT DYNAMICS, HEAD-UP GUIDANCE SYSTEMS, WITH 41/35 ORDERS, TO ALLOW CONTINUED OPERATIONS IN VERY LOW VISIBILITY CONDITIONS, ESPECIALLY IN EXTENDED FOG SEASONS.
NEW 292,000 SQ FT, CARGO FACILITY, OPENS IN NEWARK, TO HANDLE DRAMATIC GROWTH, IN FREIGHT VOLUME, WHICH REACHED A RECORD 1B TONS IN 1997.
IN 3/98, STOCKHOLM ARLANDA AIRPORT TO STANSTED (DC-9-41, 105 PAX).
1997 = 20.6 BILLION RPK (+5%); 65.1% LF; 690 MILLION FTK (+15%), 20.8 MILLION PAX (+5%).
BUYS 29% OF WIDEROE & OPTIONS FOR TOTAL +34.2% BY END OF 1998 FOR TOTAL $42.1 MILLION. BEGAN CODE SHARING ON INTER-SCANDINAVIAN ROUTES.
(SAS) COMMUTER TO STANDARDIZE ON BOMBARDIER DASH 8-Q400 (53 OPTS) & WILL REPLACE 2000'S, AS LEASES END, & SELL OR RETURN F 50'S. 1 MD-81, EX-SWISSAIR (SWS), LEASED. 1ST FLIGHT OF 737-600. 767-383ER (OY-KDH) IN STAR (SAL) ALLIANCE MEMBERS' LIVERY.
FEBRUARY 1998: STOCKHOLM (ARLANDA) TO STANSTED (DC-9-41), NO SLOTS AVAILABLE AT LONDON HEATHROW (LHR). TO BERLIN (SAAB 2000).
1997 PRE-TAX = +$274.4 MILLION (+22.8%): +4.2% RPK, 64.8% LF (+1.2), 20.7 MILLION PAX (+4.5%), CONCERNS RE-ASIAN ECONOMY & MIDDLE EAST CONFLICT.
ACQUIRES 100% AIR BOTNIA, FINLAND INCLUDING 15 DESTINATIONS IN FINLAND, AND 5 JETSTREAMS, 19 PAX.
$3 MILLION, FOR NEW FREIGHT TERMINAL AT NEWARK, 22,500 SQ M.
1 MD-82 (JT8D-219), EX-RENO (RNO) DELIVERY.
APRIL 1998: COPENHAGEN TO WROCLAW, POLAND & TO ROTTERDAM (F-50).
20,500 EMPLOYEES (INCLUDING 5,000 FLIGHT CREW (FC) & 3,200 MAINTENANCE TECHNICIANS (MT).
SCANDINAVIAN AIRLINES (SAS) CARGO ACROSS ATLANTIC WITH LUFTHANSA (DHL) DC-8F, GOTHENBURG LANDVETTER AIRPORT TO NEW YORK (JFK). 747-200F CURRENTLY SERVES MIDDLE EAST, MACAU, HONG KONG, OSAKA AND GOTHENBURG.
JOHN DUEHOLM VP TECHNICAL OPERATIONS, RESIGNS TO JOIN THE FLACK GROUP.
STRATEGIC ALLIANCE WITH LITHUANIAN AIRLINES (LIJ) INCLUDING FREQUENT FLYER.
767 180 MINUTES (ETOPS) FLIGHTS/MONTH: 370 NORTH/MID-ATLANTIC; 251 TRANS ASIA.
MAY 1998: CONTRACT FOR HEAVY MAINTENANCE ON 5 MD-80'S TO SHANNON AEROSPACE.
BUYS 26% OF CIMBER AIR, DENMARK (13 ATR 42/ATR 72). ACQUIRES AIR BOTNIA, FINLAND DOMESTIC OPERATOR.
JUNE 1998: IN 10/98, DAILY NON-STOPS TO CHICAGO (ORD).
767 FLEET, MAINTENANCE CONTRACT TO LUFTHANSA TECHNIK (LTK) (DLH).
SELLS 767-300ER (25058) TO MUZUN LEASING AND LEASES BACK. +3 ORDERS 737-600'S (FOR TOTAL 44/32). MD-82 (JT8D-219), EX-RENO AIR (RNO) DELIVERY.
JULY 1998: CLAES BROSTROEM SENIOR VP INFORMATION STRATEGIES/PROCESSES, CHAIRMAN OF SCANDINAVIAN AIRLINES (SAS) DATA SUBSIDIARY, 44 YEAR OLD, & SWEDISH.
LAST HEAVY MAINTENANCE AT FORNEBU AIRPORT, OSLO. WILL MOVE TO OSLO, GARDERMOEN AIRPORT IN 9/98.
1997 TOP WORLD AIRLINES COMPARISONS:
EMPLOYEES (K): 10 AFA 36; 11 QAN 30; 12 SIA 28; 13 KLM 27; 14 SWA 25; 15 TWA 25; 16 SVA 23; 17 IND 23; 18 IBE 22; 19 SAS 22; 20 ACN 22; 21 TII 22.
NET ($MILLION): 11 SWA 318 (207); 12 AFA 314 (-28); 13 ACN 308 (109); 14 KLM 303 (-33); 15 SAS 283 (265); 16 ALI 256 (-780).
PASSENGERS (PAX) (MILLION): 7 ANA 41; 8 CAL 39; 9 DLH 35; 10 BAB 34; 11 JAL 32; 12 KAL 26; 13 ALI 25; 14 TWA 24; 15 SAS 21; 16 QAN 19.
+12 ORDERS FOR TOTAL 55 737-600'S. (SAS) COMMUTER, 2 ORDERS BOMBARDIER DASH-8Q-400 (PW150).
(ETOPS) 180 MINUTES FLIGHTS/MONTH (TOTAL): 14 767 = 427 (33,650) ATLANTIC, 216 (20,037) ASIA.
SEPTEMBER 1998: SCANDINAVIAN AIRLINES (SAS) CARGO JOINT DIRECT SERVICES WITH LUFTHANSA CARGO (LUB), AND JAPAN AIRLINES (JAL) BETWEEN FRANKFURT, GOTHENBURG, AND OSAKA. (SAS) CARGO TO HANDLE MAIL AT (SAS) NEW FREIGHT TERMINAL, AT OSLO'S GARDERMOEN AIRPORT (>25,000 T/YEAR), REPLACES FORNEBU AS NORWAY'S MAIN AIRPORT.
(IATA) (SAS) FISCAL YEAR (FY) 1997 = +$278.1 MILLION.
CODE SHARE WITH SINGAPORE AIRLINES (SIA) WHO MAY JOIN STAR ALLIANCE.
FARNBOROUGH ANNOUNCEMENT OF $600 MILLION ORDERS: 9 EXERCISED OPTIONS & +5 ORDERS 737-600/-700/-800'S. 1ST 737-683 DELIVERY IN NEW LIVERY. 2 737-683'S (49-28288, 92-28289) DELIVERIES. (SAS) COMMUTER +2 ORDERS (7/99) BOMBARDIER DASH 8-Q400, FOR TOTAL 17, 72 PAX EUROPEAN CONFIGURATION & 76 PAX DOMESTIC.
OCTOBER 1998: ESTABLISHES ITSELF AT NEW OSLO GARDERMOEN AIRPORT, WHICH REPLACES OLD FORNEBU AS NORWEGIAN CAPITAL'S MAIN AIRPORT. (SAS) HAS 90,000 SQ M SPACE, AND 4,300 EMPLOYEES.
STARTS SERVICE TO NEW ALESUND & KRISTIANSAND, NORWAY.
KJELL FREDHEIM PRESIDENT & (CEO) OF (SAS) SUBSIDIARY AIR BOTNIA, EX-MANAGING DIRECTOR BRITANNIA AIRWAYS (BRI) IS A CAREER EXECUTIVE AT (SAS), WAS PRESIDENT OF AIR BALTIC. (SAS) FULLY CONTROLS AIR BOTNIA WITH 28.5% STAKE IN AIR BALTIC (BAU).
(SAS) CARGO LINKS EXPRESS FREIGHT SERVICES AND ROUTE NETWORKS WITH LUFTHANSA CARGO (LUB).
737-683 DELIVERY (100TH 737-NG AT BOEING) (28304 "TORVALD VIKING").
14 767 (ETOPS) 180 MINUTES FLIGHTS/MONTH (TOTAL FLIGHTS) = NORTH/MID ATLANTIC 399 (34,952) TRANS ASIA 217 (20,707).
NOVEMBER 1998: 3 737-683'S (120-28293; 137-28294; 149-28295), DELIVERIES.
JANUARY 1999: BUYS REMAINING 8% INTEREST IN AIR BALTIC (BAU) CORPORATION FROM SINGAPORE AIRLINES (SIA) FOR $2.14 MILLION FROM BALTIC INTERNATIONAL USA.
1998 = 21.2 BILLION RPK (+35%); 66% LF; 691 FTK; 21.69 MILLION PAX (+4%). 1998 (SAS) COMMUTER = 1.7 MILLION PAX (1.8 MILLION).
3 737-683'S (28310 - "GEINNUND VIKING;" 28305 - "ELISABETH VIKING;" 30189 - "FRIDLEV VIKING"), & 3 767-683'S (21-28296, SE-DNR; 30-28297, SE-DNS; 91-28298, OY-KKC) DELIVERIES. 2 F28-4000'S (11112; 11204) WITHDRAWN FROM USE (WFU).
FEBRUARY 1999: HAD TO GROUND ITS DC-9 FLEET FOR 4 DAYS TO ACCOMPLISH MANDATORY SUPPLEMENTAL STRUCTURAL INSPECTIONS.
MARCH 1999: SIGNS (MOU) WITH LUFTHANSA (DLH) & SINGAPORE AIRLINES (SIA) FOR AIR CARGO INTEGRATION INCLUDING COMMON INFRASTRUCTURE FOR INFORMATION TECHNOLOGY (IT). THE 3 COMBINED HAVE 13% OF INTERNATIONAL CARGO MARKET.
737-683 (227-28301, OY-KKH) DELIVERY. F28-4000 SOLD (11204).
APRIL 1999: 20,500 EMPLOYEES. SITA: STODPSK.
ALLIANCE WITH SINGAPORE AIRLINES (SIA), INCLUDING FREQUENT FLYER MILES, MARKETING, CATERING, CARGO SERVICES, ENGINEERING, TRAINING, & INFORMATION TECHNOLOGY (IT), TO SINGAPORE, VIA BANGKOK (767) & FROM COPENHAGEN, AND FROM SINGAPORE TO COPENHAGEN DIRECT (A340 (SIA)).
737-59D (2186-26419) LEASED TO LITHUANIAN AIRLINES (LIJ). 3 737-683'S (243-29302, SE-DNT; 255-29310, LN-RPG; 257-29303, SE-DNU) DELIVERIES. DC-9-41 (47596) RETURNED TO LESSOR, TOMBO (TOM) LEASED TO AIRBORNE EXPRESS (AFC).
MAY 1999: CODE SHARE WITH STAR (SAL) ALLIANCE MEMBER AIR CANADA (ACN) COPENHAGEN TO TORONTO NONSTOP.
RETURNED 1 747-200F TO ATLAS (TLS) AND REPLACED IT WITH 1 MD-11F LUFTHANSA CARGO LEASED. 737-683 (270-28304, SE-DNX) DELIVERY. 2 F28-4000'S (11123; 11130) RETIRED.
JUNE 1999: +2 Q400, 70 PAX FOR TOTAL 19. 2 737-683'S (290-28305, OY-KKE; 303-30189, OY-KKF) DELIVERIES. 2 F28-4000 (11190; 11239), LEASED TO AIR BOTNIA.
1998 TOP WORLD AIRLINES TRAFFIC RPM (BILLION):
23 MAS 18.25; 24 SWS 17.43; 25 CDI 16.70; 26 AMW 16.36; 27 VAR 16.25;
28 SAS 12.98; 29 CHI 12.64; 30 VAA 12.27; 31 SVA 11.69.
AUGUST 1999: 2 737-683'S (333-28308, SE-DNY; 335-30190, SE-DNZ), DELIVERIES. SELLS 4 MD-80'S (48003; 48006; 48007; 48010), TO MIDWEST EXPRESS (MWX). 3 F28-4000'S (11116; 11120; 11123), SOLD TO (PB AIR).
SEPTEMBER 1999: COPENHAGEN TO CRACOW. STANSTED TO OSLO.
TECHNICAL DIVISION: CONTACT: NILS FORSBERG MANAGER BUSINESS CONTRACTS: 12,000 SQ M, HANGARS FOR 2 NARROW BODIES AIRPLANES; "A" - "D" TECHNICAL CHECKS FOR DC-9'S, MD-80'S, & MD-90'S, INCLUDING AVIONICS UPGRADES, COMPOSITES REPAIRS, INTERIORS, INCLUDING (VIP), SHEET METAL WORK, STRIP, PAINT, & CORROSION PREVENTION & CONTROL PROGRAM (CPCP).
737-683 (368-28309, SE-DTF) DELIVERY.
OCTOBER 1999: 1 737-683, (GEH) 108 MONTH LEASED (375-28605, LN-RPH). MD-81 (48010) RETURNED TO LESSOR. 737-683 (382-28311, DTU) DELIVERY.
NOVEMBER 1999: (FY) 1998 PRE-TAX = +$12.3 MILLION (-89.9%) DUE TO INTENSE FARE COMPETITION & DROP IN EUROPEAN BUSINESS TRAFFIC: -3% RPK, +2% ASK. 1998 = +$335.7 MILLION (+$278.1 MILLION): 12.98 BILLION RPM (+2.7%), 1.84 BILLION FTM (+4%).
9 767-300'S HEAVY MAINTENANCE CONTRACT TO AIR CANADA (ACN) AT DORVAL, STARTING 2/00.
SOLD 5 F28-4000'S (11115; 11120; 11126; 11128; 11191). SAAB 2000 (053) WRITTEN OFF (W/O) AFTER INCIDENT AT ARLANDA IN 10/99.
DECEMBER 1999: SWITCHES 5 ORDERS 737-700'S TO LARGER 737-800'S. 4 ORDERS (2/01) A330-300'S & 6 ORDERS A340-300'S TO REPLACE ITS 767 FLEET. DC-9-21 (382-47301) RETIRED. MD-81 (992-48010) RETURNED TO LESSOR CREDIT LYONAISE.
JANUARY 2000: JOINS RACE TO DEVELOP FLIGHT RESERVATIONS, WITH WIRELESS APPLICATIONS PROTOCOL (WAP)-BASED, MOBILE TELEPHONE SYSTEM. ALLOWS ACCESS TO TIMETABLE, TO CHECK REAL-TIME FLIGHT STATUS, & DETAILS FREQUENT FLYER ACCOUNTS.
1999 = 64.1% LF (LOAD FACTOR) (-1).
DASH-8-Q401 (4012, OY-KCA "HUGE VIKING") FOR (SAS) COMMUTER. F28-4000 (11191) LEASED TO AIR BOTNIA. MD-81 (48003) RETIRED. 767-3YOER (357-24952), RETURNED TO (BBAM) (BBB). DC-9-41 (752-47633) RETURNED.
FEBRUARY 2000: 23,982 EMPLOYEES.
1999 = +$213 MILLION (-35%): +1.6% RPK, +4.7% ASK, -5% BUSINESS RPK, LONG-HAUL +2% RPK LED BY ASIA, 75.6% LF.
2 737-783'S (476-28316, OY-KKR "GJUKE VIKING;" 486-30192, SE-RPJ). DHC-8-300 (597, OY-KCB "HERTA VIKING") DELIVERY. MD-81 (966-48006) RETIRED. DC-9-21 (382-47301), RETURNED TO LESSOR CELSIUS (AMTEC). 12/10 ORDERS A321-100 (V2500-A5), FOR DOMESTIC AND EUROPEAN ROUTES.
MARCH 2000: 1999 = 21.62 BILLION RPK (+2%); 683.9 MILLION FTK (-1%); 22.21 MILLION PAX (+2%).
CODE SHARE WITH BRITISH MIDLAND (BMA), TO LONDON.
737-783 (500-28317, LN-RPK) & 1 DASH 8Q-400 (PW150) DELIVERIES.
APRIL 2000: 23,992 EMPLOYEES. (http://www.scandinavian.net).
SCANDINAVIA AIRLINES (SAS) CARGO, LINKS WITH STAR ALLIANCE PARTNERS, LUFTHANSA CARGO (LUB), AND SINGAPORE AIRLINES CARGO (SQC), TO FORM "NEW GLOBAL CARGO," USING A COMMON INFORMATION TECHNOLOGY (IT), E-COMMERCE, INFRASTRUCTURE.
IN 10/00, OSLO - DUBLIN.
1ST Q = 163.56 MILLION FTK (FREIGHT TRAFFIC) (-8%); 5.38 MILLION PASSENGERS (PAX) (+6%).
MD-81 (48010) RETURNED TO LESSOR, LEASED TO EXPRESS ONE (EOI).
MAY 2000: 1ST Q PRE-TAX = -$33 MILLION: +5.9% RPK (30.9% BUSINESS (C) CLASS), +74% FUEL COSTS.
1ST 737-883 DELIVERY. 2 737-883 (548-28319, SE-DTL; 551-28320, SE-DTM) DELIVERIES. EXTENDS LEASE OF 767-383ER (24475) WITH (FSB), THRU 11/03.
JUNE 2000: 1 DASH-8-402 (4019, LN-RDC "HADER VIKING"), DELIVERY.
737-883 (30193, OY-KKM), DELIVERY.
JULY 2000: 25,574 EMPLOYEES.
1999 TOP WORLD AIRLINES COMPARISONS:
NET PROFIT ($MILLION): 12 CAT 282; 13 QAN 279; 14 USA 273; 15 KAL 226; 16 SAS 217; 17 AMW 201; 18 ASA 196; 19 JAL 187.
EMPLOYEES (1,000): 13 IBE 29.1; 14 SWA 27.7; 15 SIA 27.4; 16 KLM 27.3; 17 SAS 25.8; 18 TII 24.1; 19 QAN 23.4; 20 ACN 23.
CONVERTED 6 DASH 8-Q400'S, TO FIRM ORDERS, FOR TOTAL 28 FIRM (6 IN OPERATIONS). 1 737-683 (614-28322, SE-DTZ) DELIVERY. RETIRED 3 MD-81 (957-48005; 966-48006; 981-48008). MD-81 (48002) RETURNED TO FINOVA (GRB).
AUGUST 2000: JOINS E-COMMERCE VENTURE CALLED "aeroexchange" FOR AIRPLANE PARTS, MAINTENANCE SERVICES, & GENERAL SUPPLIES WITH 12 AIRLINES: (CAT); (DLH); (SIA); (FED); (NWA); (ACN); (ANA); (AMW); (KLM); (AUL); & (ANZ).
1ST 6 MONTHS PRE-TAX = +$494 MILLION (+48%): DUE TO STRONGER BUSINESS CLASS TRAFFIC & DOMESTIC ECONOMIC GROWTH: 65.7% LF (+3.5), +57% FUEL COSTS. (SAS) GRP /99 = +$216.54 MILLION (+$335.13 MILLION); SAS /99 = +$183.4 MILLION: 21.24 BILLION RPK (+1.7%); 64.1% LF; 741.4 MILLION FTK (-1.9%); 22.23 MILLION PAX (+2.4% 25,754 EMPLOYEES (+7.3%).
IN 11/00, COPENHAGEN TO BIRMINGHAM, UK (3/DAY).
MD-81 (985-48009) RETURNED TO FINOVA (GRB). DHC-8-401 (4023, LN-RDH) DELIVERY. PLANS TO RETIRE ITS LAST DC-9-21 (OY-KRE) IN 11/00. 2 737-883'S (625-28323, SE-DYA; 634-30467, SE-DTN "THORLEIF VIKING," 2 737-883'S (666-30194, LN-RPP; 668-30468, LN-RPR) DELIVERIES. 3 F 50'S (20185; 20186; 20194) RETURNED TO (AF&T).
SEPTEMBER 2000: MD-81 (48007) RETIRED. DASH 8-402 (4024, LN-RDI "ASTA VIKING"). 1 SAAB 2000 (044) RETURNED TO SAAB.
OCTOBER 2000: OSLO - DUBLIN (4/WEEK).
NEXT SUMMER, TO LEASE 1 A330 FROM BRITISH MIDLAND (BMA) TO FLY TO BEIJING, FREEING UP A 767 FOR NEW SERVICE TO WASHINGTON.
1ST 6 MONTHS TOP WORLD AIRLINES TRAFFIC RPK (BILLION):
13 KAL 19.47; 14 IBE 18.77; 15 AMW 15.02; 16 VAR 12.59; 17 SAS 11.16; 18 GUN 10.79; 19 AAT 9.47; 20 ASA 9.43.
GROUNDS ALL DASH 8-400'S, FOLLOWING ELECTRONIC PROBLEMS, AND DELAYS FURTHER DELIVERIES. DC-9-21 (475-47360) RETIRED. 737-883 (673-30469, LN-RPL) DELIVERY. DASH 8-402 (4025, LN-RDK "INGRID VIKING") DELIVERY.
NOVEMBER 2000: IN 12/00, CODE SHARE WITH ICELANDAIR (ICE), VIA REYKJAVIK, TO ORLANDO, ADDING TO EXISTING, BALTIMORE/WASHINGTON, BOSTON AND MINNEAPOLIS.
21,468 EMPLOYEES (INCLUDING 1,953 FC, 3,527 CA, & 3,696 MT) (+3.6%).
NAMES JORGEN LINDEGAARD, (CEO), TO REPLACE JAN STENBERG, WHEN HE RETIRES IN 6/01.
737-800 DELIVERY WITH NEW INTRA-EURO INTERIOR DESIGN. 2 737-883'S (696-30195, LN-RPM; 717-30470, LN-RPN) DELIVERIES. 2 MD-81'S (957-48005; 981-48008), RETURNED TO FINOVA (GRB). DC-9-21 (474-47308) RETURNED TO CELSIUS. 2 DC-9-41'S (47597; 47748) RETIRED.
DECEMBER 2000: 1ST 9 MONTHS = 17.41 BILLION RPK (+6%), 504.63 MILLION FTK (-2%), 17.64 MILLION PAX (+6%).
LUFTHANSA (DLH) BUYS 20% OF BRITISH MIDLAND (BMA) FROM SCANDINAVIAN AIRLINES (SAS). (SAS) STILL HAS 20% OF (BMA).
TOP WORLD AIRLINES 1ST 9 MONTHS TRAFFIC RPK (BILLION):
19 VAA 22.08; 20 VAR 19.79; 21 CHI 19.04; 22 ANA 17.66; 23 SAS 17.41; 24 GUN 16.36; 25 SVA 15.16.
EXERCISES OPTIONS FOR +3 737-683'S (2/02). 737-883 (733-30196, SE-DYH) DELIVERY. 2 DC-9-21'S (47306; 47360) RETIRED AND DC-9-41 (47646) SOLD TO AIR 41. 1 737-883 (733-30196, SE-DYH) DELIVERY. 1 DASH 8-402 (4033, LN-RDM) DELIVERY.
JANUARY 2001: TESTING USE OF A WIRELESS, ON-BOARD INTERNET SYSTEM, BEING DEVELOPED BY TENZING COMMUNICATIONS, SEATTLE, FOR PASSENGERS TO GAIN ACCESS TO E-MAIL & INTERNET, BOTH ON-BOARD, & ON GROUND.
TOP WORLD AIRLINES 2000 TRAFFIC RPM (BILLION):
25 VAA 18.31; 26 VAR 16.33; 27 CHI 16.14; 28 SAS 14.07; 29 ANZ 13.81; 30 SVA 12.57; 31 EAD 12.06.
RETIRES DC-9-41 (47725) AFTER 26 YEARS SERVICE. 1 DHC-8-402 (4035, LN-RDS) DELIVERY.
FEBRUARY 2001: 2000 PRE-TAX LESS CAPITAL GAINS = +$128 MILLION: $174 MILLION FUEL COSTS (+73%): +7% RPK, 22 MILLION PAX (+5.7%).
+3 ORDERS 737-683'S, WITH OPTION TO CONVERT TO -700/-800. 1 737-883 (767-28324, SE-DTT), +2 DASH 8-402'S (4009, LN-RDD, "LOGE VIKING;" 4036, LN-RDO) DELIVERIES. 1 F 50 (20188) RETURNED.
MARCH 2001: STAR (SAL) ALLIANCE AFFILIATE, LUFTHANSA (DLH) TO TAKE 30% STAKE IN SPANAIR (SPP), AND (SAS) TO REDUCE ITS STAKE IN (SPP) FROM 49%, TO 30%.
2000 = 22.92 BILLION RPK (+6%), 682.53 MILLION FTK (+.2%), 23.40 MILLION PAX (+5%).
PLANS TO GROW CAPACITY BY +50% ASK'S BY 2005, INCLUDING CARRYING 35 MILLION PASSENGERS/YEAR.
DAILY FLIGHTS TO DUBLIN AND NICE. IN 5/01, COPENHAGEN - WASHINGTON (5/WEEK).
(SAS) CARGO, WILL BE A SEPARATE COMPANY, IN 4/01.
1 737-883 (798-30197, SE-DTS), DELIVERY. 767'S TO BE REPLACED WITH A330'S & A340'S. 2 DASH 8-402'S (4010, LN-RDJ "TOKE VIKING;" 4033, LN-RDM "BANKE VIKING") DELIVERIES. 2 F 50'S (20187; 20198) RETURNED TO LESSOR.
APRIL 2001: 28,863 EMPLOYEES.
MAIN BASE: COPENHAGEN (KASTRUP).
HUBS: STOCKHOLM (ARLANDA); OSLO (GARDERMOEN).
MAY 2001: 1 A330-200, BRITISH MIDLAND (BMA) LEASED IN STAR (SAL) ALLIANCE LIVERY (401) FOR COPENHAGEN - NEWARK OPERATIONS.
JUNE 2001: TO ACQUIRE BRAATHENS (BRT), WITH PURCHASE OF BRAATHEN'S FAMILY'S 38.8% STAKE, (KLM)'S 30%, AND TOTAL 90%, PENDING GOVERNMENT APPROVAL. (BRT) WILL REMAIN AS A SEPARATE COMPANY WITH ITS OWN IDENTITY.
1ST Q = 5.38 BILLION RPK (+6%), 151.67 MILLION FTK (-7%), 5.55 MILLION PAX (+3%).
DASH 8-402 (4044, LN-RDU "ELDE VIKING") DELIVERY.
JULY 2001: 1 A340-313X (413, SE-REA) DELIVERY.
AUGUST 2001: 1ST 6 MONTHS = +# SEK141 MILLION (+# SEK550 MILLION).
EXPECTS TO CUT ANNUAL CAPACITY (ASK) BY 6-7%, BUT ANTICIPATES TRAFFIC (RPK) TO GROW +6%.
IN 5/02, COPENHAGEN - SAN FRANCISCO (SFO) (A340-300).
2 DC-9-41'S (47747; 47777) WITHDRAWN FROM USE (WFU) AT ROSWELL.
SEPTEMBER 2001: IN 1/02, CODE SHARE WITH AIR-INDIA (AIN), COPENHAGEN TO NEW DELHI.
IN AFTERMATH OF ISLAMIC, TERRORIST ATTACKS ON NEW YORK WORLD TRADE CENTER (WTC) TOWERS AND PENTAGON, SCANDINAVIAN AIRLINES (SAS) WILL CUT CAPACITY (ASK'S) BY -12%, AND GROUND -16 AIRPLANES (INCLUDING -3 767-300ER'S; -10 SHORT-HAUL & -3 RJ'S).
A340-313X (424, SE-REB "GUDROD VIKING"), DELIVERY.
OCTOBER 2001: ACCDT: MD-87 (53009, /91 26 17, SE-DMA) ON TAKEOFF IN DENSE FOG AT MILAN LINATE AIRPORT, STRUCK A CESSNA CITATION II ON THE RUNWAY AND SUBSEQUENTLY RAN INTO A NEARBY BUILDING = ALL 6/104 FATALITIES ON MD-87, +4 ON CITATION. THE CITATION WAS ON THE WRONG RUNWAY.
TOP WORLD AIRLINES 1ST 9 MONTHS TRAFFIC RPK (BILLION):
18 KAL 27.24; 19 AMW 24.2; 20 VAR 19.81; 21 CHI 19.70; 22 SAS 18.17; 23 EAD 17.59; 24 ANA 15.31; 25 ASA 15.31.
GROUNDS 10 737/DC-9/MD-80'S, 3 767'S, AND 3 DASH 8-400Q'S.
NOVEMBER 2001: INCREASES ITS STAKE IN SPANAIR (SPP) TO 74% BY AGREEMENT WITH (SPP)'S PRINCIPAL SHAREHOLDER, TEINVER. INCREASES ITS STAKE IN AIR BALTIC (BAU) TO 47%.
WILL CUT -2,500 STAFF.
1ST 9 MONTHS = 1.56 BILLION RPK (-3.5%); +9.1% ASK; 65.4% LF (-8.6); 51.4 MILLION FTK (-13.1%). 3RD Q = -$19.4 MILLION.
GOTEBORG (LANDVETTER) TO BRUSSELS IN 12/01 (737-600, 2/DAY).
737-883 (1014-29325, LN-RRS) DELIVERY. 767-383ER (24476) RETURNED TO LESSOR. 1ST OF 12 A321-200 DELIVERIES. 2 A321-231'S (1587, OY-KBK; 1619, OY-KBL) AND 2 A340-313X'S (430, OY-KBI; 435, OY-KBA) DELIVERIES. DEFERS DELIVERY OF 3RD A330-200. DEFERS 5 REMAINING ORDERS OF DH Q400'S INDEFINITELY.
DECEMBER 2001: 1 737-883 (1036-28326, LN-RRT) DELIVERY. 1 A321-231 (1642, OY-KBB) DELIVERY.
JANUARY 2002: TO POSTPONE DELIVERY OF 4 737'S, 9 A321'S & 1 A330-300. 2 DC-9-41'S (725-47610; 756-47634) WFU AT OSLO. 2 MD-87'S (1457-49585; 1472-49596) WFU AT OSLO.
2001 TOP 50 WORLD AIRLINES - TRAFFIC BILLION RPM:
1 UAL 116.60; 2 AAL 106.15; 3 DAL 97.60; 4 NWA 73.11; 5 BAB 64.24; 6 AFA 59.54; 7 CAL 58.76; 8 DLH 56.76; 9 JAL 50.77; 10 USA 45.93; 11 SWA 44.50; 12 SIA 42.76; 13 QAN 42.14; 14 ACN 41.49; 15 KLM 35.76; 16 ANA 33.16; 17 CAT 27.81; 18 TII 27.43; 19 IBE 25.64; 20 KAL 23.73; 21 ALI 22.45; 22 MAS 22.29; 23 AMW 19.06; 24 VAA 17.65; 25 VAR 16.02; 26 CHI 16.00; 27 EAD 14.37; 28 SAS 14.26; 29 ANZ 13.54; 30 SAA 12.70; 31 SVA 12.56; 32 BEJ 12.39; 33 ASA 12.23; 34 JAS 10.06; 35 THY 9.35; 36 AMX 8.51; 37 PAL 8.36; 38 GIA 8.15; 39 CMA 7.99; 40 ELA 7.79; 41 GUL 7.65; 42 PIA 7.24; 43 AIN 7.10; 44 TAP 6.43; 45 EGP 5.53; 46 OLY 5.24; 47 AUL 5.06; 48 FIN 4.93; 49 IND 4.52; 50 CQT 4.51.
MARCH 2002: LUFTHANSA CARGO (LUB) MAKES BID FOR 40% - 49% OF SCANDINAVIAN AIRLINES (SAS) CARGO, WHO ALSO PARTNER WITH SINGAPORE AIRLINES CARGO (SIA) AS PART OF NEW GLOBAL CARGO VENTURE. NEW GLOBAL CARGO VENTURE WITH (DLH) AND (SIA) TO BE CALLED "WOW."
(TELEPHONE: (8) 797 00 00). (FAX: (8) 85 79 80).
(SAS) MAY TAKE 25.1% OF (LOT) POLISH AIRLINES, HELD BY SAIR GROUP (SWS).
2001 = -$100.4 MILLION. PRE-TAX = -$108 MILLION/-#1.14 BILLION CROWNS (+#1.72 BILLION CROWNS): 23.3 BILLION RPK (+2%); 21.54 MILLION PAX (-.8%); 64.6% LF (-2.4); 621.83 MILLION FTK (-9%).
JOERGEN LINDEGAARD, (CEO) SAYS (SAS)'S AIRLINE SITUATION IS
"PRECARIOUS" AND THE COMPANY HAS NO CHOICE, BUT "TO ADJUST DOWNWARDS" THROUGH PREVIOUSLY ANNOUNCED RESTRUCTURING.
APRIL 2002: 22,656 EMPLOYEES.
TOP WORLD AIRLINES (2001 TRAFFIC - BILLION RPK):
17 IBE 41.30; 18 KAL 37.95; 19 ALI 36.52; 20 AMW 30.69; 21 VAR 26.01; 22 CHI 25.06; 23 SAS 23.30; 24 EAD 23.12; 25 GUN 22.8.
MAY 2002: 5th anniversary of Star Alliance (SAL): (ACN); (ANZ); (AUL);(BMA); (CMA); (DLH); (LAL); (SAS); (SIA); (TII); Tyrolean; (UAL); & VAR).
1ST Q = -$129 MILLION/-#1.32 BILLION KRONOR (+#13 MILLION KRONOR): -1.1% RPK; -7.1% PAX.
(SAS) IS EVALUATING BIOMETRIC TECHNOLOGY TO SIMPLIFY CHECK-IN AND BOARDING PROCEDURES USING SMART CARDS, THAT CONTAIN TRAVELLERS' FINGERPRINTS. THE PASSENGER PRESSES A FINGER AGAINST A SCREEN AND HIS/HER IDENTITY IS VERIFIED WHEN THE FINGERPRINT IS MATCHED "LOCALLY" WITH THE ONE STORED ON THE CARD. SCANDINAVIAN INFO TECHNOLOGY (IT) GROUP AND PRECISE BIOMETRICS ARE PARTNERS WITH (SAS) FOR THIS PROJECT.
WITH ACQUISITION OF BRAATHENS (BRT), (SAS) NOW HAS TOTAL 35,000 EMPLOYEES.
July 2002: 2001 (SAS) GROUP = -$103.21 MILLION (+$207 MILLION): 23.3 BILLION RPK (+2%); 64.8% LF; 23.24 MILLION PAX (-1%); 621.83 MILLION FTK (-9%); 22,656 EMPLOYEES (-13.3%). 1st 6 months = 12.01 BILLION RPK (+3%); 11.61 MILLION PAX (-2%); 221.49 MILLION FTK (+10%).
6 DC-9-41's (17597; 17599; 17646; 17747; 17748; 17750) returned to Air 41.
August 2002: 2nd Q = +# SEK968 Million/+$101 Million (+# SEK128 Million): due to lower fuel costs, lower airplane maintenance costs, and reduced production.
A321-232 (1798, OY-KBE) delivery.
September 2002: 1 A321-232 (1807, OY-KBF) delivery.
October 2002: Lays off -300 pilots (FC).
1st 9 months = 23.58 Billion RPK (-5.3%), -9.9% ASK, 66.4% LF (+3.3).
1st 6 months Top World Airlines Traffic Billion RPK:
1 AAL 95.18; 2 UAL 84.56; 3 DAL 74.53; 4 NWA 56.50; 5 BAB 49.30; 6 AFA 48.21; 7 CAL 47.49; 8 DLH 42.06; 9 JAL 39.44; 10 SWA 36.03; 11 SIA 36.00; 12 ACN 33.69; 13 USA 33.06; 14 KLM 27.54; 15 CAT 23.07; 16 IBE 19.53; 17 KAL 16.47; 18 CHI 15.70; 19 AMW 15.20; 20 ALI 14.21; 21 EAD 13.45; 22 VAR 12.68; 23 GUN 12.49; 24 SAS 12.01; 25 BEJ 10.32.
DC-9-41 (47779) returned to lessor. A321-231 (1817, LN-RKI) & 1st 2 A330-343X's (Trent 772B) (496, OY-KBN; 497, LN-RKH "EMUND VIKING"), 261 PAX, deliveries, for operations to Newark, from its Copenhagen hub, with flights from Stockholm in 2003.
November 2002: In 12/02, Stockholm (ARN) to Hemavan (Dash 8-Q400, 2/week).
(MOU) with Connexion by Boeing (TBC) for installation of broadband and Internet service on 11 Scandinavian Airlines (SAS) long-haul airplanes, with options for expansion on more airplanes in 2004. (SAS) flight services are in a highly Information Technology (IT)-mature part of the world. Customer demand has dictated they want to have leading-edge mobile communications, stated Jens Willumsen, (SAS) Head Marketing & Product Management. Lufthansa (DLH) will begin service demos in 1/03, followed by British Airways (BAB) in 2/03, and Japan Air Lines also signed on as a customer. This fee-based service, will allow passengers to surf the World Wide Web, send e-mail, watch TV from 5 broadcasters including (CNN), and perform other Internet-based functions. A computer server on the airplane sends info to satellites that connect with ground based relay stations to the Internet.
3rd Q = +# SEK 506 Million/+$56.5 Million (-# SEK 208 Million). 1st 9 months = 18.82 Billion RPK (+2%); 17.65 Million PAX (-2%); 476.24 Million FTK (+6%).
Won its dispute with Swedish civil aviation administration (LFV) pertaining to payment liability for Terminal 2 at Stockholm (Arlanda), and (LFV) had to pay (SAS) # SEK 600 Million/$66.6 Million comprising # SEK 400 Million in fees, and #SEK 200 Million in interest charges.
1st 9 months Top World Airlines Traffic RPK Billion:
1 AAL 148.39; 2 UAL 132.89; 3 DAL 123.75; 4 NWA 88.26; 5 BAB 76.23; 6 AFA 74.00; 7 CAL 73.12; 8 DLH 67.07; 9 SIA 55.60; 10 SWA 55.20; 11 JAL 54.81; 12 ACN 54.41; 13 USA 50.38; 14 KLM 48.87; 15 QAN 43.76; 16 CAT 36.14; 17 IBE 30.78; 18 KAL 28.06; 19 AMW 23.82; 20 TII 19.76; 21 ALI 19.68; 22 SAS 18.82; 23 CHI 18.23; 24 VAR 17.47; 25 GUN 17.21.
3 737-683's (28304; 28305; 28306) stored at Oslo. DC-9-41 (47610) returned to lessor. 3 MD-82's (53294; 53295; 53296) stored at Dinard. 2 MD-82's (49421; 49557) WFU. 2 A321-231's (1848, SE-REG "Svipdag Viking;" 1675, OY-KBH "Sulke Viking"), deliveries.
December 2002: Plans to launch "Scandinavian Lite," the working name for repackaged leisure services from Copenhagen and Stockholm (ARN), to destinations that include Alicante, Athens, Bologna, Budapest, Lisbon, Malaga, Palma de Mallorca, Prague, Pristina, Sarajevo, and Rome. Single (Y) class operations will focus on point-to-point traffic, with passengers paying for extras such as meals, aping its low-cost rivals. Scandinavian Lite will have 4 737-800's and a separate organization.
Plans to cut -2,700 jobs, including -15% pilots (FC).
DC-9-41 (47624) returned to lessor. 5 MD-80's (1415-49556) sold to Wells Fargo for lease to Allegiant Air (WJE).
January 2003: Scandinavian Airlines (SAS) Technical Services and (EADS) Sogerma Services inked a material supply accord, under which Sogerma Components Business Center and (SAS) Component will cooperate on services for A320 series, A330's, and A340's.
(SAS) has taken over all (DLH) services between Munich and Stockholm.
Will face more challenges when Ryanair (RYR) opens Skavsta Airport, 100 km south of Stockhom as its 4th continental base and in 4/03 will base 4 737-800's there, offering >30 flights daily on 6 international routes to Aarhus, Glasgow, Hamburg, Paris, Oslo, and Tampere. It already serves Skavsta from London and Frankfurt Hahn. Will result in +200 jobs in the Stockholm area and expects >1.5M passengers through the airport in the 1st year.
767-383ER (337-24477, OY-KDL) stored at Nimes. 2 DC-9-41's (47626; 30) returned to Air 41. Will acquire 8 MD-90-30's ex-(AMC) (AMF), & ex-Reno (RNO) from Boeing (TBC) in exchange for 16 MD-80's, which have started to retire. May wet-lease several MD-80's & 737's to Lufthansa (DLH). Delays deliveries of 4 A321-200's from 2004 - 2005 until 2005 - 2006.
February 2003: 4th Q 2002 (SAS) Group, including (BRT), (SPP), Air Botnia & Wideroe = -# SEK 284 Million/-$33 Million (-# SEK 997 Million). (SAS) 4th Q = -# SEK 224 Million. 2002 (SAS) Group = -# SEK 132 Million (-# SEK 1.06 Billion): 24.58 Billion RPK (+6%); 23.12 Million PAX (-1%); 627.40 Million FTK (+1%).
DC-9-41 (748-47632, OY-KGO) returned to lessor. A330-343X (515, SE-REE) delivery.
March 2003: Oslo - Dublin (737, 4/week), and Manchester (737, 6/week). In 4/03, Oslo - Prague (737/MD-80 2/week). Copenhagen - Sarajevo (daily).
(SAS) confirmed its interest in being the sole potential buyer for a stake in Lithuanian (LIJ). (LIJ) wants to sell a 34% stake to an investor who will commit to raising that to 66%, valued at $3.9 Million, with the state retaining 34%. In 2002, (LIJ) carried 300,000 passengers on routes to 13 countries from Vilnius, with a fleet of 7 airplanes. Final bids are due by 6/03, and deal is expected to be concluded by 8/03.
Unveils its new low-fare airline name as "Snowflake," which will operate 4 737-800's, 150 PAX, staffed with (SAS) pilots (FC) and cabin (CA) crew, from Stockholm to Alicante, Athens, Barcelona, Bologna, Budapest, Dublin, Istanbul, Malaga, Nice, Prague, and Rome, plus from Copenhagen to Alicante, Athens, Bologna, Lisbon, Malaga, Palma de Mallorca, Pristina, and Sarajevo. "Snowflake" home page:
2 DC-9-41's (744-47629; 831-725) returned to Finova (GRB). MD-82 (1436-49557), withdrawn from use (WFU) and sold.
April 2003: To cut -4,000 jobs (-11.3%) by 2005, under plan to reduce unit costs -30%.
22,364 employees. (FAX: +46 8 797 1515).
3 737-683's (28304; 28305; 28306) wet-leased 1 year to Air Europa (ARE). 767-383ER (412-26544) returned to lessor.
May 2003: (SAS) will consolidate its Maintenance Repair & Overhaul (MRO) activities at Stockholm Arlanda Airport. This step is intended to save # Sek500 Million/$62.6 Million. Currently, its medium-heavy airplane maintenance is split among all three of its bases: Copenhagen, Oslo, and Stockholm. Additionally the strategic management of its Technical Services and its support functions will be located at Stockholm. Line maintenance will continue at all three previous locations, while heavy maintenance activity will continue at Oslo Gardermoen. The change will result in the elimination of -922 full-time Maintenance Technicians (MT) positions at (SAS) Technical Services: -426 in Denmark; -417 in Norway; & -69 in Sweden, leaving total 2,700 Maintenance Technicians (MT).
1st Q (SAS) Group after-tax = -# Sek 1.6 Billion/-$201 Million (-# Sek 1.3 Billion): 6.6 Billion RPK (-4.2%); -.4% ASK; 58.7% LF -2.3); 6.9 Million PAX (-8.2%). (SAS) = 4.9 Billion RPK (-6.3%); -3% ASK; 4.4 Million PAX (-12.1%). Structural turnaround efforts including -4,000 jobs.
Its new low-fare subsidiary, Snowflake, will operate 3 new routes in 10/03: Stockholm - Beirut (Mondays); Stockholm - Lyon (Wednesdays & Saturdays); & Stockholm - Belgrade (Wednesdays & Fridays). Also, Copenhagen - Istanbul (Mondays & Fridays). Possible starting Snowflake flights in Norway.
MD-82 (1553-49728, SE-DIK) stored at Riga.
June 2003: Scandinavian Airlines (SAS) and (EADS) Sogerma Services took their cooperation to the next level by signing an accord toward complete service integration after having first gone into business together in 12/02. The latest move includes "shared component pools with the possibility to create hub-and-spoke accessibility for joint customers," said Per Boll,(SAS) VP Technical Services/Components. The next step is development by autumn of integrated logistics services. The ultimate goal of the cooperation is to offer to the market a complete material supply program for Airbus (EDS) airplanes.
767-383ER (358-24729) returned to Nordea Finance, Sweden. MD-83 (1415-49556), sold to Allegiant Air (WJE). F28-4000 (11204) sold to Airquarius.
July 2003: Contracted with "Connexion by Boeing" to equip its long-haul airplanes with high-speed wireless broadband internet access. The year-long installation process will begin in 2/04. Scandinavian Airlines (SAS) will be the 1st to invest exclusively in wireless technology (IEEE 802.11 - standard) for Internet onboard. (SAS) was also 1st to introduce wireless access to its lounges in 1999.
2002 = -$13.7 Million (-$103.1 Million): 23.21 Billion RPK (+1.1%); -4% ASK; 68.1% LF (+3.5); 21.9 Million PAX (-5.2%); 829 Million FTK (+7.6%); 7,556 EMPLOYEES.
2002 TOP 25 WORLD AIRLINES - TRAFFIC - Billion - RPK
1 (AAL) 195.81; 2 (UAL) 176.15; 3 (DAL) 152.66; 4 (NWA) 115.91; 5 (BAB) 99.71; 6 (AFA) 96.80; 7 (CAL) 95.51; 8 (DLH) GRP 88.57; 9 (JAL) 83.54; 10 (QAN) 75.23; 11 (SWA) 73.05; 12 (SIA) 71.12; 13 (ACN) 69.42; 14 (USA) 69.42; 15 (KLM) 58.89; 16 (ANA) 52.97; 17 (CAT) 49.04; 18 (TII) 48.51; 19 (KAL) 41.80; 20 (IBE) 40.47; 21 (MAS) 36.90; 22 (AMW) 31.98; 23 (SAS) GRP 30.91; 24 (EAD) 30.17; 25 (ALI) 29.84.
2 MD-82's (1665-49913, SE-DIL; 800-98, SE-DIX), wet-leased to Spanair (SPP). MD-83 (1436-49557) sold to Allegiant Air (WJE).
August 2003: Copenhagen - Basra (767-300ER, weekly).
Lufthansa Cargo (LUB) unveiled its 1st airplane in "(WOW)" livery, an MD-11F, representing the (WOW) Cargo alliance, encompassing Japan Airlines (JAL) Cargo, Lufthansa Cargo (LUB), (SAS) Cargo, and Singapore Airlines (SIA) Cargo. Has the biggest air cargo partnership with a 20% market share. In 9/03, will inaugurate an exclusive common cargo terminal in Cargo City North, Frankfurt to handle alliance shipments. Each of the 4 cargo carriers since 7/03 has been setting up to 10% of each's capacity for the express shipments of the other 3 partners. They have agreed on a unified Information Technology (IT) support and common quality service and handling standards in order to guarantee the uniformity and reliability of their services.
(SAS) Group 2nd Q = +# SEK 66 Million/+$7.9 Millionj (+# SEK 968 Million/+$106 Millionj).
(SAS) Component contracted with (ITS) Technical Services of Reykjavik to support 767-300 component supply and maintenance through its "Free2Fly" material supply program. A subsidiary of the Flugleidir Group, (ITS) has technical responsibility for the operation of its parent company's 767-300 fleet.
(SAS) awarded (ARINC) a long-term contract for expanded air/ground
communications services, including the 1st use of (ARINC)'s new (VDL) Mode 2 service in European airspace.
MD-82 (1345-49437, LN-RLR), removed from storage. MD-82 (1283-49423), leased to Allegiant Air (WJE). DC-9-41 (47779) scrapped by Finova (GRB) at Roswell.
September 2003: Scandinavian Airlines (SAS) acquires Maersk Air (MRS)'s 49% stake in Estonian Air (ENA) for # Sek 180 Million/$22.1 Million. (ENA) will continue to operate as an independent airline under its own brand. Its other shareholders are the Estonian government with (34%), & Estonian Investment Banking firm AS Cresco with (17%). (SAS) stated the acquisition was part of "its strategy to strengthen its position in the Baltic region.
(SAS) Flight Academy signed a contract with Civil Aviation Flight College (CAFC) in Guanghan, China, covering instructor training. 12 (CAFC) instructors will begin training at (SAS) Flight Academy facilities in Stockholm in 11/03.
(SAS) Group sells 5 office properties in Copenhagen to Danish-based Keops, to release capital of approximately # SEK 1 Billion/$129.9 Million and will reduce its net debt by a similar amount. Then signed a lease agreement for 10 to 15 years for use of the properties in the future.
October 2003: Ends its cooperative agreement with Maersk Air (MRS).
Copenhagen - Bologna (737-600, 5/week). In 3/04, Copenhagen - Athens, Venice (daily). Stockholm (ARN) - Edinburgh (737-600, 6/week). Snowflake, Copenhagen - Ankara, Beirut, Split, Malta, & Skopje. In 3/04, Stockholm - Inverness (2/week). In 4/04, charters on behalf of Apollo/Kuoni from 8 airports in Scandinavia to Algeria, Bulgaria, Croatia, Greece, Spain, and Turkey.
767-383ER (325-24848, OY-KDN) wet-leased to Air Holland (HOL).
November 2003: In 8/04 will open its 3rd Training Center, a facility taking shape at Oslo Gardermoen. Anchor customers will be (SAS) Group carriers, Braathens (BRT), (SAS), and Wideroe. Will include 3 full flight simulators: 737NG, 737 Classic, & a Dash 8-100/-300, plus equipment for cabin crew (CA) training for the same airplane types. A building to house the center which is under construction will include classrooms, rooms for briefing and debriefing & (CBT) stations. The (SAS) Flight Academy operates training centers in Stockholm and Copenhagen for pilots (FC), cabin crew (CA), maintenance technicians (MT), and ship's officers. It offers training for 12 different airplane types ranging from regional to long-haul airplanes and helicopters.
3rd Q Pre-tax (SAS) Group = +# SEK 564 Million/+$72.2 Million (-11.9%) (+# SEK 640 Million). (SAS) is by far the largest of the Group's 6 carriers: Spanair (SPP); Braathens (BRT); Wideroe; Blue1 (formerly Air Botnia) and 49% of Estonian (ENA). (SAS) = -# SEK 178 Million. 3rd Q Net = +# SEK 699 Million (+32%). 9 months = -# SEK 834 Million (+# SEK 152 Million).
In another cost-reduction measure, it intends to sell its Information Technology (IT) operations, Scandinavian (IT) Group, and then outsource its (IT) operations to the new owner.
Pays +# EUR 73.5 Million/+$86.5 Million to increase its stake in Spanair (SPP) from 73.9% to 94.9%. The remaining 5.1% is held by Teinver. Is interested in the 25% stake in (LOT) held by Swiss (SWS).
F28-4000 (11126) sold to Jet Aviation.
December 2003: Scandinavian Airlines (SAS) Group's wholly owned subsidiary, RampSnake A/S has a contract with (FMC) Technologies. (SAS) will purchase 80 RampSnake airplane loaders from (FMC). The transaction including sale of assets and the RampSnake (A/S) business as well as a worldwide license to market, sell and produce the RampSnake product. (SAS) retains control of a number of patents that protect RampSnake, which was developed from a concept aimed at enhancing efficiency and facilitating the loading & unloading of airplanes.
(SAS) Group sells its Scandinavian Information Technology (IT) Group for ># SEK 2 Billion/$275 Million to USA-based Computer Sciences Corporation.
(SAS) has doubled its cost-cutting target for its subsidiary, Braathens (BRT), to # Sek 1 Million/$137 Million under its "Turnaround 2005" program. With the new measures, (BRT) will reduce its unit cost about -20% to # Nok 0.6/$0.09 per ASK, a figure that "is fully competitive with both Norwegian (NWG) and international low cost airlines." The additional measures comprise a broad number of activities, including increasing productivity of airplanes, pilots (FC), cabin crews (CA) and administration, plus focussing on increased Internet sales and ticketless travel.
In 3/04, Copenhagen - Pudong (A340, 3/week). Oslo - Berlin (Tegel) (daily). Copenhagen - Krakow/Zagreb (4/week). In 3/04, (SAS) Finnish subsidiary Blue1 (formerly Air Botnia) will launch Helsinki - Hamburg (RJ85, 2/day) & Helsinki - Dusseldorf.
Will delay delivery of 4 A321's from 2004 & 2005 to 2006 & 2007 respectively.
In 8/04 will open a flight academy in Oslo supplementing existing training centers in Copenhagen and Stockholm.
Is considering the sale of its hotel chains, including the Radisson (SAS).
January 2004: Star (SAL) Alliance (SAS) is one of 15 members) signed a 5-year Information Technology (IT) accord with (BEA) Systems Inc, San Jose, California, an application infrastructure software firm. The contract gives (SAL)'s 15 members "the opportunity to introduce (BEA)'s innovative application platform suite at a cost no single airline would be able to negotiate" said Michael Stagl, Star (SAL) (CIO). United Airlines (UAL), Lufthansa (DLH), & Singapore Airlines (SIA), as well as the (SAL) alliance itself have developed ticketing, baggage handling, and loyalty software applications on the (BEA) WebLogic platform in recent years. Under the new agreement, (BEA) WebLogic Server and (BEA) WebLogic Integration become Star (SAL)'s preferred application server and integration software.
In 3/04, Stockholm - Dublin (MD-87, 6/week); Copenhagen - Tampere (Dash 8, 6/week).
(SAS) Group 2003 = -# SEK1.5 Billion/-$195.3 Million (+226%) (-$18.2 Million): +21.9% (-5.6%); 65.7% LF (-2); 19.26 Million PAX (11.9%); 724.8 Million FTK (-7..6%).
February 2004: In 3/04, Stockholm (ARN) - Manchester (6/week) & - Prague (4/week). Snowflake, Stockholm - Bilbao/Olbia (2/week).
3 737-883's (28319; 28320; 28321) sold to Hainan Airlines (HNA).
March 2004: Plans to split into 4 separate firms: 3 business units from Denmark, Norway, & Sweden, for its European operations, and a 4th international unit for long-haul flights. The Norwegian (SAS) will be renamed (SAS) Braathens.
Bmibaby (BMA) coordinates marketing and sales efforts with GermanWings (RFG), who are discussing similar agreement with (SAS) Snowflake and (LOT) Polish Airlines.
Stockholm (ARN) - Dusseldorf (Dash 8, daily).
Is replacing 737-800's operating for Snowflake with MD-82's. MD-82 (49421) operates for Snowflake.
3 737-683's (28304; 28305; 28306) returned from Air Europa (ARE). 2 737-883's (28323; 30467), leased to (ARE).
April 2004: Kenneth Marx, 40, President & (CEO), (SAS) Cargo Group, succeeding Peter Gronlund who will become President & (CEO) of Scandlines.
2 737-883's (28321; 30193) sold to Hainan Airlines (HNA). MD-82 (49909) wet-leased to JetX (JTX).
May 2004: (SAS) Group 1st Q = -# Sek 1.4 Billion/-$185.1Million (-# Sek 1.6 Billion): 7.03 Billion RPK (+7.3%); +6.1% ASK; 59.3% LF (+.7).
Intends to exercise options to take majority stakes in Air Baltic (BAU) and Estonian Air (ENA).
737-683 (28304) returned from Air Europa (ARE) & 737-883 (30467) returned from Air One (ADH) and leased to (ARE). 737-883 (668-30468, OY-KKT) leased to Air Europa (ARE). MD-82 (1402-49555, LN-RMD), leased to JetX (JTX). MD-82 (49998) WFU. MD-82 (49913) leased to Spanair (SPP).
June 2004: JetX (JTX) signed a long-term maintenance agreement with Scandinavian Airlines (SAS) Technical Services for the 2 MD-82's.
Star (SAL) Alliance: Air Canada (ACN); Air New Zealand (ANZ); All Nippon Airways (ANA); Asiana (AAR); Austrian (AUL); Blue 1 (applicant); bmi (BMA); (LOT) Polish Airlines; Lufthansa (DLH); Scandinavian (SAS); Singapore Airlines (SIA); South African Airways (SAA) (applicant); Spanair (SPP); (TAP) Air Portugal (applicant); Thai Airways (TII); United Airlines (UAL); US Airways (USA); & Varig (VAR).
767-383ER (24849) returned to (AAR). 2 MD-82's (49728; 49999) wet-leased to Spanair (SPP).
July 2004: Contract with Connexion by Boeing to provide wireless (LAN) Internet communication systems for 4 A330-300's & 7 A340-300's with instl by Lufthansa Technik (LTK) (DLH).
August 2004: Scandinavian Airlines (SAS) cargo appointed Teddy Zebitz, VP Route & Revenue Management Division & Jimmy Kjaersvold, VP Commercial division.
In 2004-10, Stockholm Arlanda to Nice, Athens, Istanbul, Rome, Stuttgart, Hamburg, and Budapest. In 2005-01, Copenhagen - Ostersund (weekly charters) for SkiStar.
737-883 (32277, SE-DTR "Saga Viking") delivery. MD-81 (53314, SE-DMB) returned to service (RTS).
September 2004: In 2004-10, will create Scandinavian Airlines (SAS) Technical Services from primarily being Scandinavian Airlines' internal maintenance function to an independently operating incorporated subsidiary named (SAS) Technical Services AB (STS), with Urnulf Myrvoll, President. This follows an expansion strategy which allows (STS) to take full advantage of its leading position in the Scandinavian and Baltic markets for full-service (MRO) activities. The (MRO), which has an annual turnover of approximately # EUR 650 Million/$796.9 Million, currently employs 3,800 staff at bases & facilities in Stockholm, Gothenburg, Copenhagen, Oslo, Stavenger, Bergen, & Tallinn. Its biggest customer is (SAS) but it has contracts with >130 other jet airplane operators and services some 200 airplanes.
Has expressed interest in the planned sale of Bulgaria Air (LZB). Also wants to raise its stakes in the airlines of Air Baltic (BAU) and Estonian Air (ENA) to majority holdings.
Scandinavian Airlines (SAS)'s transport workers union (has 2,000 members in airline industry in Scandinavia, half of whom are employed by (SAS) is threatening to go on strike if demands for wage rises of +7.3% over 3 years are not met. The struggling (SAS) wants to keep the 2004 wages frozen, saying it cannot afford such a wage increase, and would have to close down the business.
In 2004-10, Stockholm - Athens.
MD-82 (1800-49998) sold to Allegiant (WJE).
October 2004: Code share with Air Baltic (BAU), Riga to Vilnius. Snowflake, Copenhagen - Beirut/Cairo.
Scandinavian Airlines (SAS) Component was transformed from a business unit under (SAS) Technical Services into an independent limited company owned by (SAS) Technical Services. The incorporation will have no effect on (SAS) Component's market activities or partnerships and Per Boll will continue to serve as CEO.
767-300ER, United Airlines (UAL) wet-leased through 4/05 for Copenhagen - Washington Dulles route and provide extra capacity.
Switched 4 orders A321's to A319's with first due in 2/05.
November 2004: Scandinavian Airlines (SAS) Cargo switches from Lufthansa Cargo (LUB) to Middle East Airlines (MEA) and Emirates SkyCargo (EAD) to support its cargo services for Gothenburg to Hong Kong (747-400F, 2/week).
Andris Zvejnieks, Director Corporate Communications.
December 2004: In 2005-03, Stockholm (Arlanda) - Malta, Split.
MD-82 (49554), sold to Allegiant Air (WJE).
January 2005: (SAS) Group 2004 = -Sek 1.87 Billion (-Sek 1.41 Billion): 32.84 Billion (RPK) traffic (+8%); +7.6% (ASK) capacity; 63.7% LF (+.2).
March 2005: Star Alliance (SAL) partners (TAP) Air Portugal, All Nippon (ANA), bmi (BMA), Lufthansa (DLH), Thai (TII), Adria Airways (ADR), & (SAS) will all start using Terminal 1 at Paris Charles de Gaulle (CDG) which will have 8 Million passengers/year and will become a minihub for these carriers.
Scandinavian Airlines (SAS) continues its plan to take over 100% of AirBaltic (BAU) (now owns 47.2%) & Estonian (ENA) (owns 49%).
May 2005: Begins offering wireless high-speed Internet access on all of its intercontinental flights. The airlines has installed (SAS) Net Access service provided by Connexion by Boeing on all A330-300's & A340-300's it operates to the USA and Asia. The service can be accessed from all 261 seats in business (C), Economy Flex, and economy (Y) classes.
737-683 (28303) sold to FlyGlobeSpan (FGC).
June 2005: Scandinavian Airlines (SAS) is a multinational airline for Denmark, Norway, and Sweden, serving almost 100 destinations in 33 countries, operating an average of 1,000 jet airplane flights/day.
(IATA) Code: SK - 117. (ICAO) Code: SAS (Callsign - SCANDINAVIAN).
Parent organization/shareholders: Publicly held (50%); Swedish government (21.4%); Danish government (14.3%); & Norwegian government (14.3%).
Owns: AirBaltic (BAU) (47.2%); Air Greenland (GRL) (37.5%); Aerolineas de Baleares (25%); Blue 1 (BLF) (100%); bmi British Midland (BMA) (20%); Braathens Sweden (BRT) (100%); Estonian Air (ENA) (49%); (SAS) Cargo (100%); Skyways Holding (25%); Snowflake (100%); Spanair (SPP) (94.9%); & Wideroe's Flyveselskap (99.6%).
Alliances: Star Alliance (SAL); Air China (BEJ); AirBaltic (BAU); CHC Helikopter Service; Emirates (EAD); Estonian Air (ENA); Icelandair (ICE); Midwest Connect; Pulkovo Airlines (STG); & Wideroe's Flyveselskap.
Main Base: Copenhagen (Kastrup) airport (CPH).
Hubs: Oslo (Gardermoen) airport (OSL); & Stockholm (Arlanda) airport (ARN).
Domestic, scheduled destinations: Angelholm/Helsingborg; Gothenburg; Kalmar; Kiruna; Lulea; Malmo; Ornskoldsvik; Ostersund; Ronneby; Skelleeftea; Stockholm; Sundsvall; Umea; & Vaxjo.
International, scheduled destinations: Aalborg; Aalesund; Aarhus; Aberdeen; Alicante; Alta; Amsterdam; Asturias; Athens; Bangkok; Barcelona; Bardufoss; Beijing; Beirut; Bergen; Berlin; Bilbao; Billund; Birmingham; Bodo; Bologna; Brussels; Budapest; Cairo; Chicago; Copenhagen; Dublin; Dusseldorf; Edinburgh; Frankfurt; Gdansk; Geneva; Hamburg; Hanover; Harstad-Narvik; Haugesund; Helsinki; Istanbul; Kirkenes; Krakow; Kristiansand; Kristiansund; Las Palmas; Lisbon; London; Longyearbyen; Madrid; Malaga; Manchester; Milan; Molde; Moscow; Munich; New York; Nice; Oslo; Palma de Mallorca; Paris; Poznan; Prague; Pristina; Rome; Santiago de Compostela; Sarajevo; Seattle; Shanghai; Singapore; St Petersburg; Stavanger; Stuttgart; Tallinn; Tenerife; Tokyo; Tromso; Trondheim; Venice; Vienna; Vilnius; Warsaw; Zagreb; & Zurich.
Hakan Ericson, Executive VP Airline Support & Airline Related Businesses, ex-(DHL) Freight Europe (DHK).
Scandinavian Airlines (SAS) Technical Services AB will cut -120 jobs in its medium and heavy maintenance oranizations in Norway and Sweden, plus -80 jos in its line maintenance operation in Norway out of a total workforce of 3,700. The layoffs are part of (SAS) Group's "Turnaround 2005" program.
MD-83 (53295) to Allegiant Air (WJE).
August 2005: 9,254 employees (+1.2%).
September 2005: Scandinavian Airlines (SAS) Cargo is boosting capacity between Chicago and Copenhagen by 130 tons per week from September 22. Service will offered twice weekly via a blocked-space agreement using a 747-400F operated by Singapore Airlines Cargo (SQC).
(ARINC) reached separate agreements with (SAS) and Finnair (FIN) to provide the carriers with its Globalink satellite voice and data services.
October 2005: Scandinavian Airlines (SAS) claims it is the first carrier to offer customers Internet check-in using their mobile phones. (SAS) MobilePortal, launched in Sweden October 3 - 4, also permits customers to check flight times and their EuroBonus points from their phones. They can book rental cars, read the latest news and even order flowers. (SAS) expects to roll the service out to the rest of Scandinavia later this fall. It developed the mobile portal in cooperation with Digital Act Stockholm AB. The solution is based on the adimo mobile platform and works with both (GSM) and 3G subscriptions.
Michael Brag was appointed acting (CEO) of (SAS) Component following the departure of Per Boll. (SAS) Technical Services AB named Michael Brag its Chief Commercial Officer (CCO) and acting Managing Director of (SAS) Component A/S. Brag, 39, joined (SAS) Group in 2003 and is a member of the management board overseeing marketing, sales, partnerships and supplier agreements. (SAS) Technical Services holds full-service, jet airplane Maintenance Repair & Overhaul (MRO) contracts on more than >200 airplanes.
(SAS) is set to unveil a new efficiency program next month in response to continuing losses, particularly among its Swedish and Danish Scandinavian Airlines units, Group President and (CEO) Jorgen Lindegaard told media. The company already has reaped SEK 12.8 billion/$1.7 billion in savings out of a goal of SEK14 billion from its "Turnaround 2005" program, but that is not enough, Lindegaard said. "SEK 14 billion is fine, but we have to go [beyond] that. We have loss-making companies in Sweden and Denmark, which we won't allow [to make losses] next year."
As part of the new effort, (SAS) will make adjustments to its hub systems, particularly in Copenhagen, to eliminate unprofitable feeder routes. "Point-to-point traffic will become more important for us," he said, explaining that the company wants to have a hub system, but only "when it makes a profit. I don't believe that we get a premium for a hub system and we will spend less focus on this." He added that (SAS) hubs will not grow any larger.
The group also intends to devote more attention to its Spanish operation and has transferred five MD-80s to its profitable Spanair (SPP) subsidiary to team up with new Star (SAL) Alliance partners Swiss International Air Lines (CSR) and (TAP) Portugal and to add more domestic routes in Spain.
The jury is still out on whether (SAS)'s new simplified one-way pricing structure is working. Early indications are that yield deterioration of -5% to -10% was offset by improved load factor, up +6.7 points compared to last year. October should provide a more complete picture.
The fare structure puts (SAS) somewhat at odds with its Star (SAL) partners, but Lindegaard sees no alternative because people no longer accept the old structure "and business (C) class is still too expensive." He further believes that the Star (SAL) alliance has to revise its pricing structure to better reflect the realities of competition today.
He has a clear view of the Sterling (STR)/Maersk Air (MRS) merger, including a possible team-up with Icelandair (ICE): "The thing is easy. (ICE) will remain as a partner or will become a competitor in the future."
(SAS) said it reached an agreement with Worldspan under which the carrier will obtain "lower distribution costs" while distributing its "full content" to the Global Distribution System (GDS). (SAS) reached a similar agreement with Sabre earlier this month, while a deal with Amadeus occurred in August. Calling it "a step in the right direction," Senior VP Airline Commercial, Robin Kamark stated, "(SAS) wish[es] to give the market full access to our fares and products through the (GDS), but while doing so, we also need to reduce our distribution costs to a competitive level." (SAS) and Cendant Travel Distribution Services agreed to allow Galileo continued full access to (SAS)'s content. The airline said the contract followed months of negotiations and allows it to obtain lower distribution costs.
(SAS) Ground Services Norway will be the first European company to test infrared deicing. A hangar currently is being rigged at Oslo Airport.
2 737-783's (28315, LN-RNO; 28316, LN-RNP), leased to (SAS) Braathens (BRT).
November 2005: (SAS) Cargo finalized its purchase of Sterling (STR)'s cargo capacity, adding approximately +30,000 tons to (SAS) Cargo's annual European capacity.
All Nippon Airways (ANA) will move into the new South Wing of Narita Airport Terminal 1 in June 2006, along with fellow Star Alliance (SAL) members Air Canada (ACN), Asiana Airlines (AAR), Austrian Airlines (AUL), Lufthansa (DLH), Scandinavian Airlines (SAS), Singapore Airlines (SIA), Thai International (TII), United Airlines (UAL), and Varig (VAR).
(SAS) said there are "indications that the almost chronic overcapacity, primarily in Copenhagen, is beginning to ease." Spanair (SPP) had income after financial items of +SEK318 million, but the parent noted that the Spanish domestic market is characterized "by intensifying competition from new players."
(SAS) is eager to sell its 20% stake in bmi (BMA) and pull out of the loss-making joint venture with the British carrier and Lufthansa (DLH) on European routes, the "Financial Times" reported. In an interview with the newspaper, (SAS) Chief Executive (CEO), Joergen Lindegaard conceded that the (JV) cost the carrier SEK1.5 billion/£182.1 million in losses between 2000 and September this year. It expects a further loss from the venture of SEK450 million for the current year.
Under terms of the so-called European Cooperation Agreement (ECA) that came into effect in January 2000 and runs to the end of 2007, the three airlines, all members of the Star Alliance (SAL) operate a revenue- and profit-sharing joint venture (JV) comprising their European short-haul routes to and from London Heathrow and Manchester. Whereas (BMA) operates the largest number of routes covered by the (ECA), it carries only 10% of any losses, while Lufthansa (DLH) and (SAS) each carry 45%.
"It is a stupid contract but there is nothing I can do about it," Lindegard said. "We will look if a sale of the 20% [stake in (BMA)] is an option."
Earlier this year, Lufthansa (DLH) disclosed it had examined a possible sale of its (BMA) stake. (DLH) acquired an initial 20% from (SAS) in 1999 and currently holds 30%-minus-one share. (SAS) has 20% while (BMA) founder and Chairman Michael Bishop controls a majority stake of 50%-plus-one share. (BMA) holds 14% of the slots at Heathrow.
(SAS) Ground Services announced that Britannia Airways (TNS) is renewing its contract for ground handling services for three years. The deal covers more than 2,000 departures annually and will include automatic check-in for (TNS) customers at Stockholm, Oslo and Copenhagen.
Meanwhile, (SAS) Ground Services Norway AS will be the first ground handler in Europe to test infrared deicing. A hangar currently is being set up at Oslo and testing is expected to begin early next year.
(SAS) Group in keeping with its "ongoing program of capital release" agreed yesterday to sell European Aeronautical Group, its wholly owned navigation and flight planning subsidiary, to Canada's Navtech for SEK162 million/$20 million. The sale "fits with our strategy to focus mainly on our core business," (SAS) President and (CEO), Joergen Lindegaard said. "This acquisition is a significant step toward Navtech's strategic goal of becoming the premier supplier of integrated flight operations solutions to airlines around the world," Navtech President & (CEO), David Strucke said. With the acquisition, Navtech now services more than >200 airlines.
(SAS) and the Star Alliance (SAL) signed a two-year global travel agreement with Volvo AB, "which means that Volvo has selected (SAS) and the (SAL) Alliance as its main supplier of air travel," according to (SAS). It is the largest such agreement that the automaker has signed with an airline alliance, according to (SAS), and was completed after a year of tough competition with the SkyTeam (STM) alliance. It covers 12 of the (SAL) alliance's 16 members.
(SAS) Swedish operations could see a -5% to -6% drop in revenues if a proposed environmental tax on airline travel is enacted, the company warned. For flights within Sweden, the revenue decrease could reach -15%, (CEO) Jorgen Lindegaard told "Reuters."
737-683 (28304), leased to FlyGlobeSpan (FGC).
December 2005: Scandinavian Airlines (SAS) Group agreed to sell its holding in Jetpak Group, a same-day door-to-door delivery service, to Denmark-based Polaris Private Equity for SEK490 million/$61.2 million, resulting in a capital gain of approximately SEK410 million. The transaction is expected to close before year end and is conditional upon approval of the appropriate authorities.
(SAS) Group is selling a 67% stake in its component overhaul and support business to Singapore Technologies Engineering, parent of ST Aerospace, for €80.4 million/$96 million. The (SAS) Group will maintain a 33% share of (SAS) Component. As part of the transaction, (SAS) will release capital from its component inventories (rotable components and spares), lifting the total value of the transaction to €260 million. The (SAS) Group also has a put option on the remaining 33% of the shares to ST Engineering from year three of the transaction.
"This cooperation is a perfect industrial fit . . . [It] enables (SAS) Component to expand as part of a global jet airplane Maintenance Repair & Overhaul (MRO) group and is good for our employees as well as our customers," (SAS) Group President and (CEO) Jorgen Lindegaard said. (SAS) Component employs 1,000 and generated revenue of €105 million in the first half of 2005, with (EBITDA) of €18.6 million.
Coincident with the transaction, (SAS) Component signed a multiyear material supply agreement to provide material support, component (MRO) and logistics support for (SAS) Group's fleet. (SAS) Group and ST Aero also signed a letter of intent for joint cooperation in other areas of (SAS) technical services. Additionally, the companies agreed "in principle" for (SAS) Component to acquire ST Aero's European components and material services operation, Airline Rotables Ltd, at a price to be determined. The transaction is subject to regulatory approval and is expected to close early next year.
"(SAS) Component is an important milestone in the (ST) Engineering Group's investment drive into the European market," President & (CEO), Tan Pheng Hock stated. "We look to be even bigger in Europe in the years to come."
(SAS) Component said Royal Jordanian (RJA) signed a Free2Fly material supply contract covering its two Q400s.
The European Commission (EC) took Austria, Belgium, Luxembourg and Sweden to the European Court of Justice and sent a "reasoned opinion" to Slovakia for failure to comply with legislation on air passenger rights. "We are determined to ensure that the rights of European passengers are dealt with effectively in all the member states," stated (EC) VP for Transport, Jacques Barrot.
The European Union (EU) regulation, which entered into force on February 17, 2004, stipulates that member states must establish an effective system of penalties vis-a-vis airlines that infringe on the provisions regarding additional protection of air passengers. To date, Austria, Belgium, Luxembourg and Sweden have not established rules on the penalties applicable to infringements despite "several" reminders from the (EC). Slovakia has not yet provided the (EC) with the requisite information on the setting of sanctions.
Separately, the (EC) said it sent a reasoned opinion, the last step before a formal complaint is lodged to the Court of Justice, to Greece for failure to respect (EU) legislation on the establishment of a national supervisory authority in the context of the Single European Sky (SES). The European regulation, which entered into force in April 2004, sets up the institutional framework for the (SES). It requires separation between the provision of air navigation services on the one hand and the supervision and regulation of these services on the other. Greece has failed to establish an independent national supervisory authority to assume the tasks identified by the legislation including certification of air navigation service providers and ongoing compliance oversight.
Also, the (EC) confirmed it will take Latvia to the Court of Justice for failing to introduce European legislation on the introduction of noise-related operating restrictions at (EU) airports.
(SAS) Cargo received its Cargo 2000 certification.
737-683 (28305), leased to FlyGlobeSpan (FGC). 3 MD-90-30's (53460; 53461; 53462), to be leased to Hello (HLO), who will wet-lease them to Iceland Express (ICX) through 2008.
January 2006: "Connexion by Boeing" will add four channels of live television to its high-speed in-flight Internet service beginning January 23. The channels are (CNBC)/(MSNBC), BBC World, EuroNews and EuroSportnews. Scandinavian Airlines (SAS) said that beginning on January 23, passengers on (SAS) flights between the USA and Scandinavia (SAS) will be able to view live programs on their laptop computers through (SAS) "Net Access," the carrier's high-speed wireless Internet service provided by Connexion. (SAS) said more than >26,000 of its passengers used the system in 2005 to send and receive e-mail and access the Internet. Connexion also unveiled a new price structure from January 31; 1 hour of access will cost $9.95, 2 hours $14.95, and 3 hours $17.95. Unlimited 24-hour access, including connecting flights, will cost $26.95. Connexion has made Yahoo! the exclusive search engine on its portal.
Swedish Regional City Airline and (SAS) signed a code share agreement including all City flights from Gothenburg. From mid-month, the carrier will end services to Bergen, Milan Malpensa, and Tallinn. (SAS) will launch Stockholm - London City service February 13 operating an 82-seat Avro 70 leased from Transwede. Service will run twice Monday through Friday, with a daily service operating Sunday.
Although the (SAS) Group has succeeded in reducing costs by SEK14 billion/$1.8 billion over the past three years through its "Turnaround 2005" program, the company's namesake airlines, collectively known as Scandinavian Airlines Businesses (SAB), continue to underperform. Furthermore, (SAS) said ongoing contract negotiations with unions are not progressing toward the cost-saving goals it needs, according to a recent edition of the company's internal newsletter. As a result, it is looking at shrinking (SAB) by eliminating unprofitable routes and cutting frequencies, resulting in layoffs and aircraft disposals. (SAS) Sverige (Sweden) laid off -120 employees in December, while a further 150 were given a choice between transfer and redundancy.
(SAB) is carrying out a route-by-route profitability analysis as a prelude to likely service reductions. It expects approximately 15% - 20% of routes will be affected by the evaluation. An announcement may be made within the next few weeks.
Full year 2005 (SAS) Group = Passenger traffic 35.09 Billion (RPK) traffic (+6.8%); 34.93 Million passengers (+8%). Scandinavian Airlines (SAS) = Passenger traffic 30.86 Billion (RPK) (+4%); Freight traffic 633.20 Million (FTK) (-10%); 26.24 Million passengers (+1%).
(SAS) recently has been selling off units it considers noncore. In the past two months it sold 67% of (SAS) Component Group to Singapore Technologies Aerospace and European Aeronautical Group, which provides navigation and flightpath databases and flight- and crew-planning solutions, to Canada's Navtech. Jetpak Group, a same-day door-to-door delivery service, was sold to Denmark-based Polaris Private Equity.
(SAS) was criticized by Sweden's Civil Aviation Authority for failing to carry out mandated inspections on 10 Airbus (EDS) airplanes last year. (CAA) Director General Nils Gunnar Billinger told Swedish daily Svenska Dagbladet that "(SAS) has taken liberties with the safety margins. These airplanes should not have been in traffic," according to "Reuters." In a statement, (SAS) acknowledged it did not follow regulations regarding inspections but noted it discovered the oversight and "immediately [reported] the shortcomings in its internal checks to the authorities." Subsequent inspections revealed no problems with the airplanes. The company said it has "initiated activities to gain control of its maintenance procedures and to ensure that the authorities and passengers continue to have full confidence in (SAS)."
(SAS) achieved what it called the first "four dimensional (4DT) managed revenue flight ever made." The event occurred on Jan 19 and involved a 737 from Lulea to Stockholm Arlanda. It also marked the first Advanced Continuous Descent Approach into Arlanda. During the flight, the approach controller and tactical supervisor at Arlanda used data link to set up the approach procedure, enabling the 737 "to calculate its optimum trajectory." The ground also assigned a Required Time of Arrival (RTA) for the runway threshold. After pilots (FC) entered the (ATC) data into the (FMS), the airplane (4DT) trajectory was downlinked to the ground, including precise altitudes and times at all waypoints ahead to touchdown. The airplane met the previously given (RTA) within 2 seconds.
(SAS) said it was forced to cancel hundreds of domestic and European flights from Copenhagen and Norway due to a strike by its Denmark-based pilots (FC) and a sickout by pilots (FC) at its (SAS) Braathens (BRT) subsidiary. An announcement on Copenhagen Airport's website said "most flights" were called off and that passengers holding tickets for all but the "few flights" unaffected by the work stoppage were "advised not to come to the airport."
(SAS) said on its website that the Copenhagen pilots (FC) were "in breach of their collective agreement" and that it "will do its utmost to quickly solve the problem." At least 150 pilots (FC) suddenly went on strike in Copenhagen (CPH), according to media reports, following a weekend during which bad weather disrupted service in the region. The pilots (FC) reportedly are upset about (SAS) Group's intention to transfer their employment to its new national subsidiaries, including Scandinavian Airlines Denmark. "(SAS) has called the pilots (FC) to negotiations about them being hired by their respective subsidiaries," a spokesperson told "Reuters."
In Norway, Oslo Airport said flights were affected "due to illness amongst the (SAS) Braathens (BRT) pilots." A Braathens (BRT) spokesperson said between 30 and 40 pilots (FC) called in sick, according to the "Associated Press (AP)," but the carrier was unsure if the action was connected to the (CPH) strike.
(SAS) announced on its website the conclusion of the pilots (FC) strike and sickout that had grounded hundreds of flights in Copenhagen and at its Braathens (BRT) division in Norway. The pilots (FC), who were protesting potential labor issues connected to (SAS) Group's split into national airline divisions, were expected back at work this morning. (SAS) estimated the strike cost it approximately DKK30 million/$4.9 million per day, according to media reports.
(SAS) began returning to normal operations following several days of strikes. An (SAS) spokesperson said that the airline cancelled 500 flights between Monday and Wednesday when 200 pilots (FC) from (SAS) Denmark staged a strike and 80 pilots (FC) from (SAS) Braathens (BRT) in Norway called in sick. Although the Norway group remained sick on Thursday, (SAS) was operating most of its schedule; through mid-afternoon it had cancelled 26 flights in Denmark and 47 in Norway. Both pilot (FC) groups are protesting (SAS) Group's proposal to shift pilots (FC)'s labor contracts from the (SAS) Group to the individual airline units, which also include (SAS) Sweden, (SAS) International, and (SAS) Cargo.
The (SAS) Group said it "completely rejects" the Swedish Ministry of Finance's proposal to place an environmental tax on air travel. According to (SAS), the proposal suffers from "inadequate analysis" of the tax's effects, "an unclear legal basis for the tax, and an obvious risk of distortion in the competition between various modes of transport." In a petition to the ministry, (SAS) also said there "are obstacles to Sweden instituting taxation of operations conducted by non-Swedish companies." And the tax likely violates international conventions to which Sweden is a signatory, it added.
(SAS) Ground Services Norway opened Europe's first infrared deicing hangar at Oslo Airport earlier this month. The hangar will work as a supplement to ordinary deicing for the remainder of the winter season, (SAS) said.
February 2006: (SAS) Group returned to profit in 2005 after four years of red ink, reporting net income of +SEK255 million/+$32.9 million compared to a -SEK1.77 billion loss in 2004. The group was profitable on an operating basis for the first time since 2002. (CEO), Jorgen Lindegaard attributed the positive results to "the biggest change in the group's history, Turnaround 2005," which has led to savings of -SEK14 billion since 2002.
However, he noted that the Scandinavian Airlines (SAS) Businesses "remain unprofitable" despite slashing unit costs by more than -30% in the past three years. New cost-cutting measures amounting to -SEK2 billion are being implemented.
Full-year revenues rose +6.5% to SEK61.89 billion and operating expenses (before income from asset sales) grew +3.6% to SEK61.32 billion. Operating income after asset sales and results of affiliated companies totaled +SEK1.37 billion, reversing an operating loss of -SEK792 million in 2004.
For the fourth quarter ended December 31, (SAS) had net income of +SEK198 million against a loss of -SEK627 million in 2004. Operating revenues rose +8% to SEK16.29 billion. Operating profit was +SEK670 million versus a loss of -SEK119 million in the year-earlier quarter. Most of the current-period income was attributable to gains from the sale of European Aeronautical Group, Jetpak and 67% of (SAS) Component. Income before capital gains and nonrecurring items was +SEK228 million compared to a loss of -SEK320 million in 2004.
Turning to the business units, Scandinavian Airlines (SAS) Businesses posted positive annual (EBIT) of +SEK610 million and trimmed its pre-tax loss to -SEK48 million. This was much improved over an operating loss of -SEK763 million and a pre-tax loss of -SEK1.46 billion in 2004.
Spanair (SPP) had a small pre-tax profit of +SEK47 million, reversing a loss of -SEK52 million in 2004. Wideroe's annual pre-tax profit dipped to +SEK77 million in 2005 from +SEK84 million a year earlier and Blue1 earned +SEK62 million versus a pre-tax loss of -SEK 111 million. Airline Support Businesses, comprising (SAS) Ground Services, (SAS) Technical Services and (SAS) Cargo Group, had pre-tax income of +SEK287 million, down -43.4% compared to 2004.
Commenting on the outlook for 2006, Lindegaard said the market remains "uncertain" owing to "intense competition and high fuel costs." (SAS) enters the year in a stronger position, but "creating a competitive cost base for and profitability for Scandinavian Airlines (SAS). (SAS) Group's Spanair (SPP) subsidiary is adding +30 weekly flights between Spanish tourist destinations Malaga, Alicante and Palma Majorca, and Scandinavian markets Copenhagen and Stockholm. All flights will be aboard one-class MD-80s. Individual city-pairs will be serviced 2 - 4x-weekly. Destinations also are available via Barcelona or Madrid.
(SAS) Group overruled objections by its pilots (FC) unions in Sweden and Denmark and announced it is implementing "the operational transfer" of the pilots (FC) into the individual airline units in each country effective March 1. Concurrently, (SAS) is transferring the negotiating mandate for the pilots (FC)'s collective bargaining agreements from the (SAS) Consortium to (SAS) Scandinavian Airlines Danmark (Denmark), (SAS) Braathens (BRT) (Norway), Scandinavian Airlines (SAS) Sverige (Sweden) and Scandinavian Airlines (SAS) International. "The reason for incorporation is that each airline must be in a position to assume full responsibility for organizing, managing and assigning work for all of its employee groups," (SAS) said.
The pilot unions claim (SAS) does not have the authority to make such a decision unilaterally, but in a statement, (SAS) said it "evaluated the objections . . . and found that there were no legal barriers" to the action.
Last month, pilots (FC) in Denmark and Norway staged job actions in protest over (SAS)'s plans to transfer their contracts to the individual airlines, resulting in 500 flight cancellations over three days at a cost to (SAS) of DKK30 million/$4.9 million per day, according to media reports.
Star Alliance (SAL) member carriers at Paris (CDG) Terminal 1 have begun moving into new check-in Hall 4, the (SAL) alliance announced last week. Thai Airways (TII) and bmi (BMA) already are using the new Star (SAL) Alliance facilities and Adria Airways (ADR), All Nippon Airways (ANA), Croatia Airlines (CRH), (LOT) Polish Airlines, Lufthansa (DLH) and (SAS) Scandinavian Airlines will relocate by the end of the month. There are 24 check-in desks currently available. Singapore Airlines (SIA), United Airlines (UAL), US Airways (AMW)/(USA) and Varig (VAR) will start making use of the new facilities in 2008 once additional areas of the terminal are refurbished. Star (SAL) Alliance-branded self-service check-in units will become available in March to customers of select alliance carriers.
(SAS) Ground Services signed a three-year agreement with Lufthansa (DLH) covering operations at Copenhagen, Oslo, Bergen, Stavanger, Stockholm, and Gothenburg. (DLH) is (SAS) Ground Services' biggest customer outside (SAS) Group carriers.
March 2006: The (SAS) Group extended its communications agreement with Telenor until 2010. The SEK350 million/$43.9 million deal calls for the supply of all fixed and mobile telephone services to (SAS) in Sweden, Denmark and Norway.
(SAS) Cargo said it had its best-ever result last year as it reported a pre-tax profit of +SEK68 million/+$8.6 million), up from +SEK14 million in 2004, on revenues of SEK3.3 billion, up +17%. (EBIT) jumped to SEK83 million from SEK35 million. Improvement was achieved in spite of a -5.4% decline in yield.
(SAS) said it finalized a full-content agreement with Worldspan under which the airline will provide the (GDS) "with all fares, schedules and availability including published low fare classes and Web fares that are available through (SAS)'s own reservations and ticket agents as well as (SAS) Group websites."
(SAS) will code share with Swiss International Air Lines (CSR) on its Bangkok - Singapore service.
(SAS) Group said it completed the sale of 67% of (SAS) Component to Singapore Technologies Engineering, parent of ST Aerospace. The transaction will "release capital from its component inventories," so (SAS) put the total value at SEK2.5 billion/$311 million including the purchase price of SEK760 million, "while the positive effect on cash and net debt is SEK2 billion." As part of the agreement, (SAS) signed a multiyear material supply deal with (SAS) Component to provide material support, component repair and overhaul and logistics support of the (SAS) fleet.
April 2006: 2 MD-87s (49610, LN-RMK (EC-JRR); 49612, LN-RMH (EC-JSU)) wet-leased to Spanair (SPP).
May 2006: 2 MD-87s (49609, OY-KHF; 53348, OY-KHW (EC-JTK)), wet-leased to Spanair (SPP).
August 2006: 60th anniversary!
A319-131 (2850, OY-KBO), delivery in 60th anniversary "retro" markings - see photo.
January 2007: In 2006, (SAS) had 30.9 billion (RPK)s (world 19th highest); 605.93 million (FTK)s freight (-4%); & 18.02 million passengers (+1%).
(SAS) Ground Services UK established a ground handling organization at Aberdeen Airport that will include passenger handling, ramp services and deicing operations. The company said it expects to secure third-party customers by spring.
Icelandair (ICE) chose (SAS) Ground Services for handling at Oslo, Bergen, Stockholm Arlanda, and Gothenburg.
February 2007: A sharp improvement in earnings toward the end of the year, boosted mainly by the November sale of its 65% holding in the Rezidor Hotel Group, drove (SAS) Group's full-year 2006 net profit to +SEK4.74 billion/+$676 million, significantly widened from net income of +SEK255 million the prior year.
But the profit was a far more modest +SEK164 million, excluding the hotel chain sale, although still a turnaround from a net loss of -SEK322 million in 2005, excluding income from discontinued operations, which primarily constituted Rezidor. Fourth-quarter net income excluding the sale, was +SEK230 million, improved over a net loss of -SEK353 million in the year-ago quarter excluding discontinued operations.
New President & (CEO), Mats Jansson, who started in the position January 1st, called the 2006 results a "good sign," but conceded that the profit was "too low to meet the shareholders' return requirements and future investment needs." He added that "about SEK3 billion" more income from continuing operations is necessary to achieve "satisfactory" profitability.
Full-year revenue was up +9.5% to SEK60.78 billion and operating income nearly doubled to +SEK1.27 billion from +SEK677 million in 2005. Group traffic grew +5.4% to 38.44 billion (RPK)s on a +1.9% lift in capacity to 53.77 billion (ASK)s, producing a load factor of 71.5% LF, up +2.4 points.
(SAS) reported full-year (EBIT) of SEK1.9 billion, more than double the SEK617 million in 2005, on a +4.8% rise in revenue to SEK38.63 billion.
Jansson said that the airline group's "frequent travelers" will receive enhanced service, including more electronic check-in options and "fast track" security clearance at a greater number of airports. "It should be worthwhile to be a loyal (SAS) customer," he said. Also, (SAS) said it will launch 3x-weekly, Stockholm - Bangkok service aboard an A340, at the end of October.
Jansson projected "continued favorable growth" this year, but said "a combination of cost and revenue measures" is needed to "to fill the [SEK3 billion] gap" in earnings.
(SAS) Scandinavian Airlines will return to Greenland after five years, launching a 2x-weekly Copenhagen - Kangerlussuaq service in May aboard A319s, increasing to 3x-weekly in June.
(STAR) Capital Partners, an independent investment fund manager based in London, said it has reached agreements to acquire a majority stake in General Electric Commercial Aviation (GEF) Training, and to purchase the entire share capital of (SAS) Flight Academy, and plans to combine the businesses in a deal valued at more than >$275 million.
(SAS) said the sale of (SAS) Flight Academy has a "transaction value and positive effect on net debt" of +SEK750 million/+$106.8 million, while the capital gain will be approximately +SEK380 million.
The transactions are expected to be completed "in the next few weeks," (STAR) said. (GE) Commercial Aviation Services (GEF) will retain an equity stake of just under <20% in the combined company and has signed a marketing alliance agreement "to assist in future development plans" of the merged business. (GEF) (COO), Brian Simpson was named (CEO) of the new entity and "will be supported by" (SAS) Flight Academy (CEO), Olof Barve in a to-be-named executive role.
The Star (SAL) alliance said the pro forma combined revenue of the new company would have been $110 million for 2006. "The expected shortfall of qualified pilots (FC), combined with a continued drive by airlines to focus on their core businesses, by outsourcing key support services, makes established, well run pilot (FC) training operations like (GEF) and Flight Academy all the more critical going forward," (STAR) Investment Director, Paul Gough said.
(GEF) noted that the combined business "now becomes one of the leading independent flight training operators globally and the largest such entity in Europe." (SAS) said the sale, which follows the November divestment of its 65% holding in the Rezidor Hotel Group, is another move aimed at focusing "on core business."
Continental Airlines (CAL) became the eighth carrier to have its cargo booking system go live on the Unisys-operated Cargo Portal Services (CPS), a Web-based booking tool used by more than >2,500 freight forwarders. "Our customers want choice and convenience. (CPS) fills this need because of its rapid adoption by forwarders, its multicarrier model and its capability to handle virtually all types of cargo products," (CAL) VP Cargo, Jack Boisen said. (CAL) joins American Airlines (AAL), Air Canada (ACN), Air France (AFA)/(KLM), Austrian Airlines (AUL), Northwest Airlines (NWA), Scandinavian Airlines (SAS), and United Airlines (UAL) on (CPS).
March 2007: Icelandair (ICE) chose (SAS) Ground Services as its new provider at Paris Charles de Gaulle (CDG).
(SAS) is offering passengers the opportunity "to offset carbon dioxide emissions from air travel by paying [voluntary] compensation" via its website. Compensation fees are not set, but the airline noted that a typical Scandinavia to Europe roundtrip would cost €4.50 /$5.93 for the passenger to offset his share of emissions generated.
April 2007: Starts Stockholm - Keflavik, - Malaga, using 737-800s.
(SAS) Scandinavian Airlines and Croatia Airlines (CRH) entered into a code share partnership on (SAS) routes from Oslo Gardermoen, Stockholm Arlanda and Copenhagen to Frankfurt, Munich, Vienna, Amsterdam and Zurich, and connecting flights on Croatia (CRH)'s services to Zagreb and Split. Croatia (CRH) is a Star (SAL) Alliance regional member.
(SAS) International said long-haul operations from Copenhagen were returning to normal following a recent three-day wildcat strike by local cabin crew (CA). It cancelled 28 flights on its last day.
(SAS) announced that SAS Braathens (BRT) will be renamed "SAS Norge" on June 1, bringing it into line with SAS "Sverige," and SAS "Danmark." "The time is right for changing our name and identity, now when the operational integration is completed," Braathens (BRT) Chairman, John Dueholm said.
(SAS) announced the launch of SAS.mobi, a version of its website available on mobile phones, that offers check-in, flight status, timetables, loyalty program access and other features. The site was created by Adimo of Sweden.
(SAS) Sweden said its summer expansion from Stockholm Arlanda, from which it has launched 11 new routes, had a successful start. European Route Manager, Niklas Hardange said that the airline expects 2007 passenger numbers to climb +8.3% thanks to the new services. (SAS) Sweden operates four 737-800s, 16 737-600s, 15 MD-80s and seven Dash 8s, along with one Avro RJ leased from Transwede for its London City operation. It is looking to add two more airplanes and is exploring up to four new leisure destinations. The carrier, along with SAS Braathens (BRT), is adding eight seats to its 737-600s, bringing capacity on each airplanes to 120.
May 2007: (SAS) reportedly is taking action following a recent three-day wildcat strike by cabin crew (CA), downgrading its Copenhagen operation and using Swedish and Norwegian crews to handle intra-Scandinavian flights, according to press reports. Danish employees may be fired and jobs added in Oslo and Stockholm "because staff there show more commitment to their jobs," CEO, Mats Jannson was quoted as saying. Several newspapers reported that approximately 700 flights were cancelled because of the strike, which will cost the company up to -€11 million/-$14.9 million.
(SAS) will unveil a new long-term plan next month called "Strategy 2011" that will outline its future fleet and efficiency goals. (CEO), Mats Jansson, who took the helm January 1, said in Copenhagen that the plan will focus on "cutting costs further, planning growth for the future and improving the structure of our nine (SAS) airlines." It will target -€2.7 billion/-$3.66 billion in cost savings within five years, according to press reports. But an improved cost structure could be undermined by labor unions, Jansson warned. (SAS) Group has 39 unions. He insisted he will not accept further "wildcat" strikes such as a three-day action at the end of April by (SAS) Denmark flight crews in Copenhagen, that forced 700 cancellations and resulted in an estimated €12 million in lost revenue. "In the last 10 years, (SAS) in Copenhagen (CPH) has had 73 wildcat strikes," he said. "I and my board decided that this is unacceptable for our passengers and for us. One reaction could be to fire some people" from (SAS) Denmark.
Another measure taken in response to the strikes is "to switch 15% of the (SAS) turnover from (SAS) Denmark to the hubs in Stockholm and Oslo," Jansson said. "We will cut -8 to -10 daily flights each from (CPH) to Stockholm [Arlanda] and to Oslo [Gardermoen]." He said the capacity transfer will occur in the next 3 to 6 months. "We are doing this because these are not fine people [at (SAS) Denmark] and we will strengthen Stockholm and Oslo, where people work more efficiently." That may change soon, however. The Swedish Salaried Employees' Union/Scandinavian Cabin Crew Assn, which represents (SAS) Sverige cabin crew (CA), announced it would take "industrial action" the morning of May 25. (SAS) flights to the USA and Asia will be unaffected. As mediation began yesterday, the Air Transport Industry Employers' Association/Scandinavian Airlines (SAS) Sverige responded by announcing its intention to lock out SEU cabin crew beginning May 28. (SAS) Sverige (CEO), Anders Ehrling said the company offered a three-year deal "on a level with the rest of the market" but the union sent a counteroffer that would lift annual costs by more than >25%. "The lockout indicates how seriously we view this situation. We expect that it will expedite a swift resolution to the conflict," he said.
Singapore Technologies Aerospace's (SAS) Component subsidiary was selected by Martinair (MTH) to continue its support of the airline's six 767s under its material supply program for another three years in a deal valued at €18 million/$24.3 million.
(SAS) Sverige said the Swedish Salaried Employees' Union (SEU)/Scandinavian Cabin Crew Association (CA) rejected a mediator's final bid, leaving open the employees' threat of work action. "We are open to solutions that involve changes in employment conditions and/or salary levels," (SAS) Sverige (CEO), Anders Ehrling said. "However, this requires that we keep within the framework of 10.2% that the [SEU] itself defined for this year's collective bargaining."
(SAS) Sverige announced the cancellation of flights to, from and within Sweden, Saturday owing to a cabin staff strike launched recently. (CEO), Anders Ehrling said that the "consequence" of the Salaried Employees' Union's demands "will be that the union will govern the company's operations" and that "the future of [SAS Sverige] and the (SAS) Group is on the line, and accordingly, so is the future of perhaps 3,000 of the [SEU] members."
(SAS) Sverige planned to operate its full schedule again after the Swedish Salaried Employees Union, which represents approximately 800 (SAS) cabin staff (CA), reached a labor agreement with the airline. The deal will apply March 1, 2007 to April 30, 2010, and "is in line with the level applicable in the Swedish labor market, that is, +10.3% over 38 months," (SAS) said. The airline revealed that the four-day strike resulted in 1,200 cancelled flights affecting 90,000 passengers and has said the cancellations cost -SEK10 to -SEK20 million/-$1.5 to -$2.9 million per day. The work action followed a three-day wildcat strike by Danish cabin crew (CA) late last month.
The (SAS) Group sold its remaining 6.7% stake in Rezidor Hotel Group to Carlson Hotels Worldwide of the USA for SEK584 million/$85.2 million.
June 2007: (SAS) Group unveiled a new mid-to-long-term strategy that will focus on raising annual pre-tax profit to +SEK4 billion/+$566 million and boosting passenger traffic by +20% by 2011 through divestment of noncore assets, and a renewed focus on "flying to, from and within Northern Europe."
(CEO), Mats Jansson said the group will sell Spanair (SPP) and its stakes in bmi (BMA) and Air Greenland (GRL), with proceeds going toward "future capital expenditure and development." It hopes to cut costs by -SEK2.8 billion by 2011 and establish a "new cooperation model with the unions," which have created significant headaches recently at (SAS) Danmark and (SAS) Sverige. "We have to abandon the strike culture that has long existed at (SAS)," Jansson said, adding that the company is committed to "involv[ing] employees in the value that is created through profit sharing and part ownership."
This fall, the group will evaluate the future of other operations, such as (SAS) Ground Services and (SAS) Technical Services, to determine whether they will be maintained or spun off. It previously sold (SAS) Flight Academy and (SAS) Component, as well as its stake in Rezidor hotels.
Reports out of Spain indicated that tour operator Marsans is planning to launch a full bid for Spanair (SPP), with Cinco Dias citing comments by Marsans owner Gonzalo Pascual, who said the acquisition would fit with plans to expand subsidiary Air Comet (APZ)'s alliance with Aerolineas Argentinas (ARG).
(SAS) announced the resignation of Executive VP, Gunnar Reitan effective August 15. He heads the Individually Branded Airlines (IBA) segment and has been with the company since 1988. He was acting CEO in August to December 2006. Jansson will take over Reitan's (IBA) responsibilities.
Later, Spanair (SPP) confirmed that Spanish tour operator, Marsans had made a full bid for the airline. Outgoing (SAS) Executive VP, Gunnar Reitan told reporters that Marsans' offer was "not exclusive" but that no other bids have been received. Marsans head, Gonzalo Pascual said his company was bidding on its own, according to "(AFX) News," adding that Spanair (SPP) will not merge with either Air Comet (APZ) or Aerolineas Argentinas (ARG).
Grupo Marsans President, Gonzalo Pascual confirmed that his company is talking with the (SAS) Group about the possible acquisition of Spanair (SPP). "It could be a good combination," Pascual said at the Paris Air Show. "Most of our activity is long-haul - - Europe to South America - - or within Latin America, whereas Spanair (SPP) flies to domestic, European and North African destinations." Marsans, which reports annual revenue of about €4.5 billion/$6.02 billion, presently operates some 90 airplanes. Spanair (SPP) has 65. Pascual created the Spanish carrier and until recently kept a 5.1% stake.
"We sold it off when (SAS) informed us of their plans to concentrate on the Nordic market," he conceded, noting this would lead to "clearer" negotiations on both sides. "I only believe in free market principles. I believe we have a good chance" to acquire Spanair (SPP), he said. "Of course, the economic terms have to be right."
Air-Berlin (BER) released a statement denying rumors that it also is considering a bid. "We have no interest in Spanair (SPP). There are no discussions about an investment or takeover," said (BER) (CFO), Ulf Huttmeyer.
Spanair (SPP) operates 62 airplanes comprising 38 MD-80s, 22 A320s/A321s and three F 100s. A 39th MD-80 is parked.
Meanwhile, speculation continued over the fate of (SAS)'s 20% holding in bmi (BMA), which it also intends to sell. An (SAS) spokesperson confirmed to "Reuters" that the company discussed the situation with Lufthansa (DLH), which holds 30% minus one share of the UK carrier. "It is natural that we together with Lufthansa (DLH) talk about bmi's future. But it would be going too far to say that we are having discussions on Lufthansa (DLH) in particular buying our stake in bmi (BMA)," the spokesperson said. Bmi (BMA) has not issued a comment, while (DLH) denied rumors in the German press that it will buy either Spanair (SPP) or the bmi (BMA) stake.
Later, (SAS) Group said it acquired the remaining 5.1% of Spanair (SPP) from minority shareholder Teinver in preparation for divestment.
In an addendum to the four-year strategic plan, (SAS) unveiled its new management structure. President & (CEO), Mats Jansson will assume chairmanship of the companies within the Individually Branded Airlines (IBA) division; Scandinavian Airlines (SAS) & (STS) Head, John Dueholm was appointed deputy (CEO); (CFO), Gunilla Berg was appointed executive VP; Benny Zakrisson, who was responsible for (SAS) Group's "Structure & Strategy issues," was named Chairman of (SGS) and (SAS) Cargo; Svein Oppegaard is Executive VP Corporate Human Resources (HR), and Hans Ollongren is acting Senior VP Corporate Communications & Public Affairs. Several other positions will be filled, (SAS) said.
(SAS) announced the completion of installation of its new Business (C) Sleeper seats on A330-300s and A340-300s, operating between Newark, Chicago O'Hare, Seattle and Washington Dulles, and its Copenhagen and Stockholm Arlanda hubs. The business cabin (C) has a 2-2-2 configuration, with 46 seats on the A340 and 34 on the A330. New seats feature 61 inches of legroom and a video screen nearly +25% larger than on (SAS)'s previous seats. Transatlantic services also feature Economy Extra (Y) seating (35 seats on the A330 and 28 on the A340) with 38-inches pitch, In-Flight Entertainment (IFE) screens and power outlets.
July 2007: (SAS) Group appointed Telecommunications Executive, Henriette Fenger Ellekrog as Executive VP Human Resources (HR), effective October 1.
(SAS) Scandinavian Airlines officially introduced its new flexible fare structure allowing business (C), Economy Extra and economy passengers (Y) to purchase Fully Flexible, Flexible and Fixed fares for any class on any segment. All fares are available to book immediately save Fixed Economy Extra, which will be ready by year end. "The new fixed fares allow customers to purchase business or Economy Extra class at a competitive price, if they book well in advance," (SAS) International (CCO), Lars Sandahl Sorensen said. "They can also mix classes to suit their budgets and schedules. Business (C) travelers, for instance, can fly one way on a Fixed Business (C) fare and return on a Fully Flexible Business (C) fare, or fly Economy (Y) Extra one way and Business (C) the other."
737-783 (32276, LN-RRB), delivery.
August 2007: Looking forward, (SAS) said that there are "no clear indications of a slowdown in the economy or the airline market," but warned of uncertainty "regarding the strength of growth, the future competitive situation and the trend for jet fuel prices." It projected "favorable passenger growth" in most of its markets, but said "competition is expected to remain intense."
(SAS) Group President & (CEO), Mats Jansson said four local trade unions, in addition to the heads of the unions organizing employees at (SAS) Ground Services and (SAS) Technical Service in Denmark, have promised to "work for a total no-strike situation" in a letter he called "a breakthrough toward a new cooperation model between (SAS) and our trade union organizations in Denmark." (SAS) said that as a result of the commitment, "the conditions and the realities have changed" regarding its decision to operate flights between Copenhagen and Stockholm and Oslo with only Swedish and Norwegian crews. It said the schedule among the capitals now will involve "a relatively balanced distribution of production (airplanes and crews) from (SAS) Sweden, Norway and Denmark."
The four unions - - (CAU), (DPF), (LFF) and (LH) - - said they were satisfied "that a clear vision for the business has now been presented" and that a "no-strike situation" would be targeted following the signing of several labor agreements this year. Jansson said a "new cooperation model" was a "prerequisite" for implementation of the company's "Strategy 2011" plan. He said in May that (SAS) has suffered 73 wildcat strikes in Copenhagen in the past 10 years.
(SAS) Group named Norwegian Public Relations executive, Claus Sonberg, Executive VP Corporate Communications & Investor Relations. He will replace Hans Ollongren, who will become an advisor to President & (CEO), Mats Jansson.
A319-132 (3231, OY-KBR), delivery.
September 2007: Scandinavian Airlines (SAS) appointed Bjorn Alegren President of its (SAS) Ground Services subsidiary, and Patrik Knutsson VP Corporate Purchasing & Chief Purchasing Officer. Alegren has held a number of senior positions at (SAS), including since 2005 the purchasing role taken on by Knutsson, who joins (SAS) from (IBX). Alegren succeeds Hans-Otto Halvorsen, who is leaving the company "following a decision made mutually with Group management."
INCDT: Bombardier (BMB) said a preliminary investigation revealed some corrosion on a part of the landing gear that failed on an (SAS) Dash 8-Q400 earlier this week. A spokesperson said that the corrosion was evident on the landing gear actuator, which extends and retracts the gear during landing and takeoff. The Canadian manufacturer recommended that all Dash 8-Q400s be grounded after landing gears collapsed on two separate (SAS) flights on September 9 and September 12. "The airplanes touched down on the left main landing gear, followed by the right main landing gear, and shortly thereafter the right main landing gear collapsed," according to a statement from (SAS). Prior to landing, a "red light indicated that the right main landing gear was not locked and a go-around was initiated."
Transport Canada issued an Airworthiness Directive (AD) calling for all DASH 8-Q400 operators to conduct visual safety inspections of left and right main landing gear systems, and main gear retract actuators that have accumulated 8,000 or more landings, or have been in service for more than >four years. Bombardier sent two separate air safety teams to investigate the (SAS) incidents, that occurred in Aalborg and Vilnius.
Later, Bombardier (BMB) recommended that Dash 8-Q400s with more than >10,000 cycles be grounded. The gear is manufactured by Goodrich (BFG), which joined Bombardier (BMB) in calling for the grounding "until an inspection of the landing gear is carried out." Of the 160 Dash 8-Q400s Bombardier has delivered, some 60 have more than >10,000 landing gear cycles, according to the Canadian manufacturer.
The first incident occurred September 9, when the right main gear collapsed on a flight into Aalborg. Five passengers were injured as the propeller cut into the cabin. Later, on a flight from Copenhagen to Palanga in Lithuania, an (SAS) crew reported technical difficulties and diverted to Vilnius. Shortly after touchdown, the right main gear collapsed. There were no reported injuries.
Following the latest incident, (SAS) and Wideroe elected to ground their entire Dash 8-Q400 fleets, regardless of cycles, until inspections are completed, while other operators of the popular turboprop began canceling flights or voluntarily grounding fleets to carry out the needed gear inspections.
Austrian Airlines (AUL) regional subsidiary Austrian Arrows temporarily removed its 10 Dash 8-Q400s from operation, and said it would "strictly comply" with the results of Bombardier's examination of the airplanes. (AUL) said it would operate as many flights as possible with other airplane types.
Flybe (BEE), which operates 74 Dash 8-Q400s, said that only six airplanes were affected. After inspecting the planes, the carrier said it was "back on track with only minimal delays."
Horizon Airlines (ASA), the North American launch customer for the aircraft, grounded 19 of its 33 Dash 8-Q400s. "We made the decision to ground them before Bombardier made the recommendation to ground them," a Horizon spokesperson said. The airline immediately began accommodating passengers on flights operated by sister carrier Alaska Airlines (ASA), rebooked others or offered full refunds, the spokesperson said.
Frontier Airlines (FRO) has taken delivery of two Dash 8-Q400s for its startup subsidiary Lynx Aviation, but said it is not affected, because the airplanes are new. It expects to take delivery of 10 by January.
Last month, the USA (FAA) ordered Bombardier to correct potential flap failures on 684 CRJ-100s/200s. In March, (ANA) briefly grounded its fleet of Dash 8-Q400s after a nose gear failed to lower, forcing the pilot (FC) to land with the gear retracted at Kochi Airport.
Later, airlines continued to inspect Dash 8-Q400 airplanes, that were grounded after two separate incidents in which landing gear collapsed on (SAS) flights. Bombardier (BMB) sent out detailed inspection guidelines to Dash 8-Q400 operators. Developed with Goodrich (BFG), the manufacturer of the landing gear, the procedures spell out how to inspect, repair or replace the retract actuator, which showed signs of corrosion during preliminary investigation of one of the (SAS) accidents. "All procedures require a thorough application of corrosion-inhibiting compound," Bombardier (BMB) said.
(SAS) said it was canceling at least 228 flights because of the grounding. (SAS) Sweden canceled 48 flights, while (SAS) Denmark planned to cancel 180. (SAS) officials have estimated the grounding will cost as much as $2.25 million daily, while airplanes are inspected and repaired.
(SAS) is under investigation by a Swedish prosecutor to determine whether passengers were placed at risk by the carrier, the "Associated Press (AP)" reported. (SAS) said it would cooperate with the investigation but called the prosecutor's assertion that it had endangered passengers "groundless." There were no serious injuries in either incident. (SAS) has been inspecting and replacing the landing gear on its fleet of 27 Dash 8-Q400s.
After the fleet inspections, landing gear corrosion was found on 25 of 27 (SAS) Dash 8-Q400 airplanes, according to Danish magazine "Ingenioeren," which reported that technical examinations revealed corrosion problems, that could have contributed to the recent landing gear collapses, that led to a worldwide grounding of the turboprops. "We examined all of the planes and 25 of them had corroded bolts in the landing gear," Helge Torp, Scandinavian airline inspection agency, Skandinavisk Tilsynskontor technical director, told "Ingenioeren." (SAS) said is in the process of replacing landing gear parts on all its Dash 8-Q400s. Bombardier (BMB) previously sent out detailed inspection guidelines to Dash 8-Q400 operators.
(SAS) said the grounding cost it SEK10 to SEK15 million/$1.5 to $2.3 million daily. It has cancelled hundreds of flights since September 12, when the grounding went into effect.
The Danish Civil Aviation Administration currently holds the rotating chairmanship of Scandinavian aviation authorities, and has placed a flight ban all (SAS) Dash 8-Q400s. It said the ban will be lifted on an airplane-by-airplane basis, as each is inspected to ensure they are safe to operate.
SR Technics (SWS)/(TEL) will provide nose-to-tail, "C" checks and a modification program on Scandinavian Airlines (SAS)'s fleet of four A330s and seven A340s. The program will run from October 2007 through March 2008, with work carried out at SR Technics (SWS)/(TEL) facilities at Dublin Airport.
October 2007: (SAS) said the grounding of its fleet of 27 Dash 8-Q400s was lifted on October 4, when its first airplane of the type returned to service, with the remaining Dash 8-Q400s returning to operations during the following days. The airline said there were further flight cancellations, as it gradually brought the fleet back into service. It was forced to ground the airplanes following the collapse of landing gear on two separate flights last month, and subsequent discovery of landing gear corrosion on 25 of its 27 Dash 8-Q400s. "The airplanes are undergoing a number of extra inspections that (SAS) has chosen to perform, in addition to the replacements and inspections prescribed by the authorities and manufacturer," (SAS) said. "The first airplanes are ready for test flights, that will take place in the next few days."
(SAS) said it will initiate discussions with Bombardier regarding compensation of approximately SEK500 million/$76.7 million for the costs and lost income incurred due to the three-week grounding of its Dash 8-Q400s, according to German news agency "DPA." (CEO), Mats Jansson reportedly said in Copenhagen that the company's two Dash 8-Q400 accidents cost a combined SEK200 million, with the hundreds of resulting cancellations accounting for the remaining SEK300 million. Last week, it estimated that the grounding cost SEK10 to SEK15 million per day. Following landing gear actuator replacements and inspections, (SAS) will re-launch Dash 8-Q400 operations with five airplanes in Denmark, and three in Sweden. Test flights of remaining planes are continuing, and all should return to service by October 15, the company said.
Later, following three incidents involving faulty landing gear on Dash 8-Q400 airplanes, the (SAS) Group decided to remove its 27 turboprops from service permanently, owing to safety issues as well as concerns about its image and financial health. The latest incident occurred October 27, when the right main landing gear failed to extend fully on a flight into Copenhagen. No injuries were reported among the 40 passengers and four crewmembers (FC/CA) on board. Dash 8-Q400s accounted for approximately 5% of (SAS)'s total seat capacity. The company returned the fleet to service on October 4 following a brief grounding and subsequent maintenance checks. "Confidence in the Dash 8-Q400 has diminished considerably, and our customers are becoming increasingly doubtful about flying in this type of airplane. Accordingly, with the Board of Directors' approval, I have decided to immediately remove Dash 8-Q400 airplanes from service," (SAS) Group, President & (CEO), Mats Jansson said.
(SAS) is in discussions with Bombardier (BMB) regarding possible solutions. It reportedly is considering both standard and (ACMI) wet-leases until it can begin implementing a long-term solution in the second half of next year. It canceled 72 flights. Sweden's Dagens Industri reported that the (SAS) Group estimated a negative impact on full-year revenue of -SEK300 to -SEK400 million/-($47 to -$62.7 million, as a result of the Dash 8-Q400s' removal.
None of the other 21 Dash 8-Q400 operators worldwide have reported problems similar to those at (SAS), a Bombardier (BMB) spokesperson said. As for (SAS)'s decision to remove the airplanes from service, (BMB) said it was "disappointed." It said that the latest incident appeared unrelated to the previous two. It said it informed other operators about Saturday's incident, but did not recommend changes to normal flight operations.
(EASA) said it would decide if further emergency Airworthiness Directives (AD)s on the Dash 8-Q400 are in order, adding, "The possible cause or causes of this accident are still unknown at the present time."
Later, the Danish Investigation Board concluded in a preliminary report that the most recent (SAS) Dash 8-Q400 landing gear malfunction, which caused the airline to pull the turboprops permanently from its fleet, was caused by an O-ring that became lodged in the right main gear's actuator, the mechanism that lowers and extends the gear. Investigators determined that this was a different cause than (SAS)'s two previous Dash 8-Q400 incidents, during which landing gears collapsed as the airplanes touched down. They conducted a detailed inspection of the actuator and discovered that a valve was blocked by the O-ring, the source of which is unknown. The investigation will continue.
(SAS) Scandinavian Airlines announced enhancements to its long-haul business class (C) product, including a last-minute fare, new comfort kit, including a see-through 1 liter bag, upgraded audio/video-on-demand and a "breakfast on the go" for deplaning passengers. The late fare is available up until departure, guarantees a business class (C) seat, and is available on flights between Copenhagen/Stockholm and Bangkok, Beijing, Chicago O'Hare, Dubai, New York (JFK), Seattle, Tokyo Narita, and Washington Dulles.
The (SAS) Group will sell its 55% holding in Spanish ground handling services company Newco Airport Services to Teinver, which now will hold 100% of Spain's second-largest handling concern. (SAS) said the transaction value and positive effect on net debt and cash for the company is SEK400 million/$61.4 million.
A319-131 (3292, OY-KBT "Ragnald Viking"), delivery.
November 2007: Seven cargo airlines working in conjunction with (IATA) (ITA) and freight forwarders, initiated e-freight pilot programs on a number of selected trade routes. The airlines are Air Canada (ACN), British Airways (BAB), Cathay Pacific (CAT), (KLM), Martinair (MTH), (SAS), and Singapore Airlines (SQC). Cargo on key trade routes connecting the countries represented by the carriers, will be processed electronically. "The paper-free era for airfreight begins," (IATA) (ITA) Director General & (CEO), Giovanni Bisignani said. "This first wave of pilots (FC) will pave the way for a global rollout of e-freight that will eliminate the paper that costs this industry $1.2 billion every year. Combined, these documents could fill 39 747F cargo freighters each year, making e-freight a win for the business and for the environment." Participating freight forwarders in the e-freight pilot program are (DHL) Global Forwarding, Panalpina, Kuehne+Nagel, Schenker, (TMI) Group-Roadair, and Jetspeed. The potential impact of the increased efficiency in air cargo is expected to have "very broad implications across the global economy," Bisignani claimed. (AFA)/(KLM) said that based on its "experiences at [Amsterdam] Schiphol, we hope to introduce e-freight shipments on the [Paris] Charles de Gaulle network at a later stage" and that it is targeting 50% e-freight penetration on "important trade lanes" within five years.
(SAS) Cargo subsidiary, Spirit Air Cargo Handling Sweden and Nordic Airport Properties, reached agreement on construction of a 15,000-sq-m air cargo terminal in Cargo City at Stockholm Arlanda. The facility is scheduled to open in spring 2010.
Spanair (SPP) (CEO), Lars Nygaard "has requested to leave his position with immediate effect," parent the (SAS) Group said. He plans to "assume a new position outside the (SAS) Group," it added. Lars Nygaard is now the new (CEO) of Vueling Airlines (VUZ). Spanair (SPP) (CFO), Marcus Hedblom was named as the new (CEO).
The (SAS) Group named Lars Sandahl Sorensen, (CEO) of Scandinavian Airlines (SAS) International, succeeding Lars Lindgren, who will become Executive Chairman of Spanair (SPP). Sorensen joined (SAS) in 2003 as General Manager Australia & New Zealand, and became (CCO) in September 2006. Lindgren became (CEO) in 2004.
(SAS) announced the launch of 4x-weekly, Copenhagen (CPH) - New Delhi service in November 2008 and 3x-weekly (CPH) - San Francisco flights some time next autumn. (SAS) will add a new 245-seat A340 to handle the capacity increase.
The (SAS) Group is offering all of its 27 Dash 8-Q400 airplanes for sale. "There is big interest from airlines all over the world. To sell the Dash 8-Q400s will be not a big problem for us," an (SAS) spokesperson said, while refusing to divulge the names of potential customers. According to the company's interim flight schedule introduced when it grounded its Dash 8-Q400s, 90% of all (SAS) Denmark flights are being operated and the full schedule should be available again by year end. One route has been canceled, and frequencies on another 11 reduced. (SAS) Sweden is running 95% of its schedule and plans to be back to full strength by December 1. (SAS) Norway is operating close to normal. "Of course we are looking for a Dash 8-Q400 replacement. This is a top priority," the spokesperson added. The company's fleet renewal also could include a replacement for its MD-80s. "A decision could be made as early as the first half of 2008," according to the official. Currently, (SAS) is leasing airplanes from carriers like Blue1 (BLF), Transwede (TSW), Atlantic Airlines and others to fill the Dash 8-Q400 gap. On December 1, some of the leasing contracts will be renewed.
December 2007: The grounding and disposal of its 27 Dash 8-Q400s continues to be a major issue at the (SAS) Group, which is faced with choosing a replacement, while pursuing compensation from Bombardier (BMB) and deciding what to do with the employees charged with operating the turboprops, (CEO) Mats Jansson said. But he does not regret the decision to pull the airplanes from the fleet. "It was a tough decision, but we had seven years of problems with these airplanes. After 3 incidents, you have to react," he said, referring to landing gear trouble, (SAS) experienced in the fall. Regarding a replacement, (SAS) still has not determined whether it will buy jets or turboprops, but a decision is expected soon. "A final decision will be made by the end of this year," Jansson said. A renewal of the MD-80 fleet is in the offing as well, with a decision expected before next summer, he said. The Dash 8-Q400 affair will have an impact on both (SAS)'s bottom line and its employees. Jansson said the losses, related to the initial 3-week grounding and subsequent schedule disruptions, could total up to -SEK700 million/-$108.5 million for 2007, and he doesn't "want to speculate how much this will be next year." (SAS) continues to seek compensation from Bombardier (BMB). In addition, layoffs may face the impacted employees. "We don't know yet what consequences the grounding will have for the crew," he said. The sale of the airplanes also may affect other airlines, with the (CEO) of one significant Dash 8-Q400 operator saying, "We were not very happy about it, because it also affects the image of our Dash 8-Q400 fleet."
Jansson said (SAS) is midway through the process of selling its Spanair (SPP) subsidiary, and expects to announce a decision in the first quarter. "We have a lot of potential buyers," he said, ">1 and <20." He said he is unsure how much the company can expect to profit from the sale.
Grupo Marsans said that it has made a formal offer for (SAS) subsidiary Spanair (SPP) and that it expects a reply in early 2008, according to press reports from Madrid. Marsans' business plan reportedly includes the opening of a hub in Barcelona.
The (SAS) Group, which is endeavoring to simplify and narrow its business to focus on its "core" activity of transporting passengers in northern Europe, conceded that it has been unable to reach a consensus on the future of its non-core subsidiaries. Decisions on the "future structure" of (SAS) Ground Services (SGS), (SAS) Technical Services (STS), and Spirit (terminal management within (SAS) Cargo), were postponed until at least February 5, the next time (SAS)'s board is scheduled to meet. "These structural issues were on the agenda for a recent board meeting, but it was decided to carry them to the next board meeting (to leave more time to analyze the different alternatives)," (SAS) said. The announcement came as tension mounted between management and labor over union fears of massive job cuts relating to the "future structure" of the units. News reports from Sweden and Norway suggested that union leaders were threatening a holiday strike that could disrupt (SAS) operations over the Christmas/New Year's period. "There exists disagreement between the management and the trade unions, especially regarding (SAS) Ground Services (SGS), on the future structure," President & (CEO) Mats Jansson said.
(SAS) hopes to cut annual costs by -SEK2.8 billion/-$429 million by 2011 and establish a "new cooperation model with the unions." In addition to reorganizing/selling off/phasing out its noncore units, it is planning to sell Spanair (SPP) and its stakes in bmi (BMA), and Air Greenland (AGL). Chairman Egil Myklebust said that it was "wise" to take "some more time to analyze various structural alternatives for (SGS), (STS) and Spirit, before the board addresses the matters." (SAS) created a "control group" consisting of management and labor representatives, who has worked since summer to determine the future of the noncore subsidiaries. "Although we have worked together on this continuously for 4 months and elucidated the issues from many sides, the control group has not succeeded in determining a joint recommendation," Jansson said.
January 2008: 2007 statistics: 27.31 billion (RPK)s passenger traffic -.7%; -.3% capacity (ASK)s; -.3 load factor for 74.1% LF.
SEE ATTACHED COMPARISON CHART TO SELECTED OPERATORS - "SAS-2007-STATS." In 2007, 31.2 million passengers flew with (SAS) to 152 destinations in 34 countries.
Airlines throughout the world are contending with antitrust (ATI) charges made at the end of 2007 by the European Commission (EC), which has accused at least 11 and as many as 25 carriers of "cartel" activity relating to airfreight transport. In addition to British Airways (BAB), Japan Airlines (JAL), Air France (AFA)/(KLM), (SAS) Group, and Cargolux (CLX) (all of which confirmed receipt of statements of objections from the (EC) before Christmas),(ANA), Air New Zealand (ANZ), Air Canada (ACN), Cathay Pacific Airways (CAT), (LAN) and Singapore Airlines (SIA) have admitted to being charged. Carriers charged late last year, have 2 months from the receipt of statements of objections to respond in writing to the (EC) and also have the option of requesting a formal hearing. An airline found guilty or admitting to guilt can be fined up to 10% of its annual revenue.
(SAS) said that inspections revealed that a majority of (SSV) valves on the landing gear of its Dash 8-Q400 fleet were defective, thereby relaunching the blame game, that started when (SAS) removed the airplanes from service following 3 incidents last fall. The (SAS) Group put its 27 Dash 8-Q400s up for sale in November, following 3 landings, during which landing gear did not function properly. "It was a tough decision, but we had seven years of problems with these airplanes. After 3 incidents, you have to react," (CEO) Mats Jansson said last month.
Regulatory bodies and Bombardier defended the Dash 8-Q400, but (SAS) Executive VP Corporate Communications Claus Sonberg said that while (SAS) does not want "to speculate about the reason behind the third accident," while it awaits investigators' conclusions, "it can confirm, however, that our Technical department has found problems in 63% of the (SSV) valves on the inspected airplanes that we have permanently grounded." (SAS) said the Danish Accident Investigation Board (DAIB) concluded that "a construction error in the actuators was the cause of the first two accidents" and that (SAS) "cannot be blamed for not discovering these problems, or the undetected error that caused the first two accidents, in the course of its maintenance work." The (DAIB) issued a preliminary report on the third incident, targeting an "O" ring that came loose from the (SSV) valve in the hydraulics system. "The (SSV) valve also has a construction error and is currently being modified by the supplier," (SAS) concluded. "There is no new evidence published by any investigation authority that alters the conclusions reached by the (DAIB) in its preliminary report, and (EASA) in its statements, with respect to the cause of the "O" ring blockage, that prevented the main landing gear actuator from fully extending," a Bombardier spokesperson said. "While search into Dash 8-Q400 main landing gear incidents continue, Bombardier (BMB) will not comment or speculate on specific issues in isolation, such as the (SSV) valve, without the context of the final reports."
February 2008: The (SAS) Group reported net income of +SEK636 million/+$98.6 million for 2007, significantly lower than a +SEK4.74 billion profit in 2006, that was attributable mostly to that year's sale of its 65% holding in the Rezidor Hotel Group. The 2006 profit, excluding the Rezidor sale, was a more modest +SEK164 million and President & (CEO) Mats Jansson noted that "favorable demand" led to a "positive" performance in the 1st 3 quarters of 2007, resulting in a relatively strong full-year profit. However, (SAS) endured a -SEK625 million loss in the 4th quarter, that it attributed mainly to the -SEK700 million hit taken from the grounding of its Dash 8-Q400s. Jansson warned that this likely will have a negative effect on 2008 earnings of approximately -SEK700 to -SEK800 million. He added that earnings at subsidiaries (SAS) Technical Services and (SAS) Ground Services "were strongly negative in 2007." As part of its "Strategy 2011" turnaround plan, the group decided that Technical Services would outsource heavy maintenance of 737 Classics, and that Ground Services will remain a subsidiary only, if it "can improve a number of quality and profitability targets" within 18 months. The key requirement is a +SEK400 million improvement in costs. Spirit Air Cargo Handling, part of (SAS) Cargo, will be divested. Jansson also said divestment of Spanair (SPP) is expected to be completed in the upcoming 2nd quarter.
Full-year revenue increased +4.7% to SEK54.11 billion and operating income was +SEK1.31 billion, up +29.7% over +SEK1.01 billion in the prior year. Group traffic rose +1.9% to 31.68 billion (RPK)s on a +2.2% lift in capacity to 43.69 billion (ASK)s, producing a load factor of 72.5% LF, down -0.3 point. Jansson said (SAS) is "focusing on regaining customers' confidence" in the aftermath of the Dash 8-Q400 grounding, and takes "a very serious view of the weaker trend at the end of 2007, and the economic downturn that can be foreseen." He acknowledged that the "Strategy 2011" plan "is delayed and generating major future challenges," citing "cultural problems" as a primary impediment.
The (SAS) Group became the principal shareholder in "GO," a Norwegian company launched last May, that sells travel through (SAS), the Avis Budget Group and gonow.no websites. (SAS) bought out the Reitan Group, which maintains its distribution agreement with GO.
The (SAS) Group nomination committee proposed Fritz Schur as Chairman at (SAS)'s annual general meeting scheduled for April 9. Egil Myklebust planned to step down, (SAS) said. Schur has sat on the (SAS) board since 2001.
Aviareps will represent (SAS) Scandinavian Airlines in Ukraine under a General Services Agreement (GSA). (SAS) operates 3x-weekly, Copenhagen - Kiev.
(SAS) Sverige announced a summer schedule that included new flights from Stockholm Arlanda to Zagreb (2x-weekly from March 31, and 3x-weekly from April 30) and Stavanger (4x-weekly, from March 30). 2x-weekly seasonal flights to Tromso will operate June 23 to August 22. Weekly seasonal service to Nice will operate from Angelholm, July 1 to August 5, and Vaxjo, August 26 to September 16.
March 2008: A consortium including Portuguese-Canadian investment fund, the Longstock Financial Investment Fund and Madrid-based, Gadair European Airlines has offered €450 million/$693 million for Spanair (SPP), Longstock President Vitor Pinto da Costa told "Diario Economico." He said the offer is well above Iberia (IBE)'s bid of €300 million, yet he admitted it could fall though owing to an (SAS) condition that the consortium pay €100 million before the deal is completed, according to "Reuters." He said the clause is unacceptable because Longstock would lose the money, if the bid eventually was rejected by regulators.
(SAS) said the company is talking to several parties about Spanair (SPP), and still is targeting the end of June for a deal. However, Pinto da Costa told "El Mundo" that Longstock will remain interested, only if it can sign a deal by the end of this month. Iberia (IBE) confirmed that it did bid for Spanair (SPP) and received a letter from (SAS) on March 14 saying it had progressed to a final round in the bidding process. (IBE) declined to say how much it offered.
(SAS) announced the launch of an aggressive environmental strategy, aimed at reducing carbon dioxide emissions by -20% from 2007 levels by 2020. The airline group said it will reach the target, which assumes passenger growth of +4% annually, by "implementing energy enhancements and mixing jet fuel with renewable sources." It said reaching the targeted reduction "requires a large number of short-term and long-term activities" by both it and the global aviation industry, including developing new technologies such as alternative fuels and the building of new airplanes "with improved aerodynamics and more efficient engines," infrastructure upgrades such as implementation of the "Single Sky" European Union (EU) Air Traffic Control (ATC) system, and lowering fuel consumption in daily operations. In addition to efforts regarding air operations, (SAS) plans by 2011 for its various airlines and ground-handing operations to employ "only environmentally friendly cars."
SEE ATTACHED - (SAS) EMISSIONS PLAN-2008-03."
Beijing Capital International Airport's new $3 billion-plus Terminal 3 opened, as Shandong Airlines (SHG) flight SC1151 arrived from Jinan at 8:39 am. UK architect, Norman Foster claimed it is the largest covered structure ever built (3.25 km long and 1.3 million sq m of floor space). Construction began in March 2004. The airport said the three-concourse facility welcomed Shandong (SHG), Sichuan Airlines (SIC), Qantas (QAN), Qatar Airways (QTA), British Airways (BAB), and El Al (ELA). A second move is scheduled for March 26, when Air China (BEJ), Shanghai Airlines (SHA), (SAS), Austrian Airlines (AUL), Lufthansa (DLH), Asiana Airlines (AAR), Air Canada (ACN), United Airlines (UAL), (ANA), Thai Airways (TII), Singapore Airlines (SIA), Finnair (FIN), Cathay Pacific Airways (CAT), Japan Airlines (JAL), Dragonair (DRG), Turkish Airlines (THY), Emirates (EAD), Air Macau (MCU), (S7) Airlines (SBR), and EgyptAir (EGP) will transfer to the new building. "Reuters" reported that airport capacity will be boosted to 76 million per year from the 52 million it served in 2007. The baggage system can handle 19,800 pieces per hour, it said.
Later, Star Alliance (SAL) carriers Air Canada (ACN), Air China (BEJ), (ANA), Asiana Airlines (AAR), Austrian Airlines (AUL), (LOT) Polish Airlines, Lufthansa (DLH), (SAS) Scandinavian Airlines, Shanghai Airlines (SAL), Singapore Airlines (SIA), Thai Airways (TII), Turkish Airlines (THY), and United Airlines (UAL) each completed the transfer of their operations to Beijing International's Terminal 3. The move was part of the collocation plan developed as a result of Air China (BEJ) and Shanghai Airlines (SHA) joining the (SAL) alliance last year. A similar collocation will be completed at Shanghai Pudong on April 29.
The (SAS) Group said it will receive "slightly more" than >SEK1 billion/$163.3 million in cash and credit toward new airplane purchases in settlement with Bombardier and Goodrich (BFG) over the Dash 8-Q400 landing gear incidents that led the airline to retire its 27 Dash 8-Q400s last fall. As part of the settlement, (SAS) ordered 13 firm CRJ-900 NextGens, worth $474 million and 14 Dash 8-Q400 NexGens worth $356 million. It optioned a further 17 CRJ-900s and seven Dash 8-Q400s. Delivery of the firm airplanes begins this fall and continues through 2011. Bombardier (BMB) valued the firm orders at approximately $883 million, which could increase to $1.75 billion, if all options are exercised. The CRJs will be delivered to (SAS) Scandinavian Airlines and Estonian Airlines (ENA), while the Dash 8-Q400s will go to subsidiaries, Wideroe and airBaltic (BAU). "We are very satisfied with the settlement with Bombardier," (SAS) President & (CEO), Mats Jansson said. "The firm order for 27 airplanes will bring a rejuvenated premium product to our customers. The CRJ-900 and Dash 8-Q400 NextGen airplanes are well-suited to our operations in Northern Europe."
(SAS) Denmark signed a contract with Atlantic Airways for the wet-lease of three Avro RJs until May 2009. The airplanes operate out of Copenhagen to Birmingham, London City, and Stavanger.
April 2008: Virgin Atlantic Airways (VAA) reaffirmed its well-known interest in acquiring bmi (BMA) and reportedly is seeking support from Lufthansa (DLH), which holds 30%-minus-one-share in bmi (BMA) and an option to acquire (BMA) Chairman, Michael Bishop's 50%-plus-one-share stake by the end of June 2009, for the tie-up. "We are very interested in a merger with bmi (BMA)," (VAA) External Affairs & Route Development Director, Barry Humphreys told "Sueddeutsche Zeitung," noting (DLH) could hold a stake in the new merged entity. Virgin (VAA) and bmi (BMA) held unsuccessful merger talks in 2003, but Bishop since repeatedly has stated that he is not selling his stake.
(DLH) declined comment, but (SAS) is prepared to sell its stake at the "right" price. "We are well aware that there may be limited interest for a 20% stake," an (SAS) spokesperson told the news service, adding that Virgin (VAA) has not contacted (SAS), and that while (DLH) has no legal sway over its decisions, "they are our close partner so we'd want to discuss [a sale] with them." (VAA) is 51%-owned by the Virgin Group, while the remaining 49% is held by Singapore Airlines (SIA), which has left open the possibility of a divestment.
(SITA) will provide (SAS) Scandinavian Airlines with telecommunication services covering 800 users in 40 locations across 23 countries. The contract is expected to save (SAS) -$3.6 million.
Airbus (EDS) announced completion of an in-flight demonstration involving its own A340 and an (SAS) A330, during which the former performed several altitude changes in relation to the latter in oceanic airspace using a new (ADS-B) system that includes an Aviation Communication & Surveillance Systems (ACSS) Traffic Computer. Airbus (EDS) said the A340 pilot (FC) was able to receive on his navigation display all flight identification and positioning information, relating to surrounding airplanes. The procedure, called Cristal (ITB), "will enable airplanes to more easily perform altitude changes during cruise , which can significantly improve flight efficiency, reducing fuel burn and emissions," Airbus (EDS) said. It currently is certifying the (ACSS) system.
The (SAS) Group has sold six Dash 8-Q400s to Philippine Airlines (PAL).
737-85P (35706, LN-RRE), bought from Air Europa (ARE).
May 2008: (SAS) Norge (BRT) will pay NOK132 million/$26.3 million in damages to Norwegian (NWG) following a district court ruling in the nearly three-year-old proceeding into (SAS)'s alleged misuse of information contained in Norwegian (NWG)'s Amadeus reservation system. (SAS) was acquitted in a 2005 criminal trial, but was found to have misused confidential information. (SAS) Norge (BRT) President, Ola Strand said an appeal was "highly probable." (SAS) said it "apologized for the inconvenience caused to Norwegian (NWG) in relation to the matter, but rejected the claim made in court that this resulted in financial losses."
Swedish union Pilotforbundet threatened to take its 100 (SAS) pilots (FC) out on strike, beginning May 18, unless a collective wage agreement is reached. (SAS) said the action probably will not affect its operation, as just 100 of its 1,700 pilots (FC) are members of Pilotforbundet. Swedish Airline Pilots Association, the country's largest pilot union, said it did not support the Pilotforbundet's initiative. It already has a wage agreement covering its (SAS) members.
(SAS) Scandinavian Airlines said it requested a -10% price reduction on goods and services it receives from its suppliers as part of its "Profit 2008" program.
Iberia (IBE) might reassess its offer for Spanair (SPP), which it launched in February. "The truth is the clock is ticking. The environment is changing. We have to consider what the future of our offer is within this new market environment," Chairman, Fernando Conte told a news conference before (IBE)'s annual shareholders meeting, "Reuters" reported. Regarding merger discussions with Vueling Airlines (VUZ) and Clickair (CLK), in which (IBE) holds 20%, Conte said, "I believe we are very close at this point."
Meanwhile, the (SAS) Group issued a statement noting that while it still hopes to finalize the Spanair (SPP) sale before the end of the quarter, it might abandon it altogether. "The sales process continues with the interested parties with the same time target. If (SAS) does not reach a satisfactory solution regarding the divestment, (SAS) will abandon the current sales process and continue as a shareholder committed to ensure a profitable Spanair (SPP)," it said, promising it would make a decision before the end of next month.
737-85P (35707) bought from Air Europa (ARE).
June 2008: The (SAS) Group likely will announce a new cost savings program featuring further "dramatic" cuts as it grapples with high fuel prices and weakening demand, (CEO), Mats Jansson told Sweden's Dagens Industri. (SAS) announced in April the removal of 11 airplanes from the fleet and a workforce reduction of -1,000 employees.
The (SAS) Group abandoned its effort to sell Spanair (SPP), saying that as a result of the "challenging market conditions in the Spanish aviation market, coupled with record oil prices and pressure in the financial sector," it has been unable to "reach its targeted terms and conditions on the divestment." (CEO), Mats Jansson said Spanair (SPP) is "a company with a competitive cost position" and that (SAS) is committed to its future.
Air France (AFA)/(KLM), Cathay Pacific Airways (CAT), Martinair (MTH) and the (SAS) Group all reached agreement with the USA Department of Justice (DOJ) to plead guilty in USA court and pay criminal fines "for participating in a multiyear conspiracy to fix prices for air cargo rates," the (DOJ) said. (AFA)/(KLM) will pay a $350 million fine, Cathay (CAT) has agreed to pay $60 million, Martinair (MTH) $42 million, and (SAS) $52 million, bringing the total imposed by the (DOJ) during its investigation into air cargo antitrust violations to $1.27 billion. The figure marks the highest amount ever imposed by the antitrust division in one investigation. British Airways (BAB), Korean Air (KAL), Japan Airlines (JAL), and Qantas (QAN) already have pled guilty and paid fines. In addition, a former Qantas (QAN) executive will serve eight months in a USA jail as a result of the investigation.
(AFA)/(KLM) Chairman & (CEO), Jean-Cyril Spinetta said the company has "taken thorough steps across the organization to prevent recurrence." (SAS) President & (CEO), Mats Jansson said there are "various control mechanisms" in place to prevent antitrust violations, adding that it was "very unfortunate and a serious problem that our policies were not fully observed in this case." Cathay (CAT) (CEO), Tony Tyler said that airline "carefully considered all applicable factors and concluded that entering into this agreement at this time, presents the best resolution to the investigation," adding that "it transpired that some of our actions relating to shipments from Hong Kong to the USA were in conflict with USA antitrust laws, and we very much regret this."
The (DOJ) said that "the airlines each engaged in a conspiracy to suppress and eliminate competition, by fixing the cargo rates charged to customers for international air shipments. The charged conduct affected billions of dollars of consumer and other goods (shipped by these airlines and their competitors)." Associate Attorney General, Kevin O'Conner added that the "price-fixing conspiracy undermines our economy and harms the American people who, due to lack of true competition in this area, end up footing the bill." The (DOJ) said its investigation is ongoing. Both Air Canada (ACN) and El Al (ELA), which were not included in the agreements recently announced, said they have made provisions for possible settlements with the (DOJ) regarding cargo antitrust violations. The European Union (EU) and other government agencies throughout the world, also are conducting continuing investigations into alleged anticompetitive airfreight rate practices.
Singapore Technologies Aerospace completed the purchase of the (SAS) Group's remaining 28.7% shareholding in (ST) Aerospace Solutions (Europe) for €28.3 million/$44.4 million following the exercise of a put option by (SAS) under a 2006 agreement between (SAS) and (ST) Aerospace. (STA) Solutions now becomes a wholly owned subsidiary of (ST) Aerospace. (SAS) sold an initial 67% shareholding in the unit, formerly known as (SAS) Component, in 2005.
August 2008: 1st 6 months 2008 = 21.01 billion (RPK)s traffic (SEE "SAS-08TOPWLD6MTHSRPK)."
October 2008: The (SAS) Group said that a decline in bookings related to the August Spanair (SPP) MD-82 crash at Madrid will impact its result by -SEK500 million/-$69.4 million.
"Forward bookings in Spanair (SPP) have, as expected, been affected by the tragic accident. The initial effect was significant, but the bookings are gradually improving and [are] now almost in line with normal levels," (SAS) said.
(SAS) Scandinavian Airlines will operate seasonal 3x-weekly, London Heathrow - Copenhagen - Dubai, October 29 - March 26, aboard an A340-300.
The (SAS) Group signed a Memo of Understanding (MOU) with Gate Gourmet Switzerland for a five-year catering contract scheduled to be finalized in two weeks. The agreement, which includes a two-year extension option, applies to catering supplies for (SAS) departures from Copenhagen, Stockholm Arlanda, Gothenburg, Malmo, Oslo, and Bergen.
November 2008: The (SAS) Group's third quarter, which was blackened by the August Spanair (SPP) MD-82 accident in Madrid that claimed 154 lives, ended with a -SEK2.01 billion/-$260 million net loss that represented a reversal from the year-ago period's +SEK701 million profit and largely was due to a SEK1.96 billion goodwill impairment at the Spanish subsidiary.
President & (CEO), Mats Jansson said the crash's financial impact occurred "against the background of the considerable turmoil in the financial markets, the weakening of the economy and overcapacity in the air travel market." Group revenue rose just +0.4% to SEK16.37 billion, while earnings, excluding nonrecurring items, plunged -81.7% to SEK101 million, which Jansson blamed on dropping demand, a decrease in premium traffic and high oil prices. He said the drop in oil will be offset by the rising value of the USA dollar and the "deepening" global financial crisis. Its operating result swung to a -SEK1.67 billion loss from a +SEK529 million profit.
The company's "Profit 2008" savings program, designed to enhance earnings by +SEK1.5 billion and which includes removal of 18 airplanes from service, "is proceeding as planned," Jansson said, while the group's operational performance "is now highly stable." It has implemented SEK890 million of planned "Profit 2008" initiatives so far. Spanair (SPP) is implementing its own program, that includes the removal of an additional 15 airplanes.
Lufthansa (DLH) suspended talks regarding a possible takeover of the (SAS) Group, Germany's "dpa" news agency reported, citing sources close to the negotiations who said a steep loss at (SAS) subsidiary, Spanair (SPP) is a primary reason for the retreat. (DLH) Chairman & (CEO), Wolfgang Mayrhuber said several weeks ago that "many carriers" have approached him about investment, but that "our resources have a limit." (DLH) holds recent stakes in Brussels Airlines (DAT)/(EBA), bmi (BMA), and JetBlue Airways (JBL), and is evaluating potential investments in Alitalia (ALI), and the Austrian Airlines (AUL) Group (AAG). Regarding the latter, Mayrhuber said (DLH) "made a very fair offer to the owner, (OAIG), but we want a fair split of (AAG)'s debts."
December 2008: (SAS) Group's restructuring took a significant step forward with announcement of the sale of its airBaltic (BAU) stake and a new majority investor in Spanair (SPP). (BAU), in which (SAS) holds 47.2%, will be sold to the airline's management for LAT14 million/$27.5 million in cash by January 31, (SAS) announced, resulting in a SEK175 million/$22.5 million capital gain for the Scandinavian company. "This divestment is in line with our strategy not to maintain minority holdings in our airlines. We are pleased to have built (BAU) to a strong Baltic airline, and we are confident that the new owners will continue to develop the company in a positive direction," (SAS) President & (CEO), Mats Jansson said. It announced its intention to divest (BAU) over the summer.
The Latvian government turned down the opportunity to pay LAT47 million for the stake, a Transport Ministry official told reporters. Latvia owns the other 52.8% of the carrier. (BAU) will continue to cooperate with (SAS) on flights to/from Riga, (CEO), Bertold Flick said.
(SAS) said it will remain a "core shareholder" in restructuring (SPP) but has agreed to introduce a group of Catalonian majority investors led by Consorci de Turisme de Barcelona and Catalana d'Iniciatives. It has tried several times to offload the airline but appeared resigned to keeping it when Iberia (IBE) backed off in June. (SAS) said final negotiations are ongoing and the final agreement is expected to be signed by January 31.
The (SAS) Group named Mats Lonnqvist as its new (CFO), and Deputy President, succeeding Gunilla Berg.
January 2009: (SAS) is to boost frequencies on its Copenhagen - London Heathrow route with the re-introduction of a 7th daily service. The additional flight will be launched from March 29th and will increase its daily connections between the two capital cities to nine, thanks to its additional two flights into London City.
The (SAS) Group took a major step toward achieving its goal of -SEK4 billion in cost reductions following the finalization of labor agreements with its trade unions that it said will save -SEK1.5 billion/-$182.4 million.
(SAS) believes the remaining SEK2.5 billion can be achieved in other areas of (SAS). President & (CEO), Mats Jansson said the labor savings "represent a positive result for these negotiations," which began in November, and are a "clear indication that we are on track to succeed in a cultural turnaround." The restructured labor accords represent a cost reduction of some -12%, with two-thirds related to working hours, per diem expenses, pensions and insurance and one-third coming from salary cuts. The pilots (FC), (CEO) and other members of group management will not receive increases in 2009, and salaries also will be reduced by -6%. In addition, group management will not be paid any variable salary for 2008. (SAS) (AB) board members have lowered their fees by -6% starting this month.
(SAS) said the -SEK1.5 billion in savings includes a nonrecurring -SEK156 million resulting from the reversal of pensions at SAS Norge (BRT).
Separately, (SAS) said it sold its holdings in Palma de Mallorca-based Aerolineas de Baleares (BST), which operated five 717s for Spanair (SPP) until the third quarter of 2008, to Proturin of Mallorca. (SAS) lost -SEK200 million on the transaction.
Lufthansa (DLH) supervisory board Chairman, Juergen Weber told "Frankfurter Allgemeine Zeitung" that "if the conditions are right, (SAS) will become interesting for us" as an acquisition target.
CL-600-2D24 (15211, OY-KFB), delivery.
February 2009: A stunning -SEK6.32 billion/-$754.7 million full-year loss, reversed from a +SEK636 million profit in 2007, prompted the recent unveiling of a new restructuring initiative dubbed "Core (SAS)" that will include a SEK6 billion rights issue and approximately -3,000 layoffs. (SAS) Group President & (CEO), Mats Jansson said "Core" will "lead to (SAS) becoming a more focused and less complex company" concentrating on the Nordic market, business travelers, "efficient" organization, reduced costs and a "strengthened capital structure." The rights issue will comprise ordinary shares with a subscription period for shareholders tentatively scheduled for March 23 to April 6. (SAS) also secured extensions on several credit facilities worth a combined SEK6.5 billion.
The layoffs will be in addition to the -5,600 employees that will leave the group as a result of divestments and outsourcing. More than half that number are affiliated with Spanair (SPP), which (SAS) sold to Spanish investors. It plans to divest its stakes in bmi (BMA), Air Greenland (GRL), Estonian Airways (ENA), and other subsidiaries while discontinuing or outsourcing select operations of its Ground Services, Technical Services and Cargo units. In all, the number of full-time-equivalent employees will fall to some 14,000 from 23,000.
The network will be "streamlined," with priority given to business (C) travelers. The short/medium-haul fleet will be reduced by an additional -14 airplanes to 130 and the long-haul fleet will be cut to nine planes from 11. Cost cuts throughout the company are designed to net -SEK1.7 billion in savings, and the recent renegotiation of labor agreements will produce an additional -SEK1.3 billion annually. (SAS) said a remaining cost gap of SEK1 billion will be addressed in 2010 and 2011.
(SAS)'s 2008 revenue rose +5.1% year-over-year to SEK53.2 billion and its operating result swung to a -SEK765 million loss from a +SEK1.29 billion profit in 2007. It said its performance was "burdened" by high fuel prices, the poor economy and "extensive" consequences of its Dash 8-Q400 retirements. Of the four Scandinavian Airlines units, only (SAS) Norge was profitable on an operating level with an (EBIT) before nonrecurring items of +SEK142 million. Passenger numbers fell -8.1% and load factor was down -3.2 points.
In the fourth quarter, (SAS) reported a -SEK2.77 billion loss compared to a -SEK625 million deficit in the year-ago period. Operating result reversed to a -SEK324 million deficit from a +SEK91 million profit.
The (SAS) Group announced the completion of its sale of a majority share in Spanair (SPP) and its entire stake in airBaltic (BAU). A consortium of Spanish investors led by Consorci de Turisme de Barcelona and Catalana d'Inciatives acquired an 80.1% stake in Spanair (SPP) for €1/$1.31, leaving (SAS) with the remainder. (SAS) took a -SEK712 million/-$87.9 million loss on the deal that will reflect on its fourth-quarter balance sheet. It will convert €20 million in existing loans to Spanair (SPP) into equity and repay its external loans of €18 million, while €99 million of existing interest-bearing indebtedness to (SAS) will remain outstanding and be amortized in line with Spanair (SPP)'s future cash flow generation. (SAS) will continue to lease 18 airplanes to Spanair (SPP). Its 47.2% holding in airBaltic (BAU) was sold to airline management. "The transaction has been completed and payment in respect of the shares has been received in accordance with the announced terms," (SAS) said.
(SAS) announced the following network reductions: Stockholm Arlanda (ARN) - Beijing service will shut down on April 29. Daily, Copenhagen (CPH) - Seattle service will be cut to 6x-weekly and stop completely at the beginning of the 2009 to 2010 winter schedule. (ARN) - Bangkok and (CPH) - Delhi flights also will be suspended next winter.
March 2009: (SAS) Group shareholders approved a rights issue expected to raise up to SEK6.06 billion/$704.9 million before costs, in which each share held on March 18 will entitle the holder to subscribe to 14 new shares at SEK2.63 each. The company's share capital was reduced by -SEK1.23 billion without redemption of shares "in order to enable and facilitate the rights issue," it said.
The primary initiatives of "Core (SAS)," the restructuring plan unveiled last month to transform (SAS) following a heavy 2008 loss, should be completed by the end of April, (SAS) officials said.
(SAS) has stated that it wants to become a "more focused and less complex company" concentrating on the Nordic market, business travelers, "efficient" organization, reduced costs and a "strengthened capital structure." "Core (SAS)" was a reaction to the stunning -SEK6.32 billion/-$754.7 million full-year loss announced last month.
Realizing that it is no longer a potential takeover target, (SAS) is seeking to prepare itself for a standalone future within the Star Alliance (SAL). "For restructuring (SAS), we removed SEK4 billion out of the cost base," VP International Areas, Per Moeller Jensen said.
Measures have been taken in nearly every area of the business. The current airplane fleet comprising 157 will be reduced to 130 by year end, including 11 that will be parked temporarily. By November, 21 MD-80s will be retired.
The number of full-time employees will drop from 23,500 to 14,000, including staff from subsidiaries. "By the end of April, all employees who have to leave should be informed," Moeller Jensen said. The network will be "streamlined," he added, with priority given to business (C) travelers. Leisure routes will be slashed, especially to seasonal destinations.
(SAS) took delivery of its first of 12 88-seat CRJ-900s. All airplanes should be delivered by January 2010. (SAS) also holds options for another 17. It told reporters in Copenhagen that talks to turn the options into firm orders will be held in September for possible deliveries starting in 2010. The 12 CRJ-900s, a part of a settlement with Bombardier (BMB) and Goodrich (BFG) over the Dash 8-Q400 landing gear incidents that led (SAS) to retire its 27 Dash 8-Q400s in October 2007 and have forced it to wet-lease airplanes to fill the gap.
A340-313X (OH-KBI) lands at Tromso Airport, Northern Norway, becoming the largest commercial airliner to land there (SEE ATTACHED PHOTO: "SAS-A340-TROMSO-2009-03.").
CL-600-2D24 (15221, OY-KFD) delivery.
April 2009: (SAS) Scandinavian Airlines, Wideroe and Blue1 (BLF) signed a 10-year agreement to adopt the full Amadeus Altea Customer Management platform to manage global sales and reservations, inventory and departure control processes. Amadeus will implement the new technology platform "through a phased migration process" starting next year. Altea is the heart of the common Information Technology (IT) platform adopted by the Star Alliance (SAL) a few years ago.
The (SAS) Group announced official completion of its sale of 80.1% of Spanair (SPP) to Initiatives Empresarials Aeronautiques (IEASA), a Catalonian consortium comprising Consorci de Turisme de Barcelona, Catalana d'Inciatives, Volcat 2009 and Fira de Barcelona, for €1/$1.32. (SAS) will continue to hold the remaining 19.9% and to partner with the carrier. (IEASA) will inject €100 million into (SPP) this month, while (SAS) has offered a bridge loan of €15 million due April 30.
(SAS) announced the re-election of Fritz Schur as Chairman.
The (SAS) Group said its rights issue authorized last month ended up oversubscribed by +23.3%, ensuring that the company will receive some SEK6 billion/$734.8 million in proceeds before transaction costs. "We are pleased that our shareholders, as well as new investors, have shown their confidence in and support for (SAS) and our new strategy, "Core (SAS),"" President & (CEO), Mats Jansson said. "We will use the rights issue proceeds to strengthen our capital structure and to facilitate the implementation of "Core (SAS)." After the implementation of "Core (SAS)," we will have a more focused commercial offering, a more cost and decision efficient organization, and be better positioned for improved profitability and to meet future challenges."
CL-600-2D24 (15224, OY-KFE), delivery.
May 2009: 737-883 (34546, LN-RRH) and CL-600-2D24 (15231, OY-KFF), deliveries.
June 2009: Lufthansa Technik (DLH) (LTK) signed a 10-year contract with (SAS) covering Maintenance Repair & Overhaul (MRO) on landing gear on four A319s, eight A321s, four A330s and seven A340s.
July 2009: Swiss International Air Lines (CSR) launched 2x-daily, Zurich - Oslo Gardermoen service aboard an A319. Under a code share agreement, (SAS) will operate the route 6x-weekly.
Amadeus won a five-year contract from the (SAS) Group for a full-content agreement that guarantees travel agents access to the full range of fares and inventory of (SAS) Scandinavian Airlines, Wideroe, Blue1 (BLF) and Estonian Air (ENA).
3 CL-600-2D24s (15237, OY-KFG; 15240, OY-KFH; 15242, OY-KFI), deliveries.
August 2009: The (SAS) Group launched a new -SEK2 billion/-$272 million cost-saving program after posting its seventh consecutive quarterly consolidated net loss, a -SEK1.05 billion second-quarter deficit that compared to a -SEK422 million net loss in the year-ago period.
The new initiative, which includes cutting another -1,000 to -1,500 jobs and a -10% to -20% pay and pension reduction for cabin crew (CA) and pilots (FC), is in addition to the -SEK4.5 billion "Core SAS" cost-cutting plan initiated in February. "Additional measures are required to manage the unique, fierce competition in today's highly challenging market," President & (CEO), Mats Jansson said. "Accordingly, it is essential that we now completely close (SAS)'s cost gap with our competitors. This is a matter of competing on equal conditions and, ultimately, about the survival of (SAS)."
The Core (SAS) restructuring resulted in a one-time charge of SEK1.03 billion in the reporting quarter. Before nonrecurring items, net earnings totaled +SEK38 million.
(SAS) secured a contract to provide domestic travel for Swedish government employees from October 1, 2009, through September 30, 2010. The contract applies to all government agencies, departments, institutions of higher education and universities. (SAS) valued it at SEK250 million/$34.5 million, but said it potentially could be worth twice as much. "The Swedish government is the single largest and most important customer for (SAS) in Sweden," (SAS) said. "Government employees mostly travel on the routes between Stockholm and Lulea, Malmo, and Ronneby."
The (SAS) Group named Leif Rasmussen, President, (SAS) Cargo Freight division.
September 2009: Iberia (IBE) Maintenance reached agreement with (SAS) Scandinavian Airlines to provide "C" and "D" maintenance checks on its MD-80s, A330s and A340s.
October 2009: (SAS) agreed to sell its 20% stake in bmi (BMA) to Lufthansa (DLH)-related UK holding company, (LHBD) Holding, effectively giving (DLH) full control over (BMA), when the transaction takes effect on November 1. Under the terms of the agreement, (LHBD), which already owned an 80% stake in (BMA), will pay (SAS) £19 million/$30.4 million for its 20% stake. (DLH) also agreed to pay (SAS) an additional +£19 million for the cancellation of rights relating to a 1999 shareholder agreement. (DLH) added that it will make further payments to (SAS) if it decides "to sell (BMA) completely or parts of the company . . . within the next two years." (DLH) currently holds a 35% stake in (LHBD), but (DLH) said it "expects to be able to acquire 100% of (LHBD)" in the near future.
It is unclear whether (DLH) will look to restructure (BMA) and hold onto all or part of it or will seek to sell all or part. It said last month that it had received interest from 12 potential buyers for a sale of (BMA).
Flybe (BEE) Chairman & (CEO), Jim French said that (BEE) is interested in acquiring parts of (BMA) and has expressed that interest to (DLH). He noted that "(BMA) losses are much higher than previously reported." It's expected 2009 losses have been pegged at -£150 to -£170 million on revenue of around £1 billion by media reports.
(SAS) said it was divesting its interest in accordance with its "core (SAS) strategy with focus on the Nordic home market." It has been a shareholder in (BMA) since 1989. (DLH) has been poised to take full ownership of the carrier since it announced an out-of-court settlement in June to acquire former (BMA) Chairman, Michael Bishop's 50%-plus-one-share stake.
Braathens Information Technology (IT) Solutions will provide its Ticketless Travel Platform to the (SAS) Group. The product will be integrated with the Amadeus Altea suite and become part of (SAS)'s new distribution platform scheduled for implementation in 2012.
2 CL-600-2D24s (15244, OY-KFK; 15246, OY-KFL), deliveries.
November 2009: (SAS) said that "the existing cost gap relative to relevant competitors will diminish but not close completely" as a result of "Core (SAS)" and that a "large part" of the remainder "is associated with collective agreements." It said negotiations with cabin crew (CA) in Sweden and Norway and ground staff in Denmark have produced -SEK130 million in savings. It has not reached agreements with its three pilot (FC) unions or Danish flight attendants (CA). "A number of counter demands have been made in the final stages of negotiations, which the (SAS) management and board . . . cannot accept," it said.
The (SAS) Group currently operates nine A330s/A340s and will not continue to operate a long-haul network if it is forced to reduce that fleet to fewer than seven, President & (CEO), Mats Jansson said at a Star Alliance (SAL) event in Newark. "The crisis hit (SAS) in November/December 2007, at a time where we had actually been evaluating extending our long-haul fleet from 11 to 12 airplanes. But we eventually had to reduce the fleet," he said. "Hopefully we can keep the nine airplanes." Should (SAS) be forced to cut long-haul capacity further as a result of additional declines in demand or yield, it could be facing a situation in which it would not make financial sense to fly inter-continentally. "Seven airplanes would be the limit," Jansson confirmed, adding that (SAS)'s restructuring will not include a merger. "We are not in business to be taken over," he said.
December 2009: (SAS) Scandinavian Airlines said "It is time . . . to expand again" and announced the following new routes: 2x-daily, Copenhagen (CPH) - Vilnius starting January 11, and daily, (CPH) - Lyon, beginning April 6; daily Stockholm Arlanda (ARN) - Visby from June 6 to September 5; 6x-weekly, Oslo Gardermoen (OSL) - Bardufoss from May 31 to August 20. (SAS) also will add frequencies from (CPH) to (ARN), (OSL), Brussels, and Bologna.
737-783 (34548, LN-RNU), delivery. 737-883 (30467) to Moskovia (GAI) as (VQ-BDU).
January 2010: Allegiant Air (WJE) parent, Allegiant Travel Company signed an agreement to purchase 18 MD-80s from the downsizing (SAS) Group and will take delivery during the first half of this year. (WJE) currently operates 46 of the type, of which 42 are owned. By the end of 2011, it will place 13 of the 18 (SAS) airplanes (MD-82s/-83s) into operation. Along with two MD-82s/-83s bought from (SAS) in a separate transaction and scheduled for delivery in the current quarter, the 13 airplanes will satisfy "essentially all of Allegiant (WJE)'s currently expected airplane growth through the end of 2011," it said. (WJE) plans to operate at least 52 planes by year end and up to 60 by the end of 2011.
The remaining five airplanes, all MD-87s, will be used for spare parts and engines. (WJE) will pay cash for the planes. It said the cost of placing each MD-82/-83 into service, including purchase price, maintenance, upgrades and modifications, will be less than <$4 million.
"Our ability to acquire such highly reliable airplanes at attractive economics permits (WJE) to closely tailor our capacity to demand, a key element of our leisure-oriented business model. We believe these are clearly the best MD-80 airplanes available, having an unbeatable maintenance pedigree and being sister ships to 11 [former (SAS)] airplanes already in our fleet, thereby enhancing fleet commonality," (WJE) President & (CEO), Andrew Levy said. SkyWorks Leasing arranged the sale.
In the first nine months of 2009, Allegiant (WJE)'s passenger boardings climbed +28.3% to 3.8 million, while (RPM)s were up +28.9% to 3.42 billion and load factor rose +0.5 point to 90.5% LF. (WJE) earned a +$65.8 million profit during the period compared to a +$17.2 million surplus in the first nine months of 2008.
The MD-80s were removed from the (SAS) fleet as part of (SAS)'s restructuring program. It said the 18 airplanes were built between 1985 and 1991. Its fleet will comprise 191 airplanes following the transaction, including 24 MD-80s that will be "kept in (SAS) operation as inexpensive reliable airplanes, as well as airplanes to manage the seasonality effect in the Nordic region." (SAS) said (WJE)'s purchase will reduce the group's financial net debt by around -SEK200 million.
CL-600-2D24 (15250, LN-RNL), delivery.
February 2010: The (SAS) Group lost -SEK2.95 billion/-$400 million in 2009, improved +53.7% from the -SEK6.36 billion deficit suffered the year before, but the company felt additional cost cuts were necessary and extended its "Core SAS" cost reduction program by SEK2 billion to SEK7.3 billion.
The group has implemented two-thirds of the originally planned -SEK5.3 billion in cuts so far and reported a SEK2.2 billion benefit last year. It said it has signed a letter of intent (LOI) with unions representing flight deck (FC) and cabin crew (CA) identifying an additional SEK500 million and that it is planning a SEK5 billion rights issue, details of which will be announced on April 6. It also announced amended terms and extensions on certain loans.
"The unprecedented severity of the market downturn has been far worse than anticipated in the original "Core (SAS)" plan and has had an adverse impact on business (C) travel, affecting yields and thus our revenues and liquidity position," President & (CEO), Mats Jansson said.
"Core (SAS)" already has resulted in divestment of its stakes in Spanair (SPP), airBaltic (BAU) and bmi (BMA), disposal of 18 airplanes, closure of 45 routes and significant layoffs. The SEK2 billion extension will include an unspecified number of personnel reductions in administration and "production" areas, realizing -SEK650 million in savings, as well as salary freezes at Blue1 (BLF), Wideroe and (SAS) Cargo. It expects the majority of the SEK1 billion in costs associated with implementing the new cuts to be realized this year and said 2009 costs were "significantly higher than expected" due to the decline in travel demand, which in turn made subleasing grounded airplanes more difficult, and other factors.
Full-year revenue fell -15% to SEK44.92 billion and operating deficit deepened to SEK3.08 billion from SEK696 million in 2008, when the net loss was worse than last year's because of heavy one-time costs related to discontinued operations.
The (SAS) Scandinavian Airlines unit reported a -SEK2.86 billion operating loss, widened from a -SEK625 million deficit in 2008, while Blue1 (BLF)'s operating loss increased to -SEK204 million from -SEK13 million and Wideroe enjoyed a +3% increase in (EBIT) to SEK34 million.
The group had 240 airplanes in its fleet on December 31, comprising 172 in (SAS) livery, 30 with Wideroe, 13 with Blue1 and 25 leased out. Full-year passenger numbers declined -14.1% to 24.9 million and load factor was down -0.3 point to 70.9% LF on a -15.3% cut in capacity (ASK)s.
In the fourth quarter, (SAS) reported a -SEK1.3 billion loss that compared to a -SEK2.79 billion deficit in the three months ended December 31, 2008. The operating loss widened to -SEK1.42 billion from -SEK282 million.
The Swedish government intends to reduce its 21.4% stake in the (SAS) Group. Deputy Prime Minister, Maud Olofsson said, "We have previously said that we should reduce ownership in companies that operate in competitive markets and where there are no special reasons for continued ownership. (SAS) is one such company," the "Associated Press (AP)" reported from Stockholm. She said a divestiture would occur "at a suitable time" and that "in the long run, we don't see any intrinsic value in owning shares in an airline." The Danish and Norwegian governments each hold 14.3%. Sweden does plan to participate in the SEK5 billion/$696 million rights issue announced by (SAS). Its contribution would be approximately SEK1.1 billion, according to "Reuters."
March 2010: (SAS) Group airlines flew 1.68 billion (RPK)s traffic in February, down -3.1% year-over year, while capacity fell -10.2% to 2.52 billion (ASK)s. Load factor was up +5 points to 66.9% LF. (SAS) Scandinavian Airlines flew 1.55 billion (RPK)s, down -3.3%, against a -10.8% cut in capacity to 2.29 billion (ASK)s. Load factor rose +5.2 points to 67.7% LF.
(SAS) Group President & (CEO), Mats Jansson told "Dagens Nyheter" that the company likely will be sold to another airline once it recovers financially. "My understanding is that, after this crisis is over, (SAS) will be part of a structural deal," he said, according to "Reuters." "It is tough out there and there are obvious synergies and advantages to be had from being part of a bigger entity."
Two weeks ago the Swedish government said it intends to reduce its 21.4% share in the group, but right now Jansson said he is focused on completing the previously announced SEK5 billion/$695 million rights issue. (SAS) said it plans to unveil the subscription price on April 6, with the subscription period scheduled for April 15 to 29. The board will propose a reverse split in order to reduce the number of shares following the issue. "First we have to get the capital injection from shareholders and then get the cash flow positive again so that (SAS) will be an interesting object again," Jansson said. "From 2011 we will begin to show positive figures on the bottom line."
The (SAS) Group announced formal agreements with eight unions representing flight (FC) and cabin crew (CA) that will save the company around -SEK500 million/-$70.1 million per year and that satisfy "one of the conditions for participation by its major shareholders in the rights issue." (SAS) and the unions signed a letter of intent (LOI) in February and the governments of Denmark, Norway and Sweden were waiting on a final deal before committing to a +SEK5 billion capital increase. (SAS) said it now has achieved -SEK7.8 billion in savings under the Core (SAS) program.
The Norwegian Court of Appeal upheld and increased a 2008 judgment against the (SAS) Group, which now must pay damages of NOK160 million/$27.3 million to Norwegian (NWG), plus nearly NOK15 million in court costs, to settle an industrial espionage case regarding (SAS)'s improper use of data in (NWG)'s reservation system. The original ruling was for NOK132 million in damages plus court costs. Norwegian (NWG) said it lost "several hundred million" kroner as a result of the breach. (SAS) said the decision will affect its results and liquidity by some SEK200 million/$28.2 million and that it "will now examine the ruling further to evaluate whether it should be appealed" to the Supreme Court of Norway.
Took its final 737-783 34549, LN-RNW) delivery and now has an empty order book.
April 2010: Volcanic ash from the Eyjafjallajokull volcano eruption on Wednesday April 14th in south-eastern Iceland caused dramatic disruption to air traffic in Europe, with many airlines cancelling services throughout the following five days owing to airspace closures but questioning whether European Union (EU) governments and Air Traffic Control (ATC) providers were overreacting.
Severe restrictions on civil flights across most of northern and central Europe remained in place until over the following weekend. This included airspace over Austria, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, most of France, most of Germany, Hungary, Ireland, northern Italy, the Netherlands, Norway, Poland, Romania, Serbia, Slovenia, Slovakia, Sweden, Switzerland, Ukraine, and the UK. In some areas, upper airspace was made available for limited flights. But rather than easing, the restrictions spread on Sunday April 18: 11 airports in Spain closed as did Bulgarian airspace.
(IATA) (ITA)'s "initial and conservative" estimate of the financial impact on the airline industry is at least $200 million per day in lost revenue. It added that carriers would incur further costs for rerouting airplanes, maintaining parked airplanes at various airports and providing care for stranded passengers. The Association of European Airlines (AEA) said 63,000 flights were cancelled over four days.
The (AEA) and Airports Council International Europe jointly called for an "immediate reassessment of flight restrictions," asserting that non-passenger test flights conducted by several European airlines "have revealed no irregularities at all." The organizations questioned the "proportionality of the flight restrictions currently imposed."
(KLM) and Lufthansa (DLH) were among the carriers that performed test flights over the following weekend. (KLM) operated one on Saturday and was scheduled to operate +9 more later. The technical inspection conducted after Saturday's 737-800 flight, which climbed to an altitude of 41,000 ft, "revealed that no problems had been encountered and that the quality of the atmosphere is in order," (KLM) said. (KLM) President & (CEO), Peter Hartman estimated the combined financial impact of lost revenue and costs for stranded passengers at €5 million/$6.8 million - €10 million daily. "This is rather dramatic," he told Dutch media. He confirmed that (KLM) does not have insurance that covers this event.
(SAS) warned it would lay off up to -2,500 employees temporarily in Norway, if airplanes remained grounded. It later announced that nearly all of its flights would be cancelled, though it did say "a few domestic flights" would operate in Norway.
Several European carriers, including Finnair (FIN) and Lufthansa (DLH), grounded their entire fleets. Ryanair (RYR) said it had cancelled all scheduled flights to/from the UK, Ireland, Denmark, Finland, Norway, Sweden, Belgium, the Netherlands, France, Germany, Poland, and the Baltic States.
Eurocontrol said there were 10,400 flights in European airspace two days after the eruption compared to 28,000 normally and approximately 5,000 on the Saturday April 17 compared to 22,000 on a normal Saturday.
The situation forced airlines in North America and Asia to cancel a high percentage of their Europe-bound flights. The USA Air Transport Association (ATA) said USA carriers cancelled 282 of 337 scheduled Saturday April 17 transatlantic flights. Meanwhile, hundreds of thousands of passengers were stranded at airports across Asia over the weekend as airlines in the region halted nearly all flights to Europe, though some to southern Europe were still operating.
SEE ATTACHED "AIRLINER WORLD" MAGAZINE ARTICLE ON THE VOLCANO ERUPTION IN ICELANDAIR (ICE) - - "ICE-2010-04-VOLCANO ERUPTION-A/B/C/D/E."
SEE ATTACHED - - "SAS-2010-04-VOLCANIC ERUPTION."
June 2010: (SAS) Group airlines flew 2.38 billion (RPK)s traffic in May, up +4% year-over-year, while capacity fell -1.6% to 3.15 billion (ASK)s. Load factor was up +4.1 points to 75.6% LF. (SAS) Scandinavian Airlines flew 2.17 billion (RPK)s, up +3%, against a -3.1% cut in capacity to 2.84 billion (ASK)s. Load factor rose +4.5 points to 76.5% LF.
In the latest step in its Core (SAS) program to "focus on the Nordic home markets," the (SAS) Group announced it reached an "agreement in principle" to sell nearly all of its 49% holding in Estonian Air (ENA) to the Estonian government.
Under a deal recently announced, the government will provide approximately SEK205 million/$26.3 million of new capital to (SAS) via a rights issue and (SAS) will convert approximately SEK20 million in loans into new equity.
After the rights issue, (SAS) will continue to hold 10% of (ENA), with the Estonian state holding 90%. Estonian (ENA) has an option to buy out (SAS)'s remaining stake and (SAS) has the option to sell its stake "at fair market value" after four years. The two carriers will continue their commercial cooperation, (SAS) said. (SAS) also will hold around SEK70 million in Estonian debt maturing in 2014.
(SAS) acquired its stake in 2003 at a time when it was in an expansionist mode. (SAS) also at one time held a significant stake in Riga-based airBaltic (BAU) that it divested in early 2009. Estonian Air (ENA) operates four 737 Classics and two Saab 340s.
July 2010: The (SAS) Group airlines operated 2.53 billion (RPK)s traffic in June, up +0.4%, against a -3.3% cut in capacity to 3.18 billion (ASK)s. Load factor rose +3 points to 79.7% LF. (SAS) Scandinavian Airlines flew 2.29 billion (RPK)s, down -1.1%, against a -5.1% fall in (ASK)s to 2.86 billion. Load factor rose +3.3 points to 80.4% LF.
737-883 (28323, OY-CIS) returned from lease to Air Europa (ARE).
August 2010: (SAS) Scandinavian Airlines will launch weekly, London Heathrow - Lulea service aboard a 737-600 from November 6.
The (SAS) Group's -SEK502 million/-$68.6 million second quarter net loss, more than halving its -SEK1.05 billion loss in the year-ago period, was attributable to the volcanic-ash-related airspace closures in April that cost it -SEK790 million in lost revenue
(SAS) said it would have earned a second quarter net profit of +SEK464 million absent the airspace closures. "The ash cloud and the subsequent closure of airspace had a significant impact on net income for the second quarter and greatly affected our customers," said CEO, Matts Jansson, who recently announced his intention to step down this fall. He said the company will be "well positioned to face the future" following his exit owning in part to the "Core (SAS)" cost reduction program that has achieved -SEK5.6 billion in annual savings in the year and half it has been in effect.
He asserted that (SAS) must stay focused on cost control going forward: "We are experiencing intense competition, which entails continued pressure on yields. It is now vital that we continue our efforts to cut costs." He said that during the first six months of 2010, "we lowered unit cost by -6.7%, despite reduced capacity and the [volcanic-ash-related] major disruptions to services."
Second quarter revenue lowered -18.3% to SEK9.98 billion, while operating loss was -SEK349 million, narrowed from a -SEK942 million deficit in the year-ago period.
(SAS) Scandinavian Airlines posted a second quarter operating loss of -SEK74 million, narrowed from a -SEK941 million operating deficit in the year-ago period, on a -18.6% decline in revenue to SEK8.73 billion. Blue1 (BLF)'s second quarter revenue fell -10% to SEK459 million, while Wideroe generated SEK845 million in revenue for the period, down -3.4%.
Consolidated passenger traffic for the three months ended June 30 fell -6.3% to 6.61 billion (RPK)s traffic on an 8.5% cut in capacity to 8.77 billion (ASK)s, producing a load factor of 75.4% LF, up +1.8 points.
(SAS) Group's fleet totaled 239 airplanes as of June 30 including 168 operated by (SAS) Scandinavian. Its mixed fleet is led by 67 737NGs.
The (SAS) Group has started its search for a new (CEO) after (CEO), Mats Jansson announced his intention to step down before the end of the year. “The time feels right for a new President & (CEO) to take over and continue to further strengthen (SAS)'s competitiveness and secure its profitable growth,” Jansson said.
The 59-year-old took over his current position from Joergen Lindegaard four years ago. Lindegaard had primarily focused on cost-cutting measures within the given group structure of (SAS). Jansson went one step further and decided that the heavily unprofitable airline needed to divest subsidiaries that were beyond its core market. (SAS) sold Spanair (SPP) and its minority stake in BMI (BMA), among others, and focused on its home market in Scandinavia. While it was beneficial for (SAS) to get rid of the financial burdens the affiliated airlines represented, Jansson was forced to launch another deep cost-cutting program that included laying off 4,600 employees and reducing expenses by -7.8 billion kronor/$1.09 billion. In the first quarter of 2010, (SAS) still lost -$135 million, a result that was not substantially improved from last year.
“There are still great challenges to come for (SAS), but the platform is in place. The Core (SAS) strategy, including extensive cost-savings, has been established, the financial platform has been secured through the latest rights issue, (SAS) has gained strength in terms of our products, and customer satisfaction has increased,” Jansson says. “(SAS) is now well positioned to face the future." The way the (SAS) statement is written indicates that it was Jansson’s decision to leave. That move is also understood as a signal to the market that (SAS) is now preparing to be sold to a strategic investor. (SAS) is 50% owned by the governments of Sweden, Denmark, and Norway. As (SAS)'s losses mounted and pressure on federal budgets became greater in the past few years, the willingness to dispose of the national carrier increased as well. The Swedish government said earlier this year that it would like to sell its 21.4% stake. Jansson himself has never ruled out a sale, but stressed that (SAS) needed to complete its financial turnaround before a sale would be possible and that it would make sense to sell to or merge with another airline. During the past financial and economic crisis, it also would have been tough to find another airline — most likely Lufthansa (DLH) or Air France (AFA)/(KLM) — that would have been prepared to buy. - Jens Flottau, email@example.com
(SAS) said it is "phasing out" all of its MD-90s and has entered into 5-year leases covering its eight MD-90s with an undisclosed USA airline. The eight MD-90s will be delivered starting in the 2010 third quarter and ending in the 2011 second quarter. The average age of the (SAS) MD-90s is 13.5 yrs. (SAS) took delivery of its first MD-90 in 1996. "The MD-90 has been a niche airplane in the (SAS) Group fleet and this transaction fits very well in to (SAS)'s initiative to simplify and standardize its fleet and thereby reduce the number of airplane types used in its total fleet," (SAS) said.
September 2010: The (SAS) Group airlines flew 2.39 billion (RPK)s traffic in August, a +7% increase over the year-ago month. Capacity climbed +4.2% to 3.07 billion (ASK)s, lifting load factor +2 points to 78.2% LF. Scandinavian Airlines (SAS) flew 2.19 billion (RPK)s, a +6.5% increase, against a +3.4% rise in capacity to 2.76 billion (ASK)s. Load factor rose +2.3 points to 79.3% LF.
(SAS) and Estonian Air (ENA) reached a code share agreement under which (ENA) will place its code on (SAS)'s daily, Stockholm - Vilnius service beginning October 31.
The (SAS) Group announced it reached a final agreement that will result in (SAS) divesting its 49% stake in Tallinn-based Estonian Air (ENA) to the Estonian government. Under a deal recently announced, the Estonian government will provide approximately SEK200 million/$28.3 million in a new rights issue and (SAS) will convert approximately SEK20 million in loans into equity.
After the rights issue, the Estonian state will hold 90% and (SAS) 10%. (SAS) will remain the lender of approximately SEK70 million in loans with a maturity date in 2014. (ENA) will have an option to buy (SAS)'s remaining stake and (SAS) has the option to sell its stake at fair market value after four years.
The transaction is conditional upon Estonia parliamentary approval and is neutral to profit and liquidity of the (SAS) Group. The two carriers will continue their commercial cooperation, (SAS) said.
(SAS)'s board of directors named Rickard Gustafson as (SAS)'s new President & (CEO). Gustafson, 46, will replace Mats Jansson, who will step down on October 1. "Rickard Gustafson is an experienced leader with extensive international experience, who has demonstrated that he can generate good results. The entire board agrees that Gustafson is the right person to take on the challenges in (SAS), to continue the implementation of the "Core (SAS)" strategy and ensure profitable growth," said (SAS) Chairman, Fritz Schur.
Gustafson currently heads insurance firm, Trygg-Hansa/Codan and received his Engineering degree, with a focus on industrial economy, from the Institute of Technology at Linkoping University.
"(SAS) is a special and unique Scandinavian company. A great deal has been accomplished in recent years to create a platform for the future. I look forward to developing the company further, together with all employees at (SAS)," said Gustafson. He will take up his new post by March 2011. In the interim, Deputy (CEO) John Dueholm will serve as acting President & (CEO).
(SAS) Cargo entered into an agreement to settle three class action lawsuits filed in the USA involving alleged price-fixing in the air cargo industry. In a statement, (SAS) said that, subject to court approval, it will pay a total of approximately SEK105 Million/$14.4 million covering the settlement and notice costs. In exchange, it is released "from all damage claims from customers that purchased air cargo shipping services directly from (SAS) Cargo to, from and within the USA between 2000 and 2006." (SAS) said the SEK105 million will have an adverse effect on liquidity and earnings for the third quarter ended September 30.
October 2010: Scandinavian Airlines (SAS) will launch daily, Oslo Gardermoen – Newark service March 27 on board a three-class A330-300 (Business Class, Economy Extra and Economy) and 5x-weekly, Copenhagen – Shanghai Pudong on October 31 aboard a 3-class A340-300.
(SAS) said the Supreme Court of Norway ordered it to pay NOK160 million/$27.4 million to Norwegian Air Shuttle (NWG), likely bringing to a conclusion the corporate espionage case in which (SAS) Norge (BRT) was found to have improperly accessed and used data in Norwegian (NWG)'s reservation system. Earlier this year, a Norwegian appeals court upheld a 2008 ruling against (SAS) in the matter, but (SAS) extended the case by appealing to the Supreme Court, which rejected the appeal.
Norwegian (NWG) has claimed that throughout 2003 and 2004 and most of 2005, (SAS) Norge (BRT) (then called (SAS) Braathens (BRT)) had access to its Amadeus electronic reservation system at a level of detail to which (SAS) was not entitled. (SAS) was acquitted in a criminal trial, but the civil case carried on with Norwegian claiming substantial financial damage. Including court costs, (SAS) said the case will negatively affect its third quarter earnings by -SEK200 million/-$29.7 million.
November 2010: (SAS) Group airlines operated 2.50 billion (RPK)s traffic in October, up +8.2% from the year-ago month, on a +6.5% increase in capacity to 3.32 billion (ASK)s. Load factor rose +1.2 points to 75.5% LF. Scandinavian Airlines (SAS) flew 2.28 billion (RPK)s, a +7.1% increase, against a +5.2% jump in capacity to 2.97 billion (ASK)s. Load factor rose +1.4 points to 76.7% LF.
The (SAS) Group reported a third-quarter net loss of -SEK1.05 billion/-$156.7 million, reversed from a +SEK152 million profit in the year-ago period. The results were negatively affected by the European Commission (EC)’s SEK660 million air cargo price-fixing fine as well as the NOK160 million the group was ordered to pay to Norwegian Air Shuttle (NWG) in a corporate espionage case, (SAS) said in a statement.
Third-quarter revenue fell -3.5% to SEK10.69 billion and operating loss was -SEK488 million, reversed from a +SEK259 million operating profit in the year-ago period. Acting President & (CEO) John Dueholm said that the group “was charged with several significant non-recurring items due to events and decisions that were not directly attributable to the quarter. The effects were largely anticipated and the group's financial preparedness has been adapted to manage these.” But, he noted, “By now putting these events behind us, we can channel our energy on looking to the future and fully focusing on our core operations.”
Scandinavian Airlines (SAS) posted a 3rd-quarter operating loss of -SEK221 million, narrowed from a -SEK531 million loss in the 3rd quarter of 2009. Revenue fell -34% to SEK9.4 billion.
Blue1 (BLF) had an operating loss of -SEK15 million, narrowed from -SEK34 million last year. Wideroe had an operating profit of +SEK116 million, up +56.8% from +SEK74 million in 2009.
Group traffic rose +5.4% to 7.24 billion (RPK)s on a +2.5% increase in capacity to 9.18 billion (ASK)s, producing a load factor of 78.9% LF, up +2.2 points.
Looking forward, Dueholm noted that as the positive market trend is “expected to continue” (SAS) is launching “initiatives aimed at profitable growth, which include higher frequency on existing routes and the opening of the intercontinental routes Oslo - New York and Copenhagen - Shanghai."
(SAS) and Icelandair (ICE) reached a code share agreement effective November 8 under which the carriers will operate service beyond (SAS)'s Copenhagen and Stockholm hubs to Berlin, Gothenburg, Hamburg, Milan, Munich, Vilnius, Zurich, and Warsaw. (SAS) and Singapore Airlines (SIA) reached a code share agreement, effective December 1, under which (SAS) will place its (SK) code on (SIA)'s Copenhagen - Singapore and Singapore - Bangkok routes. (SIA) will place its code on (SIA) flights from Copenhagen to Helsinki, Oslo and Stockholm.
The European Commission (EC) fined 11 airlines a total of €799 million/$1.1 billion for "operating a worldwide cartel which affected cargo services within the European Economic Area." In a statement, the (EC) said the carriers "coordinated their action on surcharges for fuel and security without discounts over a 6-year period." Air France (AFA) received the largest fine at €182.9 million, followed by its affiliate (KLM) at €127.2 million. Other fines include British Airways (BAB) (€104 million), Cargolux (CLX) (€79.9 million), Singapore Airlines (SIA) (€74.8 million), (SAS) (€70.2 million), Cathay Pacific Airways (CAT) (€57.1 million), Japan Airlines (JAL) (€35.7 million), Martinair (MTH) (€29.5 million), Air Canada (ACN) (€21 million), Qantas (QAN) (€8.9 million) and (LAN) Airlines (€8.2 million).
Lufthansa (DLH) and its subsidiary Swiss International Air Lines (CSR) "received full immunity from fines under the (EC)’s leniency program, as it was the first to provide information about the cartel," the (EC) stated.
"It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers," said (EC) VP Competition, Joaquin Almunia. "With today’s decision, the (EC) is sending a clear message that it will not tolerate cartel behavior." The (EC) charged that the "cartel members" coordinated pricing from December 1999 to February 2006.
The (EC) in late 2007 sent out official statements of objections to as many as 25 carriers regarding cargo price fixing. It said that 11 carriers originally charged were not fined.
The (EU), USA Department of Justice, Australian Competition and Consumer Commission and other authorities worldwide have been investigating anti-competitive practices in air cargo since 2005. Cargolux (CLX) President & (CEO) Ulrich Ogiermann and Senior VP Sales & Marketing Robert Van de Weg were recently indicted in a USA court on charges of conspiring to fix and coordinate certain surcharge rates on air cargo shipments to and from the USA.
In a statement, Air France (AFA)/(KLM) said it considered the level of the fine to be "disproportionate given the fact that the economic analysis demonstrated that the actions in question had no detrimental effect on the freight shippers or the freight forwarders. Moreover, the level of the fines disregards the economic hardship that the air cargo industry has suffered, and will have a distortive effect on the level playing field." It added that it intends to appeal the decision to (EU) courts. Because the level of the fine exceeds the level of provisions already taken by the company for potential cargo antitrust payments, (AFA)/(KLM) will book a charge of €127 million for the first half of its current fiscal year.
(SAS) said it has not been involved in a global cartel and the fines are disproportionate. It also plans to appeal the decision, a process that could take several years. The fines will be accounted for in (SAS)'s third-quarter earnings.
Air Canada (ACN) said it may appeal the decision and said the penalty is “more than adequately” covered by a C$125 million provision it made in 2008. "We are highly disappointed and strongly contest the considerable level of the fines, which we believe to be disproportionate to (SAS) Cargo's actions," said (SAS) Chief Legal Officer, Mats Loennkvist. "We have cooperated fully with the (EC) during the entire investigation and, for slightly >4 years, we have disputed the (EC)'s view that (SAS) Cargo has been involved in a global cartel."
December 2010: (SAS) announced incoming President & (CEO), Rickard Gustafson will take over the position on February 1, 2011. It previously had been announced that he would take over no later than March 1. Outgoing President & (CEO) Mats Jansson left the position October 1 and Deputy (CEO) John Dueholm will continue as acting President & (CEO) until February 1, 2011.
(SAS) Scandinavian Airlines and Egyptair (EGP) reached a code share agreement on routes to Brussels, Gothenburg, Oslo, and Stockholm Arlanda, under which (EGP) will place its code on (SAS) flights from Copenhagen connecting to Cairo, effective December 15.
January 2011: Scandinavian Airlines System (SAS) has won the 2010 best "Arrival Performance among Major European Airlines" award given by http://www.FlightStats.com. (SAS) achieved a 2010 on-time performance record of 86.47%. The average on-time performance was 73.78% for this category which includes airlines based in Europe and operating at least 30,000 annual scheduled flights within Europe.
February 2011: (SAS) Group Airlines operated 1.72 billion (RPK)s traffic in January, up +5.4% from the year-ago month, on a +8.2% rise in capacity to 2.69 billion (ASK)s. Load factor fell -1.7 points to 63.9% LF.
Scandinavian Airlines (SAS) flew 1.57 billion (RPK)s traffic, a +4.2% increase, against a +6.9% jump in capacity to 2.42 billion (ASK)s. Load factor fell -1.7 points to 64.9% LF.
The (SAS) Group incurred a net loss of -SEK2.22 billion/-$335.4 million for 2010, narrowed from a -SEK2.95 billion deficit in 2009, but swung to a +SEK47 million 4th-quarter profit, turned around from a -SEK1.3 billion net loss in the prior-year period. "The year 2010 was an eventful one in which we tackled several major challenges, both expected and unexpected," President & (CEO) Rickard Gustafson said. He cited "substantial nonrecurring items that were charged to earnings" including the European Commission (EC)'s SEK660 million air cargo price-fixing fine, NOK160 million/$27.8 million the group was ordered to pay to Norwegian Air Shuttle (NWG) in a corporate espionage case and about SEK700 million in lost revenue owing to last April's volcanic ash crisis in Europe.
He claimed that "favorable conditions are in place" absent "unexpected events" to allow (SAS) to "achieve positive income before tax for the full-year 2011."
The (SAS) Group's full-year revenue declined -9.3% year-over-year to SEK40.72 billion and operating loss narrowed -37% to -SEK3.08 billion. Full-year consolidated traffic rose +1.9% to 25.71 billion (RPK)s on a -2.6% drop in capacity to 34.66 billion (ASK)s, producing a load factor of 74.2% LF, up +3.3 points.
(SAS) will launch 4x-weekly, Moscow Sheremetyevo - Oslo Gardermoen service March 27, 6x-weekly, Munich - Oslo service March 28, and will operate seasonal service to Oslo from Madrid (weekly, June 28 to August 16), Palma de Mallorca (3x-weekly, June 26 - August 14) and Split (2x-weekly, June 27 - August 12).
(SAS) announced that (CFO) Mats Lonnqvist, who joined (SAS) in December 2008, is leaving. He will be succeeded in March by Goran Jansson, who also will take on the position of Deputy President of (SAS). Lonnqvist will continue until April 1 "to ensure efficient handover of assignments and responsibilities,” (SAS) said. "I was recruited for a specific assignment, which is now about to be concluded," Lonnqvist stated. "(SAS)' financial platform is secure and at the presentation of results for 2010, we were able to report that our underlying operation is now profitable and there are prerequisites for achieving a positive result in 2011. Consequently, I believe it's natural to hand over now that (SAS) is moving into a new phase."
As does new President & (CEO) Rickard Gustafson; Jansson, 52, comes from outside the airline industry. "He has solid commercial experience from management assignments in international companies, including (CFO) & Deputy (CEO) of [door lock and security systems maker] Assa Abloy for nearly 10 years."
April 2011: (SAS) Scandinavian Airlines, along with Star (SAL) Alliance partners Lufthansa (DLH), Swiss (CSR) and Austrian Airlines (AUL), said it has again won the Swedish government's procurement of air travel, in a contract carried out by Swedish Armed Forces Logistics (FMLOG). The agreement is worth a total of SEK700 million/$111.6 million.
The (SAS) Group said it will lease 5 new 737-800NGs from (GECAS) (GEF) and signed a Memo of Understanding (MOU) to lease a further 12 737-700s from the same company as it phases out its remaining 9 MD-80s and 11 737 Classics at its Stockholm and Oslo hubs, where it also operates 67 737NGs.
(SAS) additionally said it will retire its 17 MD-80s at Copenhagen airport (COP), replacing them with A320s. (SAS) already bases 12 A320s at (COP). The replacement will begin in 2012 and is expected to be completed by 2016, it noted. According to (SAS), the lease arrangements mean that “there will be limited airplane investments” this year. President & (CEO) Rickard Gustafson said the fleet renewal “will reduce complexity and improve out environmental performance.”
May 2011: The (SAS) Group reported a 1st-quarter net loss of -SEK373 million/-$59.6 million, narrowed from a -SEK712 million net deficit in the year-ago period. Despite the loss, (SAS) maintained its guidance for a full-year pre-tax profit, but it cautioned that achieving the result has become "significantly more challenging" owing to "the recent sharp increases in jet fuel prices."
It added, "The future bookings situation appears relatively favorable and provided that fuel surcharges increasingly offset the higher jet-fuel prices in the second half of 2011, there are good prospects for the (SAS) Group to achieve positive income before tax for the full-year 2011." 1st-quarter pre-tax loss was -SEK554 million, narrowed from a pre-tax loss of -SEK972 million in the 2010 March quarter.
President & (CEO) Rickard Gustafson, who assumed his post on February 1, stated, "The 1st quarter of 2011 was a quarter dominated by continued economic recovery and the favorable economic trend is expected to continue in 2011, particularly in the (SAS) Group's home market. Growth is expected to be strongest in Sweden and Norway, but lower in the euro countries. Overcapacity remains in certain markets, particularly on European routes from Denmark and in the Swedish market."
First-quarter revenue fell -2.8% to SEK9.22 billion and operating loss was -SEK407 million, narrowed from an operating deficit of -SEK762 million in the year-ago period. The (SAS) Group's 1st-quarter consolidated scheduled passenger traffic increased +3.4% year-over-year to 5.66 billion (RPK)s on a +7.3% lift in capacity to 8.53 billion (ASK)s, producing a load factor of 66.3% LF, down -2.5 points.
(SAS) Scandinavian Airlines posted a 1st-quarter operating loss of -SEK327 million, narrowed from an operating deficit of -SEK661 million in the year-ago period, on a -4% drop in revenue to SEK8.09 billion.
As of March 31, the (SAS) Group operated an in-service fleet of 192 airplanes led by 65 737NGs.
(SAS) announced it signed a letter of intent (LOI) with Singapore Airlines (SIA) to further develop and enhance their partnership. “This may cover additional code share flights, as well as network cooperation on potential new sectors between Scandinavia and Singapore (SIN),” (SAS) said. (SAS) and (SIA) entered into a code share agreement in December 2010, under which (SAS) added its SK code to (SIA)-operated flights between Copenhagen (CPH) and (SIN), and selected flights between (SIN) and Bangkok. The SQ prefix was added to (SAS)-operated flights from (CPH) to Helsinki, Oslo and Stockholm.
Scandinavian Airlines (SAS) and Star (SAL) Alliance partner All Nippon Airways (ANA) reached a code share agreement under which (SAS) will place its code on (ANA) Tokyo Narita (NRT) service to Sapporo, Osaka Itami, and Fukuoka, effective May 23. (ANA) will place its code on (SAS) (NRT) - Copenhagen (CPH) service, and will “at a later stage” put its code on (SAS) flights from London Heathrow to (CPH), Oslo (OSL) and Stockholm Arlanda (ARN); Frankfurt to (CPH), (OSL) and (ARN); and from Munich to (CPH) and (OSL).
Scandinavian Airline (SAS) Systems appointed "Discover the World Marketing" to serve as its General Sales Agent (GSA) in Portugal. It already represents (SAS) in Brazil, Mexico, and South Africa.
June 2011: Scandinavian Airlines (SAS) will relaunch 5x-weekly, A340-300 Copenhagen - Shanghai Pudong service on March 1, 2012. The (SAS) Group announced it will close "a number" of European destinations, as well as make capacity adjustments on Finnish domestic routes. It will also launch Tampere - Copenhagen service.
Spirit AeroSystems signed an agreement with Scandinavian Airlines (SAS) to supply spare parts for (SAS)’s fleet of 737 airplanes.
At the Paris Air Show, (SAS) ordered 30 A320neo and 11 options, powered by (CFM)'s (Leap-X1A) engines. (SAS) is in the process of harmonising its fleet and is replacing its Copenhagen-based MD-80s with leased A320s. These in turn will be replaced by the A320neos from the 2nd half of 2016. Final delivery will be in 2019.
SEE ATTACHED - - "SAS-2011-06-AIRBUS TRANSITION."
Gate Gourmet extended its contract with (SAS), covering catering and provisioning services at (SAS)'s three main hubs in Copenhagen, Stockholm/Arlanda and Oslo, as well as other locations in Scandinavia, for an additional two years to 2016. They reached a 5-year extension of an existing agreement covering catering services at >15 locations worldwide, now expiring in 2016.
July 2011: (SAS) Scandinavian Airlines will launch 5x-weekly, London Heathrow - Copenhagen - Shanghai A340-300 service on March 1, 2012. (SAS) this fall expects to launch Stockholm Arlanda - Gdansk service on October 30, as well as Oslo Gardermoen - Palanga (October 31), and Copenhangen - Palma de Mallorca (September 3). It will increase its frequencies on Stockholm service to Milan as well as on Copenhagen service to Ponzan and Wroclaw.
Scandinavian Airlines (SAS) and Aegean Airlines (CRM) reached a code share agreement, under which (SAS) will place its code on A3 flights from Athens (ATH) to Chania, Heraklion, Kos, Larnaca and Rhodes, as well as between (ATH) and Brussels, London Heathrow (LHR), Milan Malpensa (MXP), Paris (CDG), and Rome Fiumicino (FCO). In return, the A3 prefix will be placed on (SAS) flights between Copenhagen (CPH) and (ATH) as well as flights between (CPH)/Oslo/Stockholm Arlanda and Brussels, (LHR), (MXP), (CDG) and (FCO).
September 2011: (SAS) Group President & (CEO), Rickard Gustafson announced a new strategy, "(SAS) 4Excellence" aimed at reducing costs by -3% to -5% annually until 2015 and returning (SAS) to profitability.
The "4Excellence" program focuses on achieving excellence in 4 areas (commercial, sales, operations and people), which (SAS) said will be attained by “continued cost reductions” and a “strengthened focus on productivity improvements." It is also restructuring its group management.
Last month, (SAS) swung to a 2nd-quarter pre-tax profit of +SEK729 million/+$114 million against a loss of -SEK600 million in the year-ago period, its “best 2nd quarter since 2008 and a result of cost-savings measures,” it said.
Its previous strategy "Core (SAS)," (in which the group focused on the Nordic region as well as its home market) has enabled the airline to reduce unit costs by -23% since 2008. In June, (SAS) announced Finnish subsidiary Blue 1 (BLF) will phase out its remaining 5 Avro RJ-85 airplanes and focus on operating 717s, resulting in a maximum of -85 job redundancies at (BLF).
(SAS) said it will maintain its position as the 1st-hand choice for business (C) travelers, but will expand its offerings to strengthen its market share within the leisure travel segment.
"(SAS) is to be the preferred choice for Nordic travelers, whatever the purpose of their journey,” said Gustafson, noting (SAS) wants to offer an “even better and more harmonized service, including economy extra on domestic routes in Scandinavia.”
(SAS) also said it has changed from a holding structure with several subsidiaries to become 1 functionally organized airline.
October 2011: (SAS) Scandinavian Airlines will launch 21 new destinations beginning with the 2012 summer schedule.
(SAS) has given no details on which routes will be added, but said it will also increase frequencies on its key Norwegian domestic routes.
The changes will be part of the (SAS) Group’s new "4Excellence" program that aims to cut annual costs by -3% to -5%. "We expect a large proportion of the growth in the industry to come from leisure passengers," (CEO) Rickard Gustafson said. "At the same time, we will make even more efficient use of our airplanes. All in all, this is an offensive initiative that will create profitable growth that benefits both the customer and (SAS)."
(SAS) will launch 2x-weekly, Manchester - Bergen service on January 6, replacing its London Gatwick - Bergen service, which will cease on November 1.
(SAS) Scandinavian Airlines named (RSA) Scandinavia (COO), Joakim Landholm as a Head of Commercial. Landholm will also be a member of (SAS)'s group management team.
December 2011: (SAS) Scandinavian Airlines has secured a 5-year refinancing deal for 4 A321s worth $74 million, through Deutsche VerkehrsBank AG. The transaction is part of (SAS)’s ongoing airplane refinancing program where loans maturing in 2011/2012 are to be renewed. The financing of 2 airplanes will close in the 4th quarter of 2011 and the remaining 2 will close in the 3rd and 4th quarter of 2012.
January 2012: (SAS) Scandinavian Airlines and Singapore Airlines (SIA) have signed a Memo of Understanding (MOU) with the aim of entering a joint venture (JV) to introduce Stockholm Arlanda – Singapore (SIN) (SIA)-operated service, as well as to increase frequencies on the 3x-weekly, Copenhagen - (SIN) route, depending on market conditions. The (JV) is subject to regulatory approval and includes coordination of flight schedules as well joint sales activities.
(SAS) has announced a wide range of new routes, mainly with a leisure focus:
Bergen - Barcelona: weekly seasonal 737-700 service between June 28 and August 2;
Bergen - Malaga: 2x weekly seasonal 737-700 service between June 23 and August 11;
Bergen - Manchester: 2x weekly 737-500 service starting on January 6 * SEE BELOW;
Bergen - Palma de Mallorca: weekly seasonal B737-700 service between June 29 and August 10;
Bergen - Split: weekly seasonal 737-700 service between June 25 and August 13;
Copenhagen Kastrup - Dubrovnik: 2x-weekly seasonal A319-100/MD-82 service starting on July 4;
Copenhagen Kastrup - Kaliningrad: 4x-weekly CRJ-200/CRJ-900 service starting on March 25;
Copenhagen Kastrup - Katowice: 4x-weekly CRJ-200/CRJ-900 service starting on March 26;
Copenhagen Kastrup - Malaga: up to 3x-weekly seasonal A319-100/A321-200/MD-82 service starting on March 31;
Copenhagen Kastrup - Split: up to 3x-weekly seasonal CRJ-900/MD-82/MD-87 service starting on March 31;
Oslo Gardermoen - Antalya: weekly seasonal 737-700 service between July 1 and August 12;
Oslo Gardermoen - Faro: 2x-weekly seasonal 737-700 service between June 26 and August 10;
Oslo Gardermoen - Gazipasa: 2x-weekly seasonal 737-700 service between July 3 and August 16;
Stavanger - Barcelona: weekly seasonal 737-700 service between June 28 and August 2;
Stavanger - Nice: weekly seasonal 737-700 service between June 24 and August 12;
Stavanger - Palma de Mallorca: weekly seasonal 737-700 service between June 29 and August 10;
Stavanger - Split: weekly seasonal 737-700 service between June 25 and August 13;
Stockholm Arlanda - Alicante: 3x-weekly seasonal 737-700/-800 service starting on June 26;
Stockholm Arlanda - Barcelona: 3x-weekly 737-700/-800 service starting on March 30;
Stockholm Arlanda - Dubrovnik: up to 3x-weekly 737-600/-800/MD-82 service starting on March 29;
Stockholm Arlanda - Malaga: up to 4x-weekly 737-800 service starting on March 31;
Stockholm Arlanda - Reykjavik Keflavik: 4x-weekly seasonal 737-700 service starting on June 22.
It has temporarily suspended its Oslo Gardermoen - Milan Malpensa route for the winter season. (SAS) has also terminated its Bergen - London Gatwick services on November 1. It will give up its Stockholm Arlanda - Munich route on March 24 in favor of the code share services operated by Lufthansa (DLH) on the route and not resume seasonal services from both Oslo Gardermoen and Stockholm Arlanda to Madrid next summer.
* (SAS) rearranged its UK network out of Bergen (BGO) in western Norway on 6 January when the pan-Scandinavian national carrier dropped its route to London Gatwick, which faced direct competition from Norwegian (NWG), and instead now serves Manchester (MAN) in northern England. The route was last operated by (NWG) in 2006 - 2007 and prior to that, by (SAS)’ regional subsidiary, Wideroe 2003 - 2004.
(SAS) will lay off -300 administrative staff as part of its "4Excellence" program aiming to cut annual costs by -3% to -5%. According to (SAS), these cost-cutting measures will reduce expenses by -SEK2 billion/-$288 million) for 2012. (SAS) maintains its forecast of a marginally positive financial result for 2011. However, implementing 4Excellence has become even more crucial in 2012 due to increased economic uncertainty, increased pressure on yields in the airline industry and continued high fuel prices.
"It is critical in order to strengthen our competitive position that we reach the targeted unit cost reduction of -3% to -5% annually,” President & (CEO) Rickard Gustafson said. “Regretfully, that will mean that good and loyal employees will be leaving (SAS) but I am convinced that these measures are necessary. With the loyalty and commitment that we have in (SAS), we will now concentrate our efforts to secure our long-term competitiveness," he said.
February 2012: The (SAS) Group reported a net loss of -SEK1.7 billion/-$255 million for the full-year 2011, narrowed -24.2% from a net loss of -SEK2.23 billion in 2010. It sustained a net loss of -SEK2.08 billion in the 4th quarter, reversed from a +SEK47 million net profit in the 2010 December quarter.
The bankruptcy of Spanair (SPP) hurt the results, the company said.
"We were unable to deliver marginally positive earnings for the full-year 2011 as previously communicated, due to Spanair (SPP) filing for bankruptcy and the subsequent requisite impairment corresponding to SEK1.7 billion," it said. "As dissatisfactory as it may be, after adjustments for the effects of (SPP), we delivered marginally positive earnings."
(SAS) Scandinavian Airlines announced in January it would lay off -300 administrative staff as part of its "4Excellence" program aiming to cut annual costs by -3% to -5%.
(SAS) is planning to lease ten ex-IndiGo Airlines (IGO) A320-200s from Airbus (EDS) until its A320-200neo airplanes start being delivered. The A320s will replace 13 MD-82 and MD-87 series airplanes it has sold to Allegiant Air (WJE) parent, Sunrise Asset Management that will be phased out over the next 2 years.
March 2012: (SAS) Scandinavian Airlines resumed its route to Shanghai Pudong (PVG) on March 1. From its Copenhagen (CPH) hub, the Star (SAL) Alliance airline now flies 5x-weekly to its second Chinese destination, after Beijing, with 245-seat A340-300 aiplanes. The A340 has returned to (SAS)’s fleet after having been leased out to HiFly (LXA) of Portugal for two years. (SAS) previously operated the route between 2004 and 2007. (SAS) now reportedly expects 100,000 - 120,000 annual passengers on the route, which is operated out of Copenhagen on Tuesdays, Thursdays, Fridays, Saturdays and Sundays, returning the following day. About 25% of passengers are expected to be Chinese. (SAS)’s (CCO), Robin Kamark commented: “The demand for traffic to China is again growing significantly and we see the need for an additional route, complementing our successful Copenhagen - Beijing and other Asian routes. This new service also offers a multitude of smooth transfers on both ends, making it an accessible and quick route for many European and Asian travellers.”
(SAS) plans to replace 3,520 seats in its narrow body fleet with new lightweight, slim economy-class (Y) seats, beginning with its 737-800 fleet in May. At the same time, the airplanes will be equipped with Wi-Fi.
Regional Manager Central Europe, Bjorn Ekegren said that new business (C)- and economy-class (Y) seats in its long-haul fleet are also being evaluated. According to (SAS), 70% of its business is on short-haul routes and 30% is on long-haul operations.
(SAS) is harmonizing its jet fleet bases as it moves toward a single-type fleet. It bases a mix of 737 Classic/737NGs at its Oslo Gardermoen (OSL) hub, MD-80/737NG airplanes at Stockholm Arlanada (ARN), and MD-80/Airbus airplanes at its Copenhagen (CPH) hub.
From 2014 through 2016, (SAS) will base its 737NGs at (OSL), 737NGs at (ARN), and A320s/A320neos at (CPH). (SAS) will launch 25 new routes this year.
(SAS)’s fleet renewal plans include replacing the last remaining MD-80s and the oldest A320s with A320neos, nine 737-800s and 12 leased 737-700s. “This allows us to save up to -€32 million/-$42 million in operational costs annually,” Ekegren said.
May 2012: The (SAS) Group reported a first-quarter loss of -SEK729 million/-$108 million, compounding the -SEK373 million loss incurred for the year-ago period. (SAS) attributed the results primarily due to the weak economic climate, high jet fuel prices and increased capacity in the market.
President & (CEO), Rickard Gustafson said: “High fuel prices presented a significant challenge for the entire aviation industry, including (SAS), and with the prevailing market situation it is difficult to fully offset this cost increase.”
Revenue rose +3% to SEK9.6 billion, and scheduled passenger traffic rose +5.3%. (RPK)s rose +5.1% and (ASK)s were up +2.2%. Load factor increased +2% points from 66.3% LF in the same period last year to 68.3% LF. Charter traffic was also up +7.1%
Passenger trends were particularly favorable on all routes within Scandinavia, with intercontinental traffic to/from the USA stable, but weak on Asian routes. The strongest improvement in the load factor was noted on European routes.
Unit revenue (RASK) was up +1.7%, driven by the positive load factor and slightly weaker yield pressure.
At the end of 2011, the Group launched its "4Excellence" strategy, which aims to reduce annual costs by -3% to -5% by 2015 and return (SAS) to profitability. A number of measures are underway to generate savings of SEK5 billion in 2012 - 2013, of which SEK3.5 billion involves cost measures and SEK1.5 billion revenue measures. Renegotiating collective union agreements is expected to generate -SEK1 billion in savings.
(SAS) in January announced it would lay off -300 administrative workers.
Looking ahead, Gustafson said 2012 is difficult to assess “due to the uncertain business climate, continued intense competition and high fuel prices,” but (SAS) nevertheless expects passenger growth of +5% to +7%. He pointed out that cash flow for the Group was strengthened, mainly driven by a positive trend in future bookings.
“The combination of the uncertainty regarding economic trends, high jet-fuel prices and intense pressure from competitors means that (SAS) will not present a profitability forecast for the full-year 2012,” Gustafson said.
(SAS) Scandinavian Airlines has announced the latest step in its strategy of focusing on its core airline business through the divestiture of six properties at Swedish airports.
(SAS) has signed a sale and leaseback deal with Swedavia, the state-owned group that owns, operates and develops 11 airports across Sweden for the buildings, a mixture of hangars, warehouses, workshops and offices at Stockholm Arlanda airport (ARN), Gothenburg Landvetter airport (GOT) and Malmö Sturup airport (MMX).
(SAS) puts a market value of SEK1.77 billion/$263 million on the deal, adding that the transaction will generate SEK450 million/$66.7 million and capital gains of approximately SEK350 million/$51.8 million, which will be reported in the second quarter. The annual cost for the lease agreement is neutral, compared with ownership of the properties, said (SAS).
“The transaction is part of our "4Excellence" strategy, in which we focus on the core business, while releasing capital and strengthening our financial preparedness,” said Benny Zakrisson, (SAS) Executive VP Infrastructure, Mergers & Acquisitions.
The (SAS) Group recorded a net loss last year of -$255 million, with fuel costs and its stake in defunct Spanish carrier Spanair (SPP) playing their part.
The sales process, which was initiated by (SAS) in 2011, was implemented in international competition. Newsec Corporate Finance was (SAS)’s advisor in the transaction.
Scandinavian Airlines (SAS) and Singapore Airlines (SIA) have finalized a joint venture (JV) agreement that is expected to stimulate growth in existing air services between the two regions. It could also potentially pave the way for a new route between Singapore (SIN) and Stockholm.
(SIA) operates three flights a week between (SIN) and Copenhagen under a code share arrangement with (SAS). The new (JV) agreement fosters the development of business opportunities between the two carriers, such as coordination of flight schedules and joint sales activities, subject to regulatory approval from authorities in Singapore and Europe.
The (JV) agreement follows the signing of a memorandum of understanding (MOU) between the two carriers in January, covering routes between Scandinavia and (SIN).
(SIA) (CEO), Goh Choon Phong called the agreement “a win-win for (SIA) and (SAS). When market conditions allow for it, we look forward to expanding frequency between Singapore and Copenhagen, and adding new destinations in Scandinavia.”
(SAS) President & (CEO), Rickard Gustafson said: “Singapore Airlines (SIA) will be a vital part of our Asian strategy and we look forward to jointly exploring further growth opportunities in this exciting and important market.”
June 2012: (SAS) Scandinavian Airlines, which has been working to return to profitability, is considering more cost-cutting initiatives.
“We still need to find a way to further strengthen our profitability and generate more cash,” (SAS) President & (CEO), Rickard Gustafson said. He said (SAS) has a “very strong financial base today” but it also relies on credit. Gustafson said it needs to be more self-sufficient, which “means even more cost-saving efforts.” He believes employees will endorse the plan as it seeks to create a profit-making business model.
In September 2011, Gustafson announced "(SAS) 4Excellence," aimed at reducing costs by -3% to -5% annually until 2015. Its previous strategy ("Core (SAS)," in which the group focused on the Nordic region as well as its home market) has enabled the airline to reduce unit costs by -23% since 2008.
Rejecting the notion of a potential investor, Gustafson said (SAS) needs to take control of its own destiny: “Only we can develop a sustainable business on our own. When you have that, I’m sure this creates more interest in our company,” he said. “We still have a strong brand position in Northern Europe. We are improving. This is good news.”
He acknowledged the strong competition in the European network, especially against low-cost carrier (LCC) Norwegian Air Shuttle (NWG). He said European business travelers make up 70% of (SAS)’s (ASK)s.
Gustafson said (SAS) has no plans to extend its long-haul operations. “At the moment, a key growth for us is with strong partnerships, like a recently signed joint venture with Singapore Airlines (SIA), which shares the risks of growth.”
Leases on (SAS)’s five A340-300s will begin to expire in the next few years but (SAS) has not decided which airplanes will replace it. Gustafson said the A330 is “one of several options,” although it has not yet made a decision. (SAS)’s last MD-80 will leave by 2014. (SAS)’s Stockholm Arlanda base will be an all-Boeing 737NG operation by 2013.
In five years, Gustafson said he sees (SAS) as a vital part of Scandinavia’s infrastructure and (SAS) will be still in the hands of Norwegian, Denmark and Sweden.
Russia and the Scandinavian countries of Norway, Denmark and Sweden are developing a new bilateral agreement to replace the document signed in 1956.
Russian authorities want approval to operate scheduled flights from Russia to Oslo, Bergen, Tromso, Haugesund, Fagernes, Kirkenes, Trondheim, Stavanger in Norway, Copenhagen, Billund and one more point in Denmark; as well as Stockholm, Goteborg, Malmo, Lulea and Ostersund in Sweden.
Norwegian carriers have asked for routes from Norway to Moscow, St Petersburg, Murmansk, Arkhangelsk and four additional points.
Danish airlines are seeking service from Denmark to Moscow, St Petersburg and Kaliningrad. Swedish carriers are looking to fly from Sweden to Moscow, St Petersburg and three additional points.
The next negotiation on the new agreement will take place at year end or early 2013.
Russian and Scandinavian aviation authorities have confirmed the agreement will include multiple designations of carriers between the countries but with limitations of one carrier per city pair for passenger service. There will be no restrictions on cargo services.
Russian authorities have refused to discuss implementing the agreed-upon principles concerning Siberian overflight with their Scandinavian partners. In 2006, the European Union (EU) and Russian Federation agreed to phase out costly Siberian overflight fees by 2013.
Deputy Minister of Transport, Valery Okulov said Russia will review the agreement this year because of the implementation of the European Union’s Emissions Trading Scheme (EU ETS).
(SAS) resumed flights to Israel’s main airport in Tel Aviv (TLV) from its main hub in Denmark’s capital Copenhagen (CPH) on June 4. Flights operate once a week with 141-seat A319s, but frequencies increase to 2x-weekly between mid-July and the end of August. (SAS) used to operate the route for decades until it was dropped in 2001. Most recently, the route was operated by now bankrupt Cimber Sterling (STR), which dropped the route in April.
(SAS) Scandinavian Airlines launched five routes this month; four from the Norwegian west coast to the Mediterranean (Bergin (BGO) to Malaga (AGP); (BGO) - Split (SPU); Stavanger (SGO) to Nice (NCE); (SVG) to (SPU), and one between the capitals of Sweden, Stockholm Arlanda (ARN) and Iceland, Reykjavik Keflavik (KEF). Norwegian (NWG) competes on all four of the Mediterranean routes from (BGO) and (SVG), operating the same or higher frequencies. (SAS)’ route between (ARN) and (KEF) is resumed, having last been operated in 2007.
July 2012: Scandinavian Airlines (SAS) will add 9x-weekly services to the USA in 2013, including a new route between Copenhagen (CPH) and San Francisco (SFO).
Flights on the new route will operate 6x-weekly from April 8, 2013, and a 3x-weekly evening departure from (CPH) to New York/Newark (EWR) is being reinstated April 1, 2013.
(SAS) Group (CEO) Rickard Gustafson said the flights are being launched in response to market demand, particularly from the business community, and the airline expects to carry about 125,000 passengers per year on the new (CPH) - (SFO) route. “We see a favorable market situation in North America and a particularly strong demand in the growth area of San Francisco and the USA West Coast,” Gustafson said.
(SAS) operates nonstop flights from (CPH), Oslo and Stockholm (ARN) to (EWR), from (CPH) and (ARN) to Chicago, and from (CPH) to Washington DC using A330 and A340 airplanes.
(SAS) launched eight new seasonal routes to southern European summer sun destinations. All but one of the new routes are from Norwegian airports: – Bergen (BGO) to Barcelona (BCN), (BGO) to Palma de Mallorca; Oslo (OSL) to Antalya (AYT), (OSL) to Faro (FAO); Stavanger (SVG) to (BCN), (SVG) to (PMI); and Trondheim (TRD) to (BCN); – the exception being the Swedish capital airport, Stockholm Arlanda (ARN) to (ALC).
Sweden and Denmark combined their air navigation services earlier this month through the jointly owned company Nordic Unified Air Traffic Control (NUAC).
(NUAC) has been certified as a provider of air traffic services and has taken over the en route operations previously provided by Naviair (Denmark) and (LFV) (Sweden) in the Danish/Swedish functional airspace block (FAB). It is the first integrated air navigation services provider (ANS) in Europe to provide services to an (FAB). Advantages touted include a range of synergies that will benefit airlines, passengers and the environment.
(NUAC) was formed as a joint Naviair/(LFV) subsidiary in 2009, the same year the (DK)/(SE) (FAB) was declared. At the beginning of 2011, it began providing operational support to the Copenhagen, Stockholm and Malmö air traffic control (ATC) centers, and now spearheads harmonization initiatives within the (FAB).
(LFV) Director General, Thomas Allard said: “(FAB)s utilize the accessible airspace to the optimum and we are convinced that increased collaboration over national borders is the future of aviation.”
By December, all 27 European Union (EU) member states must have an (FAB) strategy in place, comprising agreements between two or more countries that specify joint use of the airspace. Air navigation services within those (FAB)s can be provided nationally or by a jointly owned enterprise. In the UK - Ireland (FAB), for example, services are provided in joint airspace by the independent (ANSP)s of the two countries: Sweden and Denmark have combined their (ANSP)s in a joint effort.
Chairman of the (NUAC) board and (CEO) of Naviair Morten Dambæk said: “The objective of (NUAC) is first and foremost to provide the most safe, efficient and inexpensive operation of air traffic in the Danish - Swedish area. We are also engaged in implementing efficiency improvements, which will reduce air navigation services costs in Denmark and Sweden by at least -€13 million/-$16.4 million. Add to this that we generate an environmental gain through more efficient air traffic control (ATC). The flight routes will be shorter and the airlines will save fuel and will emit less (CO2).”
(LFV)’s Allard said: “Our objective is to have accomplished the efficiency improvements in the new company completely prior to 2016.”
Lufthansa Technik (DLH) (LTK) has a seven-year component supply contract with (SAS) Scandinavian Airlines, covering (SAS)'s entire fleet of approximately 140 airplanes. The contract also includes Information Technology (IT)-integration services.
Cimber ((IATA) Code: QI, based at Sønderborg airport (SGD)) will add a single ATR72 to its fleet of four CRJ-200s currently operated on a wet-lease agreement on behalf of (SAS) Scandinavian Airlines. It will use the ATR 72 to operate up to five daily flights from Copenhagen Kastrup (CPH) to Billund (BLL) airport on behalf of (SAS) from August 13. Cimber's precedessor, Cimber Sterling (STR) used to operate on the route itself.
August 2012: (SAS) announced a loss for the half-year ending June 30 and cited an uncertain outlook for the remainder of the period.
(SAS) recorded a net loss of -SEK409 million/-$61.1 million, compared to a profit of +SEK178 million for the 2011 first half. Revenue was marginally up at SEK20.9 billion, compared to SEK20.6 billion a year ago. Passenger numbers rose +4.1%.
(SAS) said that its cost-saving program "4Excellence," announced in fall 2011 and which aims to reduce costs by -3 to -5% annually until 2015, was starting to accelerate with unit costs dropping -4% in the second quarter. Its effects would be increasingly felt as the year progressed. Savings of around -SEK5 billion are being targeted for 2012 - 2013.
However, the combination of uncertain economic trends, jet-fuel prices, exchange rates and intense competition meant that (SAS) “is not presenting a profitability forecast for the full-year 2012”.
Higher fuel costs were cited by President & (CEO), Rickard Gustafson as one reason for the financial results; he noted that (SAS)’s MD-80 and 737 classic fleets would be phased out over the next two years and replaced with A320s and 737NGs, with the A320neo to follow on, helping to cut fuel bills.
He added that 38 new routes would be opened by the end of 2012.
(SAS) Scandinavian Airlines relaunched the domestic route between its hub in Denmark’s capital Copenhagen (CPH) and the country’s second-largest airport in Billund (BLL) on 13 August. After the bankruptcy of Cimber Sterling (STR) in May, the route was left unserved until (SAS) now enters with 30 flights a week, operated by the new regional airline Cimber A/S. The route will be operated with 66-seat ATR72 airplanes after a few initial operations with CRJ200s.
737-76N (33005, SE-REU), ex-(N629SC), (GEF) leased.
September 2012: (SAS) Scandinavian Airlines continued expanding its international network out of regional Norwegian airports on August 27 when the pan-Scandinavian flag carrier launched a new service between Stavanger (SVG) in western Norway and the French capital airport Paris Charles de Gaulle (CDG). Flights are operating 4x-weekly with 737 airplanes until the end of the summer scheduling season. This is (SAS)’ fifth route from Stavanger to a destination outside of Scandinavia, after London Heathrow, Aberdeen, Alicante, and Malaga.
(SAS) launched two international services from Norway’s capital Oslo (OSL); both with its fleet of 737 airplanes and both that until recently were operated by other airlines. On August 30, (SAS) began operating 2x-weekly to the capital of the Czech Republic, Prague (PRG), in competition with Norwegian (NWG)’s 10x-weekly. (SAS) has previously operated the route between 2003 and 2006. (CSA) Czech Airlines also operated the route, but it was dropped from (CSA)’s network in March this year. On September 2, (SAS) also began serving Denmark’s second-largest airport, Billund (BLL) from the Norwegian capital, having just resumed services to the airport from Copenhagen. Flights operate 6x-weekly. The route, which was previously operated by now bankrupt Cimber Sterling (STR), is also served by two competing airlines; British Airways (BAB) (Sun-Air) 11x-weekly and Norwegian (NWG), also 6x-weekly.
(SAS) has announced plans to sell its ground handling division (SGH-SAS) Ground Handling which is mainly active at the airports of Oslo Gardermoen (OSL) and Stockholm Arlanda (ARN), in an effort to raise cash and concentrate on its core operations. Only one year ago, (SAS) had decided to integrate its ground handling services subsidiary (SGS) into the airline itself.
(SAS) announced it has signed an agreement to sell four MD-82/87s, with options for 19 MD-82s and 10 spare engines. The purchaser also has an option on a further 19 MD-82s and 10 spare engines from (SAS).
If the option is exercised, (SAS) said this will complete the phase-out of its MD-80 airplane fleet.
The first MD-80 in this sale was delivered; the remaining three airplanes will be delivered in the 2012 fourth quarter. The MD-80s and the engines covered by the option will be delivered on a gradual basis from first quarter of 2013 to the first quarter of 2015, if the option is exercised, (SAS) said.
(SAS) has sold three MD-82s and its single remaining MD-87 (53336, OY-KHU) to an undisclosed buyer that has also secured itself an option to be able to take over the remaining additional 19 MD-82s (SAS) still operates between 2013 and 2015.
October 2012: (SAS) Scandinavian Airlines (SK) may announce a new cost-cutting package, several Scandinavian media outlets have reported. The package could include wide-ranging measures, including reducing staff costs by -15% through pay cuts and changes in work conditions, as it looks to counter the effects of the economic downturn and long-term overcapacity.
However, an (SAS) spokesperson said: “Nothing has been decided so far. There is a lot of speculation and rumor in the media; we don’t have anything to say about that.”
In September 2011, (SAS) announced "SAS 4Excellence" aimed at reducing costs by -3% to -5% annually until 2015. “We still need to find a way to further strengthen our profitability and generate more cash,” (SAS) President & (CEO), Rickard Gustafson said earlier this year. (SAS)’s previous strategy, "Core (SAS)," has enabled (SAS) to reduce unit costs by -23% since 2008.
Separately, (SAS) announced that from November 1, it will be taking over responsibility for commercial operations in Finland, in line with (SAS)’s "4Excellence" strategy. Its Finnish subsidiary, Blue1 (BLF), is being converted to a production company, with the primary task of delivering operational flight services to meet (SAS)’s route network needs.
Later, it was stated that (SAS) is planning yet another major restructuring plan according to a news report by Denmark's "Berlingske." Under the plan that has at least not yet been officially announced, (SAS) would reportedly propose to cut all staff salaries by -25% and to sell its EuroBonus frequent flier plan and regional subsidiary, Wideroe.
(SAS) launched three new routes at the start of the winter scheduling season. From its Copenhagen (CPH) hub, the Star (SAL) Alliance carrier has continued its expansion in the Polish regional market and added 6x-weekly flights to Katowice (LCJ) on October 28, making the central Polish city (SAS)’ sixth destination currently served in the country. However, (SAS) has announced that it is dropping its route to Katowice in December. The new 630 km route is operated with Cimber (STR)’s 50-seat CRJ200s. (SAS) also expanded with two routes from Stockholm Arlanda (ARN). On October 28, (SAS) began operating 4x-weekly flights to the Norwegian petroleum city Stavanger (SVG), the next day followed by 5x-weekly flights to Birmingham (BHX) in the UK. The route to the Midlands airport is operated with 123Y-seat 737-600s and is (SAS)’ second to the city after its flights from Copenhagen.
(SAS) will start replacing some of its remaining MD-82s based at Copenhagen Kastrup (CPH) by second hand A320-200s from January 2013. (SAS) plans to lease a total of 12 ex-IndiGo Airlines (IGO) and ex-Spanair (SPP) A320-200s as an interim solution until its 30 A320neos start to be delivered as of 2016. Its first scheduled A320-200 flight is currently planned from Copenhagen to Oslo Gardermoen (OSL) on January 1, with routes to Aalborg (AAL), Aarhus Tirstrup (AAR), Amsterdam Schiphol (AMS), Bergen Flesland (BGO), Brussels National Zaventem (BRU), Bucharest Otopeni Henri Coanda International (OTP), Dublin International (DUB), Frankfurt International (FRA), Gothenburg Landvetter (GOT), London Heathrow (LHR), Manchester Ringway International (MAN), Munich Franz Josef Strauss International (MUC), Rome Fiumicino Leonardo da Vinci International (FCO), Stavanger Sola (SVG), Stockholm Arlanda (ARN) and Zurich Kloten (ZRH) all also scheduled to be served with its first A320-200s in January.
A320-232 (1383, SE-RJF), ex-Spanair (SPP), ex-(EC-KOX - - SEE ATTACHED - - "SAS-A320-200 - 2012-10"), delivery.
November 2012: (SAS) launches new Katowice (KTW) - Copenhagen (CPH) route. (SAS) launched daily, Stockholm - Birmingham 737-600 service. It will also launch 5x-weekly, Copenhagen - Newcastle service on February 4, which will be operated using a Bombardier CRJ200 on wet-lease from Cimber A/S.
(SAS) Scandinavian Airlines has unveiled a SEK3 billion/$444 million restructuring plan, which includes the sale of Norwegian regional airline, Wideroe and -800 job losses, describing this as the “final chance” to safeguard its future. “We are facing a very serious situation. That is clear,” (SAS) (CEO), Rickard Gustafson said. “We have not made money in a number of years and you cannot continue to operate if you don’t make money. We need to create a new business model. We need to stand on our own two feet. That is what we need to demonstrate very rapidly.”
Under the "4Excellence" plan, which builds on an earlier scheme, (SAS) is aiming to slash -SEK3 billion from its annual cost base and raise a further +SEK billion by selling some of its assets, including Wideroe, its ground handling division, some airport property and airplane engines. It will also centralize back office functions in Stockholm and outsource more work to external suppliers, including its call center, delivering SEK1.5 billion in savings in 2012 - 2013.
Gustafson declined to comment on how or when Wideroe will be sold, saying only that the transaction will give (SAS) more independence from its external creditors. “It is not our first choice or desire to sell Wideroe, but when you have tough choices, you have to take tough decisions. It is a very well run company and I am sure it will generate a lot of interest.”
He also confirmed plans to sell off (SAS)’s ground handling operations, firming up rumors that have been circulating in the press. This seems further advanced than the Wideroe disposal, as Gustafson confirmed that negotiations have begun and “some partners” are already doing due diligence on the deal.
Wideroe is of interest to Malmö Sturup (MMX) based Braathens Aviation. This aviation holding group has declared its interest in Wideroe as a third potential buyer after Flybe (BEE) and a group of Wideroe pilots (FC). Braathens Aviation already owns Golden Air (Sweden) (DC, Trollhättan Vänersborg (THN)), Malmö Aviation (TSW) and Sverigeflyg, a holding company that operates six virtual regional carriers in Sweden.
(SAS) has terminated its SEK1.25 billion bilateral funding facility. Instead, it has struck a deal with its banks and main shareholders to increase (SAS)’s credit line from SEK3.1 billion to SEK3.5 billion and extend the facility until March 2015, but this is conditional on the rapid conclusion of new pilot (FC) and cabin crew (CA) labor agreements. (SAS) gave the stark warning that “the company's existence is subject to the new collective agreements being reached.” Gustafson said he has already had “many and long discussions” with staff, but they have only just seen details of the plan.
For the third quarter, (SAS) generated a SEK11.1 billion turnover, up from SEK10.6 billion in the year-ago quarter. Its net profit stood at +SEK434 million, up from +SEK214 million in the comparable period. Passenger numbers were up +4.5% and passenger revenues rose +9%. Unit costs narrowed 6.1%.
In the first nine months, passenger numbers were up +4.2%, pushing revenues up from SEK31.2 billion to SEK32.1 billion. Net income dropped sharply from +SEK392 million to +SEK25 million. (SAS) is working on a shortened financial year, from January to October, and it is expecting to post a “slightly negative” income before tax and non-recurring items.
(SAS)’s board will meet November 18 to “decide if the conditions for the implementation of the plan exist.”
(SAS) Scandinavian Airlines has reached agreements with all eight of its unions as (SAS) seeks severe cost cuts so that it can avoid bankruptcy.
Following intense negotiations, the unions signed new cost-cutting agreements; a necessary condition to obtaining the SEK3.5 billion/($515 million government and bank loans (SAS) needs to survive. The company’s restructuring plan includes also the sale of Norwegian regional airline Wideroe and -800 job cuts.
(SAS) said it had reached deals with those unions representing its pilots (FC) based in Norway, Denmark and Sweden, as well as those representing cabin staff (CA) based in Sweden and Norway. The Danish pilots (FC)’s agreement requires the approval of at least one-third of its members.
On November 12, the (SAS) board approved a cost-cutting plan named "4 Excellence Next Generation" (4XNG) and which calls for the new union agreements, the centralization of administrative functions, compensation cuts, new pension terms, and the outsourcing of call centers and ground handling.
As fears grew about a possible bankruptcy late last week, (SAS) told crews over the weekend to ensure that airplanes were kept fully fueled so they could return home if necessary. (SAS) also gave cash to on-duty staff to ensure they would have access to hotels.
Later, (SAS) announced it has secured an agreement with its Danish pilots (FC) union, the last labor accord it needed to obtain a loan that will help save it from bankruptcy. The new Danish pilots (FC) collective agreement was the last of eight union accords (SAS) scrambled to conclude so that it could meet the requirements of an SEK3.5 billion/$515 million revolving credit facility from banks and core shareholders. The loan now only requires parliamentary approval, a formality that is expected to be completed within days.
(SAS) has announced that its board members have agreed to cut their own pay by -30% as part of the (4XNG) restructuring plan the majority of its employee unions have already agreed to as well.
(SAS) said it will launch 45 new routes throughout Europe in 2013.
December 2012: (SAS) Scandinavian Airlines reported a year-end net loss of -SEK985 million/-$148 million, worsened from a +SEK338 million net income in the year-ago period. (SAS) said the loss was due to a SEK1.4 billion hit from restructuring costs and other non-recurring items. “[Our] positive underlying income before non-recurring items of SEK23 million is somewhat better than expectations but otherwise not satisfactory by any measure. However, we are making progress on both the income and the cost sides,” (SAS) (CEO), Rickard Gustafson said.
Revenue for the January - October period rose +2.9% to SEK36 billion, while unit costs (excluding jet fuel and currency adjustments) decreased by -4%. This produced an operating profit of +SEK23 million, down from a +SEK96 million operating profit in the prior-year period, delivering a 0.1% margin.
(SAS) recently launched its "4Excellence Next Generation (4XNG)" restructuring plan, which is slated to boost annual earnings by +SEK3 billion. On November 19, (SAS) secured a critical buy-in from its unions for the plan. “During 2012 - 2013, a positive impact on earnings of SEK1.5 billion is expected from the 4XNG plan,” Gustafson said. “We continue to expect a negative trend for the (RASK) and yield but the (SAS) Group's assessment is that potential exists to post a positive (EBIT) margin in excess of >3% and a positive (EBT) for full-year 2012 - 2013. However, due to seasonality, the first quarter of 2013 [November - January] will be extremely weak.”
Later, (SAS) secured approvals to access a new SEK3.5 billion/$533 million credit line after getting union buy-in for its restructuring plan.
In October, (SAS) was forced to halt trading on the Stockholm Stock Exchange following media rumors about its financial stability. It then delayed publication of its third-quarter results, while it worked to finalize new credit lines.
Access to the funding was dependant on (SAS) getting its unions on board for a drastic SEK3 billion restructuring plan, which includes the sale of Norwegian regional airline Wideroe and -800 job losses.
“The board had decided that the conditions for the implementation of "4Excellence NG" exist as the condition to have all eight union agreements signed had been reached. The new revolving credit facility of SEK3.5 billion was therefore only subject to parliamentary approval where required. These approvals have now been obtained in all three Scandinavian countries. All other conditions are also in place.”
(SAS) has now terminated its former SEK366 million credit facility and its SEK1.25 billion bilateral facilities, as they have been replaced by the new lower-cost arrangement, which will run through March 31, 2015.
(SAS) expanded in Finland on December 12, as it launched flights from its Copenhagen (CPH) hub to Ivalo (IVL) in the north of the country. 2x-weekly flights will be operated on the route by (SAS)’s subsidiary, Blue 1 (BLF), using 717s.
January 2013: (SAS) added Kiruna (KRN) as the third destination it serves in Sweden from its Copenhagen (CPH) hub on December 20. (SAS), which already serves Stockholm and Goteborg, now offers 2x-weekly A319 flights to Sweden’s northernmost city located in the province of Lapland. The service will terminate in late April.
(SAS) increased its seasonal ski route offering this month, as it launched low-frequency flights to two Austrian destinations. Commencing respectively, on January 24 and 26, (SAS) inaugurated 2x-weekly services from Stockholm Arlanda (ARN) to Innsbruck (INN), and weekly from Oslo (OSL) to Salzburg (SZG). Competition on the routes comes from Niki (NKI) (weekly flights on the Innsbruck to Arlanda route) and Norwegian (NWG), which offers 2x-weekly departures from Oslo to Salzburg. Both routes are operated with 737s.
February 2013: (SAS) inaugurated three new routes in the first week of February, one domestic in Finland, (Turku (TKU) to Kittila (KTT) and two international, one each from Helsinki (HEL) to Ostersund (OSD)) and Copenhagen (CPH) to Newcastle (NCL)). Notably, (SAS) returned on the 900 km route from the Danish capital, Copenhagen to Newcastle (NCL), which it last served in August 2006. The service was then picked up by Cimber Sterling (STR) in April 2007 and then lost last February as a result of (STR)’s demise.
Swiss AviationSoftware signed a contract with (SAS) for the implementation of (AMOS) Maintenance & Engineering software, slated for implementation beginning in the third quarter 2013.
March 2013: Scandinavian Airlines (SAS) reported a fiscal first-quarter net loss of -SEK630 million/-$98.8 million, reversed from a -SEK2.5 billion loss in the year-ago period.
(SAS) President & (CEO), Rickard Gustafson said strong progress had been made toward the airline’s "4 Excellence NG" turnaround plan; however, he added: “At the same time, we must confirm that (SAS) reported a loss for the quarter, and although seasonal effects are amplified by the new fiscal year, we are far from satisfied. Accordingly, we remain focused on completing the action plan and our aim to achieve a positive income before tax for the full-year remains firmly in place.”
Revenue rose +3.2% to SEK9.6 billion, producing a loss before tax and non-recurring items of -SEK801 million, widening from a -SEK656 million loss in the prior November to January quarter. Gustafson said this was “in line with or somewhat better than our expectations late last year”.
Traffic rose +4.3% during the quarter. Yield was up +1.6%, while (CASK), ex-fuel decreased -2.7% over the three-month period. In January, when the new collective agreements began to kick in, unit costs ex-fuel declined -6.9%. “We are putting another intensive quarter behind us,” Gustafson said. “We have created the means to strengthen our competitiveness, we are well on our way to completing the restructuring plan and we have secured our financial stability. Overall, we have now provided ourselves with greater control of our fate at the same time as the "4XNG" actions are being implemented as planned. Provided that there are no significant unforeseen external events and that jet fuel prices remain stable around current levels, we believe that there is a possibility of achieving a positive (EBIT) margin in excess of >3%, and a positive (EBT) for the full-year 2012/2013.”
During the quarter, (SAS) made several key steps toward its restructuring, including the finalization of new collective agreements, securing SEK3.5 billion in new credit lines, reducing its pensions liability by SEK19 billion, signing a letter of intent (LOI) to sell its ground handling operations to Swissport, sealing an engine sale and lease back deal, which will boost its liquidity by SEK700 million, agreeing further call center outsourcing and the centralization of some administrative functions in Stockholm.
Stavanger, the ‘oil capital’ of Norway; traffic up +6.8% in 2012. For a city with a population of less than <150,000, Stavanger has an extraordinarily busy airport, which in 2012 handled as many as 4.4 million passengers. The majority of this traffic comes from the oil industry, for which Stavanger serves as a major hub, owing to its location near the North Sea oil fields. Major oil companies have their offices in close proximity to the airport, including the state-owned petrol giant, Statoil. Combined with a significant proportion of affluent residents with high propensity to travel in its catchment, Stavanger Airport has stayed clear of major traffic losses in the aftermath of the global economic downturn and follows a path of solid growth.
According to data published by the Norwegian airport operator, Avinor, traffic at Stavanger Airport has been growing steadily in all of the years of the last decade, except for 2009, when a decrease of -3.3% was noted. However, at 3.62 million passengers handled in 2009, the number of passengers handled remained above the 2007 level of 3.53 million.
SEE ATTACHED - - "SAS-2013-03 - STAVANGER TRAFFIC."
While traffic recovery seemed sluggish in 2010 with only +1.6% more passengers using the airport than in the preceding year, 2011 saw a leap of +12.4%, which led the airport to pass the 4 million mark for the first time ever. Its growth trend continued at a slower pace in 2012, when the airport’s traffic grew +6.8% up to 4.4 million, and this pattern is set to persist in 2013, with the first two months of traffic increasing by +7.8% and +6.9% respectively.
A total of 34 destinations will be offered by airlines from Stavanger in April 2013. Of those, only three fall outside Northern and Central Europe (Alicante and Málaga (offered by both Scandinavian Airlines (SAS) and Norwegian (NWG) with 2x- and single-weekly frequencies respectively), as well as Barcelona (2x-weekly by Vueling (VUZ)). About a third of destinations enjoys more than daily frequencies, often as a result of competing offerings from two or more airlines.
Unsurprisingly, Oslo is the largest destination from Stavanger and accounts for a 28.2% of frequencies and 36.7% seats. (SAS) and Norwegian (NWG) compete in this core domestic market, offering 94 and 67 weekly flights, respectively, on the route in April 2013. However, (NWG) is operating with larger airplanes, which means that (NWG) offers only <14% less seats in the market than its competitor, compared to <29% less frequencies. Another domestic destination and the country’s second-largest city, Bergen, commands roughly half of the capacity (both in terms of frequencies and seats) offered from Stavanger to Oslo.
While no other destination accounts for more than >10% of the airport’s capacity, three large European hubs are served with high frequencies: – Copenhagen ((SAS): 38 weekly flights), Amsterdam (KLM): 35), and London Heathrow (British Airways (BAB): 14; (SAS): 7).
(SAS) and (NWG) share 75% of capacity. While a total of 14 airlines operate at Stavanger Airport in April 2013, the airport is hugely dominated by two carriers, (SAS) and (NWG), which account for 64% of weekly frequencies and as much as 76% of seats. Both carriers increased their offering in the course of last year: (SAS) added services to Málaga (1 weekly frequency), Paris (CDG) (4) and Stockholm Arlanda (15), while (NWG) launched Manchester (2) as its only new route from Stavanger since April 2012.
While Norwegian (NWG) has partially explored the growing market from Stavanger to Eastern Europe with services to two Polish destinations (2x-weekly each to Warsaw and Kraków), Wizz Air (WZZ) has emerged as the leading operator. While (WZZ) succumbed to competition from (NWG) on the route to Warsaw, it added 3x-weekly flights to Vilnius and this month, also 2x-daily to Szczecin. (WZZ) also continues to offer 3x-weekly departures to Gdansk and 2x-weekly to Katowice.
Swiss Aviation Software signed a contract with Scandinavian Airlines (SAS) for the implementation of (AMOS) Maintenance & Engineering software, slated for implementation beginning in the third quarter 2013.
Scandinavian Airlines (SAS), which has made strong progress toward (SAS)’s "4 Excellence NG" turnaround plan, is moving forward with plans to harmonize its fleet.
In March 2012, it announced plans to replace 3,520 seats in its narrow body fleet with new lightweight, slim economy (Y)-class seats, beginning with its 737-800s.
(SAS) Regional Manager Central Europe, Bjorn Ekegren said (SAS) will “take delivery of nine new 737-800s, which will be based in Norway and 12 leased 737-700s to Sweden. All deliveries are between 2012 and 2014,” he said, declining to name the leasing companies.
The A320 Classic will replace the last MD-80s, which will be phased out this year. From 2016, the Denmark-based A320s will be replaced by A320neos. (SAS) will centralize its 737 NG/Classic fleet in Oslo Gardermoen and Stockholm Arlanda.
(SAS) will also begin to introduce Wi-Fi on short-haul flights, beginning with its 737 NG/classic fleet. Ekegren said 50 short-haul airplanes would be overhauled by 2015.
(SAS) will launch 45 new routes in 2013, many of them based on seasonal routes. Its Copenhagen - San Francisco services are scheduled to launch from April 8.
(SAS) launched 2x-weekly, 737 Stockholm Arlanda - Madrid on July 1.
(SAS) Scandinavian Airlines is replacing customer service offerings in Scandinavia and Europe with new (SAS) Go and (SAS) Plus. (SAS) Go includes a checked bag at no extra charge, coffee or tea on board, including mobile check-in. (SAS) Plus includes two checked bags at no charge, (SAS) Fast Track, lounge access, meals and drinks on board, plus mobile check-in.
(SAS) operates seven A340-300s, four A330-300s, eight A321-200s, four A319s, 27 MD-82/87, three 737-400, seven 737-500s, 28 737-600s, 18 737-700s, 18 737-800s and 12 Bombardier CRJ900s, according to the (SAS) website.
April 2013: (SAS) will begin 6x-weekly, London Heathrow - Copenhagen - San Francisco A340 service this spring. (SAS) will begin 2x-weekly, Stockholm - Madrid 737 service on July 1.
May 2013: Lufthansa (DLH) and (SAS) Scandinavian Airlines will discontinue their network cooperation on routes between Germany and Scandinavia. (DLH) will gradually transfer all European routes that bypass its Frankfurt hub and Munich to its low-cost carrier (LCC) subsidiary, Germanwings (RFG) by the fall of 2014.
The code share agreement between (SAS) and (DLH) remains unchanged as both airlines are Star Alliance (SAL) members.
(SAS) Scandinavian Airlines began 6x-weekly, Copenhagen - San Francisco A340-300 service.
(SAS) and Turkish Airlines (THY) began code sharing as Star (SAL) Alliance partners on six Turkish destinations: Istanbul, Ankara, Antalya, Bodrum, Dalaman, and Izmir from Copenhagen, Oslo, Stockholm, Gotenburg, Helsinki, Aalborg, and Billund. (THY) will add its codes to more than >20 cities in Scandinavia and Finland. (SAS) also began 6x-weekly, Copenhagen - Budapest and 3x-weekly, Oslo - Budapest.
(SAS) started flying on the route from Oslo (OSL) to Santorini (JTR) on May 12th, making the Greek island the only destination in the country it serves from Oslo, the Norwegian capital. The 2,800 km route to Santorini, which is also (SAS)’s only Greek destination apart from Athens (served from Copenhagen – 2 weekly flights; Stockholm Arlanda – 2; and Helsinki – 1) operates with weekly frequencies until September 22nd. Initially, there is no competition on the route, but Norwegian (NWG) plans to begin a 3x-weekly service on June 23. On the same day, (SAS) also inaugurated services from Stockholm Arlanda (ARN) to Menorca (MAH), which it now operates with weekly frequencies. 737-800s are deployed on the route, which marks (SAS)’ return to Mahon following six years of absence.
(SAS) has agreed to sell 80% of its shares in regional subsidiary Widerøe to a group of Norwegian investors for approximately SEK2 billion/$307 million as part of its ongoing efforts to cut costs and return to profitability.
June 2013: (SAS) Scandinavian Airlines reported a second-quarter net loss of -SKr388 million/-$59.3 million, narrowed -7.5% from a -SKr429 million loss in the year-ago period. The airline said the improvement was due to its "4XNG" restructuring plan. “With the continued restructuring of (SAS) and aggressive measures for our customers, we are creating, step by step, a more competitive company with a more stable financial situation,” (SAS) (CEO), Rickard Gustafson said.
In second quarter fiscal year 2013 (November 2012 to April 2013), (SAS) has turned around pre-tax losses to report a profit (before non-recurring items) and reversed the pattern of first quarter fiscal year 2013, when its losses widened. It has made progress with cost reduction and looks to be on track to achieve its fiscal year 2013 financial targets. It has also recently agreed to sell its Wideroe subsidiary and made further progress in its fleet modernization program.
(SAS)' recent launch of new fare classes "SAS Go" and "SAS Plus" scarcely looks to be the “new service concept” that it claims, but at least the Nordic region’s largest carrier is attempting to differentiate itself from its many and growing competitors. In 2012, President & (CEO), Rickard Gustafson said the restructuring plan was a “final call” for (SAS). It seems that, at least for now, the group has not yet missed the flight.
(SAS) commenced operations on 11 routes in the course of last week. In addition to multiple destinations launching from (SAS)’s three main hubs, Copenhagen (CPH), Oslo (OSL) and Stockholm Arlanda (ARN), (SAS) also inaugurates new routes from Bergen (BGO) and Trondheim (TRD). All but one (the relaunched service from the Swedish capital to Madrid (MAD)) are operated on a seasonal basis.
(GE) Capital Aviation Services Limited (GECAS) (GEF) announced it has delivered seven new leased 737-800s to Scandinavian Airline Systems (SAS) to expand and modernize (SAS)’s fleet.
The 737-800s were delivered during the period April 2012 to May 2013 and came from (GEF)’ existing order book with Boeing (TBC). Additionally, (GEF) is scheduled to deliver two new leased 737-800s to (SAS) in 2014.
(SAS), the flag carrier for Denmark, Norway and Sweden, operates a fleet of some 130 airplanes to approximately 100 destinations.
Rolls-Royce (RRC) has won an order worth $1 billion, at list prices, from Scandinavian Airlines System (SAS) for (Trent XWB) and (Trent 700) engines and long term TotalCare® services. The (Trent XWB)s will power eight Airbus A350-900 airplanes and the (Trent 700)s will power four (A330-300)s.
The (Trent XWB), specifically designed for the A350 XWB, is the fastest selling (Trent) engine ever, with more than >1,400 already on order. It powered the first test flight of the A350 XWB at Toulouse on June 14th this year. The (Trent 700) is the market leader on the A330 with more than >1,500 sold or on order.
July 2013: (SAS) Scandinavian Airlines begins daily, Copenhagen - Humberside service on October 28.
The (SAS) Group has finalized a sale and leaseback agreement with Deucalion Capital X and Engine Lease Finance Cooperation for six 737-600s. The lease periods are four to five-and-a-half years.
The company said the deal is part of the "4Excellence Next Generation" strategy to improve its financial position.
(SAS) Group (CFO), Göran Jansson said, “This sale and leaseback transaction represents an important step in the improvement of (SAS)’ financial position. In February, we succeeded with a sale and leaseback agreement on spare engines and we now further increase our liquidity from asset sales with this agreement.”
Separately, the (SAS) Group announced it accomplished a private placement of €35 million/$46.4 million. The private placement is unsecured and has a five-year term. “The funds will be used to support (SAS)’ longer-term liquidity level and be used to pay off upcoming unsecured maturing debt. The private placement has been completed in accordance with current market conditions with private investors,” the company said. Deutsche Bank has acted as a sole advisor for the transaction.
August 2013: (SAS) launched two new routes from Stockholm Arlanda (ARN) to airports in Denmark. On Sunday August 18, (SAS) started flying 11x-weekly to Billund (BLL), a route that was previously served by Cimber Air (STR) until early May 2012. Then, on Monday August 19, (SAS) began 4x-weekly flights to Aalborg (AAL). Both of these routes will be flown on behalf of (SAS) by Braathens Regional (formerly known as Golden Air), using Saab 2000s.
September 2013: (SAS) Scandinavian Airlines reported third-quarter net profits of +SKr844 million/+$129.5 million, a +58.1% improvement over a net profit of +SKr534 million in the year-ago period.
Lufthansa (DLH) is again eyeing a possible stake in (SAS) Scandinavian Airlines, according to several media reports in Scandinavia and Germany. However, a (DLH) spokesperson said in Frankfurt: “First, (DLH) [must] concentrate on its cost-cutting program "SCORE" and currently we have no intention [to consider] airline acquisitions. On this focus, nothing has changed,” the spokesperson said, adding that this goes for (LOT) Polish Airlines and other [possible] candidates.
This statement is in line with what (DLH) Chairman & (CEO), Christoph Franz said. “We [have] always said that we like to play our part in the consolidation of European aviation. And we always look [around] at what is going on [regarding airline acquisition]. But first, we have to bring our house in order,” Franz said.
As part of its cost-cutting program "SCORE," the Lufthansa Group wants to improve operating results by at least €1.5 billion/$2.02 billion by the end of 2014.
(SAS) President & (CEO), Rickard Gustafson said that “first we have to restructure ourselves. Then we can look for a possible investor.”
The spokesperson added that Franz explained during a press meeting that he is impressed with the restructuring of (SAS).
(SAS) has completed the previously announced sale of 80% of regional carrier, Widerøe to a Norwegian investor group, netting about SEK2 billion/$311 million, which includes airplane-related transactions. The investor group comprises Torghatten (ASA), Fjord1 (AS) and Nordland Fylkeskommune.
The sale, which was announced in May, is part of (SAS)’s survival strategy.
(SAS) Group President & (CEO), Rickard Gustafson said recently (SAS) had to make “some big movements and steps” during the restructuring process. “The sale of Widerøe was one of these.” The proceeds from the transaction are expected to reduce (SAS)’ net debt by a corresponding amount.
Approximately half of the proceeds will strengthen (SAS)’ cash and cash equivalent position. In addition, the transaction will reduce the previously announced negative effect on (SAS) shareholders’ equity from amended reporting rules for pensions by approximately SEK1 billion.
(SAS) will divest the remaining shares in Widerøe during 2016.
Earlier this month, (SAS) posted a +58.1% jump in third-quarter net profits.
Singapore Airlines (SIA) and Scandinavian Airlines (SAS) have expanded their code share agreement with immediate effect to cover more destinations in Europe, Southeast Asia, Australia, and New Zealand.
(SIA) is code sharing on (SAS)-operated flights from Copenhagen to Alesund, Bergen, Stavanger, and Trondheim in Norway; Gothenburg in Sweden; Aalborg, Aarhus, and Billund in Denmark; and Turku in Finland.
In turn, (SAS) is code sharing on (SIA)-operated flights beyond Singapore to Adelaide, Brisbane, Melbourne, Perth, and Sydney in Australia; Auckland in New Zealand; Denpasar and Jakarta in Indonesia, and Kuala Lumpur in Malaysia.
Star (SAL) Alliance partners (SIA) and (SAS) received final regulatory approval for a joint venture in November 2012.
Schedules show that (SIA) flies 5x-weekly between Singapore and Copenhagen.
October 2013: Scandinavian Airlines (SAS) increased its European offering from Copenhagen (CPH) in the course of last week, as it commenced operations on two routes (one each to Germany and the United Kingdom) from the Danish airport. On October 27, (SAS) inaugurated daily flights to Bremen (BRE) in northern Germany, while on the following day, a 6x-weekly schedule to Humberside (HUY) commenced. Both new routes are operated using CRJ200s.
(SAS) has finalized a long-haul airplane order for four A330-300s and eight A350-900s, plus six options. The October 3 order follows a memorandum of understanding (MOU) that was signed in June as part of its strategy to modernize its fleet with more fuel-efficient airplanes. The deal is worth $3.3 billion at list prices.
The A330s will be delivered in 2015 - 2016 and the A350s will be delivered from 2018.
(SAS) has embarked on a series of cost-cutting programs and sales of assets, such as Norwegian subsidiary Widerøe. Its financial situation has recently seen signs of improvement.
Jet Time (JTM) has taken delivery of the first of six new ATR 72-600 turboprops. This airplane has been acquired on lease from the Danish leasing company, Nordic Aviation Capital (NAC). All the ATR 72-600s will be assigned to feed the (SAS) Scandinavian Airlines route network, as part of a commercial arrangement between (SAS) and Jet Time (JTM), and they will all be painted in (SAS) livery. Deliveries of the next five ATR 72-600s will be completed by early in 2014.
(SAS)'s final three Boeing MD-80s were retired from operations on October 26th, ending 28 years of service with (SAS). To mark the event, (SAS) performed a special service with one example, carrying out a 2 hour tour of Denmark. Flypasts were made at Aalborg and Billund airports, followed by the Storebælt and Øresund bridges.
Finally, the MD-80 made a low pass at Copenhagen airport, before landing for the last time as part of the Scandinavian Airlines (SAS) fleet. Piloting the MD-80 (LN-RMM) were (SAS)’s Chief MD-80 Pilot Ulrik Pedersen and Captain Dirch Hansen. The latter was full of praise for the twinjet: “It was a solid airplane that was able to cope well with the harsh winter weather found in northern Norway.”
SEE PHOTO - - "SAS-2013-10 - LAST MD-80 FLIGHT."
(SAS), which at one point operated 66 MD-80s, has replaced them with Airbus A320s. Deliveries of 30 additional A320neo airplanes will commence in 2016.
November 2013: Scandinavian Airlines (SAS) began 5x-weekly, Copenhagen - Humberside service.
(SAS) is to start seven new services between the end of March and mid-April 2014. From March 30th, the Scandinavian airline group will operate a new year-round Swedish domestic route: Stockholm - Visby.
New links from Norway to Denmark, Greece and the UK will also be added as (SAS) launches year-round services from Oslo to Aalborg (on March 30th) and Aberdeen (March 31st), plus seasonal services, until October 11th, from the Norwegian capital to Chania (launching April 12th) and Edinburgh (April 10th). From the same date, the Scottish capital will also be served seasonally from Stavanger.
Another UK destination, Leeds Bradford, is to be served year-round from Copenhagen, beginning March 31st.
In October, (SAS) opened new year-round services from Copenhagen to Bremen in Germany and Humberside, UK. In February, it will open a winter route to Salzburg from the Danish capital. It will also, that month, operate services from Oslo to the Russian city of Sochi, where the Winter Olympics are being held.
In 2013, (SAS) has launched more than >50 new domestic and European routes, plus a Copenhagen - San Francisco service.
Joakim Landholm, (SAS)’s Executive VP Commercial, commented: “(SAS) offers more destinations and a greater frequency than any other Scandinavian airline, and we will continue to invest in our offering to our customers. “This last year we have succeeded in improving our competitiveness and increasing productivity, and this gives us the opportunity to open many new routes to serve our customers.”
December 2013: The Scandinavian SAS Group reported a net income of +SEK179 million/+$27.3 million for the year ended October 31, reversing a loss of -SEK3 billion in the year-ago period.
The company said its cost-cutting and restructuring strategy, which included the sale of regional carrier Widerøe toward the end of the financial year, is starting to pay off and contributed to the turnaround.
(SAS) President & (CEO), Rickard Gustafson said: “Developments in the fourth quarter underlined the speed at which conditions change in the airline industry. Conditions worsened dramatically in the fourth quarter with a +10% increase in capacity in the Nordic market in conjunction with a continued weak macroeconomic trend. (SAS) has not been left unscathed, but due to the vigorous measures implemented under the change program, the weaker income trend could be partially offset by lower costs.”
He said the results were “evidence that our established strategy has started to improve our competitiveness” and stressed that “substantial progress” had been made in strengthening the group’s financial position, including the divestment of assets worth about SEK2.8 billion during the year.
Group revenue was marginally down year-on-year to SEK42.2 billion from SEK42.4 billion in Fiscal Year (FY) 2012, with revenue at Scandinavian Airlines (SAS) largely static at SEK39 billion. However, (SAS)’s operating income was in positive territory for the year, reaching +SEK1.7 billion, reversing an operating loss of just over -SEK1 billion during the previous year.
Passenger numbers were up just +0.1% to 25.5 million, but both yield (currency adjusted) and load factor were marginally down year-over-year. Yield was down -0.4% and load factor was down -1.5 points to 73.6% LF.
(ASK)s rose +6% to almost 40 billion and (RPK)s were up +3.8% to nearly 29 billion for the year. Meanwhile, a further SEK10 billion was shaved off payroll expenses, on top of SEK12.2 billion in the previous financial year, while operating expenses were reduced by -SEK24 billion, just marginally less than the -SEK24.4 billion reported for the year-ago period.
Unit cost decreased -5.9% and airplane utilization increased almost 30 minutes per day year-over-year.
(SAS) warned that market conditions remains challenging, with overcapacity in many of its markets. However, it said the restructuring program is gradually increasing the group’s competitiveness and earnings impact from the restructuring program is expected to amount to SEK1.2 billion in the 2013/2014 fiscal year.
“Provided that market conditions—in terms of capacity, jet fuel and exchange rates—do not decline any further and that no unexpected events occur, potential exists to post a positive (EBT),” (SAS) said. However, it also expects weaker market conditions to keep it from reaching financial targets in 2014/2015 until 2015/2016.
Singapore Airlines (SIA) and Star (SAL) Alliance partner, (SAS) Scandinavian Airlines will begin code sharing on (SAS) flights Copenhagen - Berlin, - Hamburg, - Palanga, - Vilnius, - Gdansk, - Poznan, - Warsaw, and – Wroclaw.
(SAS) will start 3x-weekly, Oslo - Aberdeen service and 2x-weekly Leeds/Bradford - Copenhagen on March 31, 2014. (SAS) will also operate a 2x-weekly seasonal Edinburgh - Oslo and - Stavanger from April 10 through October 5.
Cimber ((IATA) Code: QA, based at Sønderborg) (STR) has secured a contract with (SAS) Scandinavian Airlines ((IATA) Code: SK, based at Copenhagen Kastrup) in which it will operate its sole remaining ATR 72-200 (437, OY-CIB), on Oslo Gardermoen to Billund flights beginning March 30, 2014. The announcement comes after Cimber (STR) recently announced the lay off of 24 employees due to the planned return of its other ATR 72-200 (192, EC-LSN) to its lessor, Swiftair ((IATA) Code: WT, based at Madrid Barajas) (SWF). Cimber (STR) lost out to rivals Jet Time ((IATA) Code: JO, based at Copenhagen Kastrup) (JTM) in a recent tender for (SAS) regional flights. Jet Time (JTM) won the contract by leveraging its brand new ATR 72-600s' improved efficiency.
January 2014: (SAS) increased its seasonal ski route offering, as it launched low-frequency flights to two Austrian destinations. Commencing respectively on January 24th and 26th, (SAS) inaugurated 2x-weekly services from Stockholm Arlanda (ARN) to Innsbruck (INN), and weekly from Oslo (OSL) to Salzburg (SZG). Competition on the routes comes from Niki (NKI) (weekly flights on the Innsbruck to Arlanda route) and Norwegian (NWG), which offers 2x-weekly departures from Oslo to Salzburg. Both routes are operated with 737s.
(SAS) launches 3x-weekly, Stockholm Arlanda - Hamburg 737-600 service on April 22.
(SAS) Scandinavian Airlines has appointed (SAS) VP Network & Partners, Karl Sandlund to Executive VP Strategic Initiatives, effective February 1. The new department will be responsible for driving cross-organizational projects, and for the continued streamlining of the company through the implementation of (LEAN), among other initiatives.
Nordic Aviation Capital and (KfW) (IPEX)-Bank have closed the first two transactions under a new three airplane bilateral financing facility. The two ATR 72-600 airplanes have been delivered to Jet Time (JTM) in October and November 2013 and will be on a long-term operating lease to (JTM) with a wet lease to (SAS) Scandinavian Airlines. The transactions closed December 19, 2013. A third ATR 72-600 followed this month.
February 2014: (SAS) Scandinavian Airlines said it has received strong interest from investors earlier this month of approximately seven million preference shares with a value of SEK3.5 billion/$540 million. “The demand has exceeded our expectations several times over and has resulted in significant over-subscription,” (SAS) (CEO), Rickard Gustafson said.
“The issue will provide the appropriate conditions for (SAS) to reach its financial targets ahead of what would otherwise have been the case, in addition to providing capital for the ongoing modernization of the airplane fleet.”
One benefit of the successful issue is that (SAS) can cancel a revolving credit facility that was created in fall 2012 when the airline was in financial instability.
In a second statement, (SAS) said it intended to issue SEK1.6 billion in guaranteed convertible bonds. These, together with the earlier preference share offer, would be used to redeem outstanding bonds due to mature in 2015, contribute to the purchase of new airplanes and reduce (SAS)’s dependence on bank financing.
March 2014: The (SAS) Group has reported a net loss of -SEK112 million/-$17.5 million for the quarter November 2013 to January 2014, marking a significant improvement from the -SEK588 million net loss recorded for the same period in the previous year.
(SAS) said the results were “as expected,” with comparative figures for the year-ago period including the results of regional carrier Widerøe, which was sold in September last year.
(SAS) President & (CEO), Rickard Gustafson said: "As expected, this has been a weak quarter in terms of earnings. The first quarter is seasonally the weakest, but this quarter was also marked by overcapacity and lower growth, which put pressure on margins across the entire market. Although the result is as expected, it is not satisfactory.”
He said (SAS) would continue its drive for long-term sustainable profitability by reinforcing three strategic priorities: establishing an efficient operational platform, winning the battle for Scandinavia’s frequent travelers, and investing for the future.
During the quarter, revenue fell to -SEK7.9 billion from -SEK9.6 billion during the same period in the previous financial year. However, operating income was up to +SEK132 million, reversing an operating loss of -SEK525 million in the year-ago period.
Payroll and other operating costs were down to SEK1.5 billion from SEK3.2 billion and SEK5.5 billion from SEK6.1 billion, respectively. Unit costs excluding jet fuel fell -3.2%.
The total number of passengers carried (scheduled and charter) was down -0.4% year-on-year, to 5.61 million for the November to January quarter from 5.63 million during the year-ago period. Traffic (RPK)s were down -0.2% to 6.34 billion from 6.35 billion during the same period the previous year, while capacity (ASK)s were up +2.8% to 9.3 billion in the first quarter of the current financial year from nine billion during the year-ago period. Load factor for the quarter fell two percentage points to 68.2% LF from 70.2% LF during the year-ago quarter.
In terms of scheduled traffic alone, (RPK)s and (ASK)s were both up +0.7% and +3.4%, respectively. However, scheduled passenger numbers were marginally down -(0.2%) to 5.42 billion from 5.43 billion. Load factor and yield were also both down, with load factor down -1.8 percentage points to 66.3% LF from 68.1% LF during the year ago period, and passenger yield down -5.6% for the quarter.
Gustafson said: “Our forecast for the full-year remains. During the year, the expected impact on earnings from the restructuring program is SEK1.2 billion, and bookings at the beginning of the second quarter were at the same level year-on-year. Provided that the market conditions, in terms of capacity, jet fuel and exchange rates, do not decline any further and that no unexpected events occur, potential exists to post a positive (EBT), excluding the positive effect from the changed pension terms, also in the 2013/2014 fiscal year.”
Scandinavian Airlines (SAS) launches 6x-weekly, Aberdeen - Oslo Boeing 737-700/800 service, and 2x-weekly, Leeds Bradford - Copenhagen, Bombardier CRJ-900 service on March 31.
April 2014: SEE ATTACHED - - "SAS-2014-04-UPDATE-A/B/C/D/E/F/G/H."
(SAS) expanded its European network with the addition of two new services, both of which are launched from Oslo Gardermoen (OSL). With the longest sector being the 2,900 km service to Chania (CHQ) in Greece, launched on April 12th and operated weekly (Saturdays) utilizing its 141-seat 737-700s, and the shortest being inaugurated to Edinburgh (EDI) on April 10th and served 2x-weekly (Thursdays and Sundays) by a mixed fleet of (SAS)’ 186-seat 737-800s and 141-seat 737-700s, both airport pairs will be served until October 11. While (SAS)’s second route to Edinburgh will face competition from Norwegian (NWG)’s five weekly services, its fourth route to Greece is already flown by (NWG) with weekly operations. (SAS) is also planning to commence another service from Edinburgh to Stavanger on April 24th.
(SAS) Scandinavian Airlines increases its USA services in celebration of its 50th anniversary of its Chicago route: Copenhagen - San Francisco: 7x-weekly, from June 10 - October 25; Stockholm - Chicago, daily summer schedule, winter 6x-weekly; Stockholm - New York, daily summer, winter 6x-weekly; Oslo - New York, daily summer schedule, winter 6x-weekly; Stavenger - Houston, 6x-weekly from August 20.
(SAS) will launch an all-business (C) class transatlantic route between Stavanger and Houston, Texas. The sector will largely cater to the oil and gas industry; Stavanger is the Norwegian center for North Sea hydrocarbon operations. “The route we have established is a tailored product for a defined market with particular travel needs,” (SAS) President & (CEO), Rickard Gustafson said.
The 6x-weekly route will launch August 20 and will be operated by a 44C-seat, Boeing 737-700 wet-leased from Swiss company, PrivatAir (PTS). It will operate in (SAS) livery and will have (SAS)’s long-haul, business (C)-class service standards. It will have reclining (but not lie-flat) seats and passengers will have tablet-based entertainment systems, plus full-service meals and service.
The flight is over >4,200 nm, which is quite impressive, since the 737-700 normally will fly a maximum distance of 3,200 nm. Do not worry, the plane will make it (PrivatAir (PTS) lists the max range at 5,000 nm). Having fewer seats means less weight and increased flight distance capability.
If you are interested in taking a flight, tickets will go on sale on April 29th. What a thrill right? The only thing better might be flying a Boeing 737-700BBJ business jet!
May 2014: Scandinavian Airlines (SAS) is facing “historically high” pressure on yields that will affect its full-year financial results.
(SAS) said that capacity in its Scandinavian home markets has increased by more than >5% in the past six months, partly due to more airlines increasing capacity in the Nordic region. A spokesman said these include fast-expanding, low-cost carrier (LCC) Norwegian Air Shuttle (NWG), (KLM) Royal Dutch Airlines, and several southern European airlines.
The jump in the number of seats means that (despite the fact that (SAS) posted a +9.2% rise in passenger numbers in April compared to the previous year, and load factor jumped +8.6% to a record 78.6% LF) these improvements are not feeding through to the bottom line.
(SAS) said yield and passenger revenues divided by (ASK) (PASK) was weaker than expected during the second quarter. In March, (SAS)’ currency-adjusted yield and (PASK) fell -5.3% and -9.8%, respectively. In April, load factor improved significantly, but yield remained low and (PASK) was weak. Other revenue streams also experienced downturns.
“As a result of the capacity and yield trend during January - April, (SAS) will recognize earnings below market expectations for the second quarter.” (SAS) gave no estimate of how badly numbers would be affected.
“Provided that market conditions (in terms of capacity, jet fuel and exchange rates) do not decline any further and no unexpected events occur, potential exists to post a positive (EBT), including the positive effect from the amendments to pension reporting, also in the 2013 - 2014 fiscal year,” (SAS) said.
In its first-quarter financial statement in mid-March, (SAS) said it would potentially post a pre-tax profit, excluding the positive effect from the amendments to pension reporting.
No figures were given in a recent statement, although (SAS) said its ongoing restructuring program is proceeding according to plan and is expected to generate a savings of -SEK1.2 billion/-$185 million in the current financial year.
To offset the pressure on yields, (SAS) has improved its offer to regular travelers, increasing benefits from its EuroBonus frequent flyer program.
Passenger numbers grew as a result, but the uncertainty caused by increasing capacity in the market, means that revenues from growing passenger volumes are difficult to estimate, (SAS) President & (CEO), Rickard Gustafson said.
(SAS) expects to release second-quarter figures on June 18.
(SAS) expanded its European network with two new services. On April 22nd, (SAS) inaugurated its second route to Hamburg (HAM), namely the 829 km sector from Stockholm Arlanda (ARN) that will be served 11x-weekly, utilizing a mixed fleet of its 115-seat 717-200s, 141-seat 737-700s and 186-seat 737-800s. Two days later, on April 24, (SAS) commenced its third route to Edinburgh (EDI) with 2x-weekly flights (Thursdays and Sundays) from Stavanger (SVG) in Norway, which will be operated using a mixed fleet of (SAS)’s 141-seat 737-700s and 186-seat 737-800s until October 5th. (SAS) is already flying to Edinburgh with four weekly flights from Stockholm Arlanda and 2x-weekly operations from Oslo Gardermoen, with the latter having been launched on April 10th. Only the service to Germany will face competition from germanwings (RFG)’s 15x-weekly flights.
(SAS) Scandinavian Airlines has detailed plans to upgrade cabins on its existing long-haul fleet as it awaits new airplanes in the coming years. (SAS) will upgrade seven Airbus A340s and A330s with new seats in all cabins, on-demand entertainment system and Wi-Fi access.
All seats in business (C) class will have direct access to aisles and will be fully flat. “The new interior is designed to meet the needs of frequent flyers and substantially enhances our customer offer,” (SAS) President & (CEO), Rickard Gustafson said. The first airplane with the new cabin is due to enter service in early 2015, with most of the company’s long-haul fleet receiving the new interior within 12 months.
(SAS) currently provides long-haul service to New York, Chicago, Washington, San Francisco, Beijing, Shanghai, Tokyo, and Houston (from August 2014).
(SAS) said the new interiors will help the carrier maintain its passenger appeal until new airplanes (four A330-300s in 2015 - 2016, plus eight A350-900s (plus six options)) start to arrive from 2018 onward.
June 2014: (SAS) Scandinavian Airlines has announced plans to slash nearly -300 positions following the company’s second-quarter net loss of -SEK800 million/-$120 million, widened from a -SEK405 million loss in the year-ago period.
Second-quarter revenue fell -14.7% year-over-year to SEK8.4 billion from SEK9.9 billion during the 2013 second-quarter. Operating expenses came to SEK9.1 billion, down -9.1% year-over-year, but nonetheless created a second-quarter operating loss of -SEK661 million, widening a -SEK109 million loss over the previous year’s April quarter. “(SAS) posted a weak second quarter which we are deeply disappointed with and which was substantially below expectations,” (SAS) President & (CEO), Rickard Gustafson said. “During the quarter, intensive competition and greater than expected price pressure in the Scandinavian air travel market reduced margins and increased market uncertainty.”
The full-time-equivalent personnel to be cut will come from (SAS)’ “support, administration, management and commercial functions, primarily in Scandinavia,” Gustafson said. “Furthermore, we are enhancing the efficiency of ground operations in Scandinavia and will optimize the base structure for flight crew (FC) in Norway.”
For (SAS)’ second-quarter scheduled passenger traffic, (RPK)s and (ASK)s were both up +6.2% and +4.2% year-over-year, to 6.96 billion (RPK)s and 10.45 billion (ASK)s, respectively. Scheduled passengers increased +5.3% year-over-year, to 6.4 million. (SAS)’ second-quarter passenger load factor increased +1.4 points to 71.4% LF and passenger yield fell -10.6% year-over-year.
The company also announced plans to invest SEK500 million in “a new digital platform, which means higher service levels and automation … taken together, we are initiating improvements that will have an additional earnings impact of SEK1 billion in the 2014 - 2015 fiscal year.”
(SAS) implemented its restructuring plan in November 2012. “[Since then], we have lowered unit cost, excluding jet fuel by about -9%,” Gustafson said. “Over the full fiscal year, the expected impact on earnings from the restructuring program is SEK1.2 billion. In the first six months, the impact on earnings totaled SEK700 million.”
July 2014: The European Commission (EC) has approved restructuring plans for airBaltic (BAU), Adria Airways (ADR), and (SAS) Scandinavian Airlines, ruling that none of the three airlines breached European Union (EU) state aid rules.
(SAS) expanded its seasonal European offering with the launch of 12 new services. With the longest route being the 2,720 km service from Bergen (BGO) to Billund (BLL) served 3x-weekly, and the shortest being inaugurated from Stockholm Arlanda (ARN) to Chania (CHQ) in Greece at 558 km, with 2x-weekly flights (Tuesdays and Thursdays), (SAS) will face competition on eight of the new services from SUN-AIR (SNZ), Norwegian (NWG), TUIfly Nordic (TNS), Primera Air (JTX)/(PRI) and airberlin (BER). The 12 new services are:
Bergen (BGO) to Billund (BLL) 3x weekly, vs (SNZ) 4x;
Copenhagen (CPH) to Chania (CHQ) 2x, vs (NWG) 4x, (TNS) 2x; to Montpellier (MPL) 2x, vs (NWG) 2x; to Pisa (PSA) 2x, vs (NWG) 3x;
Gothenburg (GOT) to Alicante (ALC) 1x, vs (NWG) 2x; to Berlin Tegel (TXL) 2x, vs (BER) 20x;
Oslo Gardermoen (OSL) to (PSA) 2x, vs (NWG)3x;
(ARN) to Bastia (BIA) 1x; to Biarritz (BIQ) 2x; to Bodo (BOO) 2x; to Bristol (BRS) 2x; to (CHQ) 2x, vs (NWG) 4x; (TNS) 2x; (JTX)/(PRI) 1x.
(SAS) continued to expand its seasonal offering with the launch of 19 new routes, all of which were launched between July 1st and 4th. Notably, the average weekly frequency across the new routes is slightly over 1.3. Overall, a total of six new routes will face direct competition with both the 2,129 km sector from Gothenburg (GOT) to Palma de Mallorca (PMI) and the 3,251 km airport pair from Oslo Gardermoen (OSL) to Larnaca (LCA) having been the most contested, by Norwegian (NWG) (3) and TUIfly Nordic (2).
August 2014: (SAS) commenced premium services from Stavanger (SVG) in Norway to Houston Intercontinental, Texas, USA (IAH) on August 20th. The 7,796 km sector between the two major petroleum hubs, will be operated 6x-weekly, using PrivatAir (PTS)’s 44C-Premium seat 737-700.
SEE PHOTO - - "SAS - 2014-08 - 737-700 PREMIUM SERVICE."
No other operator serves this airport pair. (SAS) (a Star (SAL) Alliance member) is also serving the USA market, with flights to New York Newark, Washington Dulles, Chicago O’Hare, and San Francisco. Commenting on the route launch, Rickard Gustafson, President & (CEO), (SAS), said: “The route we have established is a tailored product for a defined market with particular travel needs. The favorable timetable provides excellent connections throughout Scandinavia in both directions, while Houston is a hub for connections to the south and west such as Mexico, Los Angeles, Dallas and Phoenix with the Star (SAL) Alliance.”
(SAS) Scandinavian Airlines announced that Executive VP Human Resources (HR) & Communication, Henriette Fenger Ellekrog will leave the company after her last seven years service, to take up a position as Head of (HR) for the Danske Bank.
(SAS) has reached an agreement to sell four Airbus A330-300s to China’s Bank of Communications for leaseback upon delivery in late 2015 - early 2016.
September 2014: (SAS) Scandinavian Airlines has reported third-quarter net income of +SEK496 million/+$69.8 million, down -44% from SEK886 million in the year-ago period, as yields continue to be affected by overcapacity.
(SAS) President & (CEO), Rickard Gustafson told reporters and analysts: “The market remains challenging and the yield pressure has been severe, pushing our unit revenues down by -7.1% in the quarter. For several quarters in a row, we have seen that the number of seats added to the market is significantly exceeding demand growth.”
Gustafson struck out at budget rival Norwegian Air Shuttle (NWG), in particular, for adding +77,000 seats and a number of additional airplanes to the already strained market.
Revenue for the three-month period from May to July fell -7.7% to SEK10.7 billion, while expenses increased +2.2% to SEK8.9 billion, producing an operating profit of +SEK932 million. This was down -33.5% from a +SEK1.4 billion operating profit in the prior-year quarter.
Quarterly traffic rose +9.6% to 9.3 billion (RPK)s on a +6.4% increase in capacity to 11.4 billion (ASK)s, producing a record-high load factor of 81.9% LF, up +2.4 points year-over-year.
Gustafson said customers have responded positively to the new (SAS) Go and (SAS) Plus products, prompting the traffic and load factor growth. “After a rather weak fall and winter when our load factor was below last year, we have seen a significant uplift since April,” he said.
(SAS)’s passenger numbers and market share increased across the board, with a particularly strong performance in Europe and Scandinavia. However, yield dipped -9.8% to 0.86 cents as (RASK) lowered -7.1% to 0.71 cents, and (CASK) decreased -3.7% to 0.68 cents. (CASK) ex-fuel, was down -2.5%. The majority of the cost savings came from personnel costs.
“Of course, we need to do more,” Gustafson said. “We are stepping up measures to further reduce costs.”
(SAS) has created a new transformation division, sitting alongside Operations and Commercial departments to manage its turnaround. Key areas of focus will be Ground Handling outsourcing, Information Technology (IT), Supply Chain management, Procurement and the future of its Bombardier (BMB) CRJ operator, Blue1 (BLF).
(SAS) is stepping up its use of wet-leased airplanes to trial new routes and minimize seasonal effects as part of a number of measures to achieve another -SEK1 billion in cost savings in 2014 - 2015.
“We have a number of strong partners who are eager to work with us at competitive rates,” (SAS) said. However, (SAS) will continue to use its own fleet for flights over >140 seats.
Next year, (SAS) will take delivery of four Airbus A330s, which have already been financed. “As we take delivery of our new airplanes, we have the option to potentially expand the leases of our current A340 airplanes and therefore open up for long-haul expansion. No formal decision has yet been made, but we are actively assessing different options, both in North America as well as in Northeast Asia,” Gustafson said.
While cautioning that competitive pressures are set to continue, Gustafson maintained his guidance for full-year pre-tax earnings roughly on a par with 2013. Ultimately, it is aiming to achieve an 8% (EBIT) margin.
“The pace of capacity growth is starting to ease off, but we still believe there will be pricing pressure,” he said. “We acknowledge that our earnings level is not where we want it to be yet. We can’t count on an easing in the competitive environment to increase our result. This is why we are making these changes and driving our transformation agenda so hard, because that’s what will be required.”
October 2014: News Item A-1: (SAS) expanded its presence in the German market with the addition of its fifth destination from Oslo Gardermoen (OSL) on October 26th, when it commenced operations to Hamburg (HAM). The 734 km sector to the second largest city in Germany will be served four times weekly until March 27th using a mixed fleet of the Star (SAL) Alliance member’s 123-seat 737-600s, 141-seat 737-700s and 186-seat 737-800s. (SAS) will face direct competition on the new route from germanwings (RFG)’s 12 weekly flights and Norwegian (NWG)’s 3x-weekly operations. (SAS) is also flying to Düsseldorf (6x-weekly), Frankfurt (13x-weekly), Munich (3x-weekly) and Berlin Tegel (4x-weekly) from Gardermoen.
News Item A-2: (SAS) Scandinavian Airlines has ruled out its low-cost carrier (LCC) strategy. (SAS) President & (CEO), Rickard Gustafson has said he will push to make (SAS)’s mainline division more competitive, rather than setting up a low-cost unit.
November 2014: Budget carrier Norwegian Air Shuttle (NWG) and (SAS) Scandinavian Airlines will conduct their first biofuel flights in Norway on November 11.
Two conventional scheduled flights, one operated by each airline, will depart Trondheim and Bergen airports, respectively, to make the relatively short hop to Oslo with 48% biofuel in their tanks.
The heads of the two airlines said they “believe this is the future.”
(SAS) (CEO), Rickard Gustafson said: “(SAS) has been working to speed up commercialization of renewable fuel for more than >10 years now. Even though we in (SAS) have reduced our total CO2 emissions by a full -13% since 2005, biofuel will enable us to reduce those harmful emissions a great deal more as we are heading for a more sustainable aviation industry. This flight is proof that solutions can be found. The next step will be to create the conditions that allow this progress to be realized on a large scale in Scandinavia.”
(NWG) (CEO), Bjørn Kjos said: “Norwegian (NWG) is keen to do everything possible to make aviation more environmentally friendly. (NWG) has a clear objective to reduce our CO2 emissions by -30% per passenger between 2008 and 2015. The most important environmental measure is to have new airplanes, and (NWG)’s fleet is among the newest and most environment-friendly in Europe. New planes are not enough, however. Sustainable biofuel is also important. This flight with biofuel from Bergen to Oslo is therefore an important milestone in the industry’s joint efforts to make sustainable biofuel available to the airlines.”
The initiative for these trial flights was taken by Norwegian airport operator and air navigation services provider Avinor and the environmental foundation "ZERO."
Avinor (CEO) Dag Falk-Petersen explained: “Over the last few years, Avinor has led the Norwegian aviation industry’s investigation of opportunities to produce aviation biofuel from Norwegian timber, and we have deployed considerable resources in this work. We are optimists regarding the process going forward. We’ll continue our collaboration with Norwegian players in the forestry and energy industries and "ZERO." We are on the cusp of what might be a win-win situation for both aviation and traditional land-based industry in Norway.”
Marius Holm, Head of "ZERO," said: “People will still be flying in a future low-emissions society, and so we need to find good, renewable solutions that can replace fossil fuels. The only realistic alternative today is biofuel. Biofuels provide important, new industrial opportunities in Norway. "ZERO" believes policy instruments can be used to introduce renewable fuel at a reasonable cost through differentiation of landing fees, which will create a demand for renewable fuel.”
The fuel that will be used for these flights is a blend of 48% sustainable bio-jet fuel based on used cooking oil, and 52% conventional jet paraffin. The aim is to produce the biofuel for Norwegian aviation from biomass from forests in Norway.
A trio of European airlines has signed an agreement for a regular supply of biofuel at Oslo Airport, which will next year become the world’s first hub airport to receive regular deliveries of biofuel.
(SAS) Scandinavian Airlines, Germany’s Lufthansa Group (which includes Lufthansa (DLH), SWISS (CSR), Austrian Airlines (AUL), Germanwings (RFG), Eurowings and Brussels Airlines (DAT)/(EBA)), (KLM) Royal Dutch Airlines, and Oslo Airport operator Avinor have all signed agreements with Statoil Aviation to supply 2.5 million liters of biofuel over a 12-month period to the refueling facility at Oslo Airport.
Consisting of a 50% biofuel mix, this equates to around 3,000 flights between Oslo and Bergen and makes Oslo the first major airport in the world to offer a regular supply of biofuel as part of daily operations from March 2015. It is also the first time that sustainable biojet fuel will be used in the airport’s hydrant system.
(SAS) and budget carrier Norwegian Air Shuttle (NWG) recently conducted the first biofuel flights in Norway, operating scheduled flights to Oslo from Trondheim and Bergen, respectively, with a 48% mix of biofuel.
(SAS) said it has reduced its total CO2 emissions by around -13% since 2005, and said it is the only airline in Scandinavia with an all-next-generation jet airplane fleet. From next year, (SAS) will begin rolling out even more energy efficient short- and long-haul airplanes, namely the Airbus A330 Enhanced and A320neo, followed by the A350.
(SAS) said it aimed to use synthetic fuel on an increasingly regular basis in the next few years, and expected biofuel to become competitive with the fossil fuel alternative. For this to happen, (SAS) said, “a general environment and tax policy will be required from governments, based on aviation being a form of internationally competitive public transport with thin profit margins.”
While initial biofuel deliveries at Oslo will probably come from used cooking oil, major players in the Norwegian power and forestry industries are now exploring the possibility of forest-based large-scale production of biofuel for aviation in the course of a few short years.
Avinor (CEO), Dag Falk-Petersen said: “It’s not out of the question that we in Norway could achieve large-scale production of sustainable aviation biofuel at a competitive price in 2020.”
There are currently two industrial Norwegian initiatives for production of biofuel and both are looking into the possibility of producing both bio-diesel, for the heavy transport sector, and bio-jet fuel for aviation. It is anticipated that a single biofuel plant would be able to produce enough biojet fuel to reduce greenhouse gas emissions from Norwegian aviation by -10% to -15%. Not only could biofuel production reduce Norway’s greenhouse gas emissions, but it could also increase value creation from the country’s forests. This would, Avinor pointed out, be an “important step towards a sustainable industry in Norway and a shift towards the renewable zero discharge society.”
Marius Holm, head of the environmental foundation "ZERO," said: “This is a good start towards developing a market for aviation bio-fuel. The fact that Avinor is contributing to making Oslo Airport the first hub in the world, where all airlines have the opportunity to use bio-fuel, illustrates that a green change is possible. At the same time, it's important that the authorities step up with policy instruments that promote greater use of biofuel in aviation.”
December 2014: News Item A-1: Scandinavian Airlines (SAS) has added another +SEK2.1 billion/+$273.5 million to its cost savings target after swinging to a -SEK719 million full-year net loss compared with a +SEK1.4 billion prior-year net profit.
Despite the weaker performance, (SAS) (CEO), Rickard Gustafson said he is expecting to deliver “slightly positive” earnings before taxes for the 2014 - 2015 financial year started November 1.
For the year ended October 31, group revenues fell -9.9% year-over-year to SEK38 billion, while unit revenues were down -5.8%. Expenses lowered -4.4% to SEK37.9 billion, triggering a +4% improvement in unit costs. This produced an operating profit of +SEK153 million, down -94.1% from a +SEK2.6 billion profit in the prior year. The bottom line was also depressed by SEK1.3 billion in restructuring costs.
Traffic rose +6.3% to 30.7 billion (RPK)s on a +4.5% increase in capacity to 41 billion (ASK)s, producing a load factor of 74.9% LF, up +1.3 points. Yield dipped -7.4% as (RASK) lowered -5.8% and (CASK) decreased -2.8%. (CASM) ex-fuel was down -2.2%.
Gustafson said unit costs have been cut by -10% since (SAS) hit a crisis point in late 2012. A large part of these savings (around -SEK1.2 billion) came from reduced and outsourced personnel costs; the group’s headcount now stands at 12,329, -17% down on the 14,903 employees it had in 2012.
Other savings came from centralizing and cutting back on administration, new union agreements and pension schemes, the divestment of non-core businesses (including subsidiary carrier Wideroe) and an increased focus on wet-lease capacity.
However, despite having met the SEK3 billion target set in 2012, Gustafson said more action is needed. With that in mind, he announced a further -SEK2.1 billion in cuts for the period 2015 - 2017, firming up and building on a tentative plan for at least SEK 1 billion in savings for 2014 - 2015, which was announced in June.
“We have delivered on our commitment, but the European aviation market is not standing still. It is characterized by low profits and severe competition and that requires us to do even more,” Gustafson said.
This latest cost-cutting drive will affect all areas of the business, including SEK250 million from administration, sales and distribution, SEK200 million from ground handling, SEK250 million from supply chain and logistics, SEK200 million from facilities and rental agreements and SEK300 million from Maintenance.
Gustafson flagged “significant changes” in the industry, such as more flexible flight crew set-ups, outsourcing and the creation of units for specific airplane types. “The industry has developed towards a new norm and we need to reflect that by increasing our flexibility to be competitive. We have initiated discussion with our unions so that, together, we can find a way to navigate towards this new norm,” Gustafson said.
When asked for further information about these talks, Gustafson replied that the European airline industry is moving fast and, to face reality, (SAS) needs greater flexibility in its set-up. He declined to speculate on the outcome of the discussions.
Earlier this month, (SAS) announced plans to acquire Danish regional airline Cimber (STR), rescuing it from closure. However, (SAS) plans to use (STR) as a platform for its own Bombardier CRJ900 operations, so (STR)’s staff and operation will still be disbanded. “Together, the structural changes to Cimber (STR) and Blue1 (BLF) are expected to generate an earnings impact of SEK250 million,” (SAS) said in its end of year report.
News Item A-2: (SAS) begins 4x-weekly, Stockholm Arlanda - Budapest Boeing 737 service on March 29.
Star (SAL) Alliance member, (SAS) Scandinavian Airlines and Abu Dhabi-based Etihad Airways (EHD) are set to begin code share operations between Scandinavia and the United Arab Emirates (UAE).
The agreement, which is subject to regulatory approval, will make (SAS) Etihad (EHD)'s 47th global airline partnership and its 22nd in Europe. For (SAS), Etihad (EHD) is its 23rd code share partner and the third with strong presence in the Middle East.
Both airlines will also develop and sign a frequent flyer agreement for members of Etihad "Guest" and (SAS)’ "EuroBonus" loyalty programs.
“This code share agreement with (SAS) will improve flight connections to Stockholm, Oslo and Copenhagen, as well as a number of important secondary cities across Scandinavia deepening our ties with Europe and European carriers,” (EHD) Chief Strategy Officer, Kevin Knight said.
The deal will see (SAS) place its (SK) code on (EHD) flights between Abu Dhabi and Brussels, Düsseldorf, Frankfurt, Rome, Milan Malpensa, Zurich, Geneva, and London Heathrow.
In turn, (EHD) will place its (EY) code on (SAS)-operated flights from these European destinations, excluding Brussels, onto (SAS) hubs in Copenhagen, Oslo, and Stockholm.
The (EY) code will also be placed on flights beyond Copenhagen to Billund and Ålesund; beyond Oslo to Ålesund, Kristiansand, Trondheim, and Stavanger, and beyond Stockholm to Umeå, Sundsvall and Östersund.
News Item A-3: Scandinavian Airlines (SAS) has announced plans to “reboot” its Blue1 (BLF) subsidiary by replacing its nine Boeing 717s, most likely with 737-600s, and using it as a wet-lease provider.
(SAS) (CEO) Rickard Gustafson said the 717s would be divested by the end of 2015. “The 717 is a bit of an odd bird, creating unnecessary complexity,” Gustafson said.
The 717 also has high unit costs and, under the current plan. The last five 717s will be replaced with 737-600s. Blue1 (BLF) will then be “rebooted” as a wet-lease provider for (SAS).
“(SAS) has reduced capacity at (BLF) by about -40% as a result of the decision to divest four Boeing 717s. The five remaining Boeing 717s will be phased out in 2015,” said (SAS) in its 2013 - 2014 full-year report.
Gustafson said this strategy has been boosted by a new agreement with Blue1 (BLF)’s unions, which makes (BLF) more “effective and competitive.” This includes a provision for grounding airplanes during off-peak periods, which will give (SAS) greater flexibility in its capacity management.
(SAS) also recently announced plans to acquire 100% of Danish regional Cimber (STR), which was set to close in April 2015. Under the deal, (SAS) will transfer its 12 Bombardier CRJ900s to Cimber (STR)’s air operator’s certificate (AOC). (STR)’s staff, its CRJ200s and ATR 72 are all still slated to leave the company.
Since it was nearly pushed to bankruptcy in 2012, (SAS) has slimmed its fleet from nine airplane types down to four. Gustafson described this as a “significant step”. The (SAS) mainline operation will focus on airplanes with 120 seats or more, such as Airbus A320s and 737s, while Blue1 (BLF) and Cimber (STR) will cover lower-capacity operations, supported by (SAS)’ other wet-lease providers, Flybe (BEE) and Jettime (JTM).
Through this model, (SAS) is aiming to right-size its network, support (SAS)’ hub operations, maintain thinner routes and support routes during off-peak times.
Blue1 (BLF) is a Finnish carrier, headquartered in Helsinki, which was founded in 1987 and has been owned by (SAS) since 1998. It also has a hub at Copenhagen airport and serves around 28 regional and international destinations.
News Item A-4: Norwegian Air Shuttle (NWG) has submitted a formal complaint to the European Commission (EC) and (EFTA) Surveillance Authority (ESA) about (SAS) Scandinavian Airlines receiving what it believes is “differential treatment.”
(NWG) said that “discriminatory conditions and licensing practices prevent (NWG) from obtaining access to traffic rights on the same terms as (SAS).” It also believes the differential treatment generates “significant additional costs for (SAS)’ competitors in Scandinavia.”
(NWG) argued this differential treatment is attributed to “grandfather rights,” and the fact that the majority shareholders in (SAS) are the governments of Norway, Sweden, and Denmark.
(NWG) said: “(NWG) has for the past five years on numerous occasions applied for and requested equal treatment and conditions to no avail. Every time, the rejections by the Scandinavian national aviation authorities have been justified by (SAS)’ historically defined conditions and that its majority owners are the governments of Norway, Sweden, and Denmark.”
(NWG) is lobbying for equal access to the same sort of joint air operator’s certificate (AOC) under which (SAS) operates, giving the Scandinavian carrier access to traffic rights both within the (EU) and the European Free Trade Area (EFTA), which includes Norway. (NWG) cannot access those rights because Norway is not a part of the (EU). Those traffic rights would enable it to operate flights between Helsinki and Dubai, for example, or London and Tel Aviv, or Barcelona and Tel Aviv.
“(NWG) recently applied to the authorities to get access to these routes, but was denied because the airline does not hold an (EU) (AOC),” (NWG) said. It argued it had not filed a formal complaint to the European authorities before now because it hoped Scandinavian aviation authorities would create an equal set of rules for all the companies operating in the same market. (NWG) said the European Aviation Safety Agency (EASA) had also criticized the preferential treatment of (SAS), concluding that it was in breach of European law.
(NWG) claimed (EASA) has “on numerous occasions over the past years stated that (SAS)’ special treatment and ‘multi-country’-(AOC) is not in accordance with the requirement of a ‘principal place of business’ under current (EU) regulations. Based on an approved (AOC), an airline is granted an operating license in the country where it has its ‘principal place of business’ and it is the civil aviation authorities in that country that shall conduct and be responsible for performing the safety supervision.”
(SAS) can use airplanes registered in Norway, Sweden, and Denmark seamlessly without approval, notwithstanding place of registry, unlike its competitors. (NWG) claims that the Scandinavian aviation authorities “have established and continued a special treatment in favor of (SAS), that is not in accordance with (EASA) rules and regulations.”
Scandinavian Airlines (SAS) will add a new Stockholm - Hong Kong service in 2015, as part of its cautious capacity growth plan, and is unconcerned about Norwegian (NWG)’s recent discrimination claim.
News Item A-5: The European Commission (EC)'s new Transportation Commissioner, Violeta Bulc is taking major strides toward uniting the region's fragmented Air Traffic Management (ATM) system, making €3 billion/$3.7 billion in new funding available to help move the Single European Sky (SES) airspace reform project forward. The (EC) tasked a group or Air Navigation Service Providers (ANSPs), airports and airlines to jointly serve as the Single European Sky (ATM) Research (SESAR) program Deployment Alliance to use the new funding to implement common airspace modernization projects.
European operators, such as Scandinavian Airlines (SAS), want the new alliance to use the new funding to invest in (ATM) infrastructure that will allow them to take advantage of the on board avionics that they've invested in for their airplanes, (SAS) Manager Operational Regulatory Affairs & (ATM) Jan Eriksson said.
"(SAS) considers the agreement with the (SESAR) Deployment Alliance (SDA) consortium (ie the Deployment Manager) to be a big step in the right direction to establish a Single European Sky, especially if the (EU) makes $3.7 billion/€3 billion available in funding," said Eriksson. "(SESAR JU) should spend resources to support the (EC) to finalize the data link and surveillance mandates. Airspace users have invested in on board equipment, and it is important that they get a return on these investments."
The biggest goal of the (SES) project is to reduce the (EU)'s fragmented air traffic system. Currently, Europe features 29 different zones of major Air Traffic Control (ATC) centers, forcing pilots (FC) to fly routes that are much longer and less direct because they're constantly changing centers, which affect their flight profile, based on procedures and instructions from each center. Under the Functional Airspace Blocks (FABs) aspect of the program, the total number of national (ATC) centers would be reduced from 29 to nine.
Another major goal for (SES) deployment is the Pilot Common Project, which identifies six (ATM) functionalities, including extended arrival management and Performance Based Navigation (PBN) in the high density terminal maneuvering areas; airport integration and throughput; flexible airspace management and free route airspace; network collaborative management; initial System Wide Information Management (SWIM); and initial trajectory information sharing.
Overall, the (SES) program, now entering its 10th year, has been delayed, which affects the deployment of (ATM) infrastructure to support Controller Pilot Data Link Communications (CPDLC), as mentioned by Eriksson. Originally, Europe had mandated legacy airplanes flying above >28,500 feet in European airspace to be retrofitted with (CPDLC) avionics by February 2015. However, technical difficulties have delayed the finalization of that mandate, despite (SAS) and other operators investing millions in new on board equipment.
One way that the new alliance can ensure that the Pilot Common Project moves forward, is to use a significant portion of the new funding to support operators' investment in new technology and procedures, according to Eriksson. "In order to realize the Pilot Common Project and the six proposed technological deployments (ATM functionalities), funding should be directed to the airspace users, where needed as these operate in a competitive market which is not applicable to the Air Navigation Service Providers," he said.
Membership within the new alliance should allow them to do exactly what (SAS) and other airlines are seeking. Among the members is the A6 Deployment Manager Alliance, featuring five (ANSP)s: (DFS) (Germany), (DSNA) (France), (ENAIRE) (Spain), (ENAV) (Italy) and (NATS) (UK). Collectively, they manage more than >70% of the more than >27,000 flights that pass through European skies daily.
Also featured within the new alliance is the A4 Airlines (A4A) group, which includes Air France (AFA) - (KLM), EasyJet (EZY), the (IAG) and the Lufthansa (DLH) Group. Their mission under the alliance is to help accelerate operational improvements in (ATM), providing an airline perspective as new infrastructure and flight procedures are implemented.
The (SESAR)-related Deployment Airport Group (SDAG) includes a group of 25 airports among those represented by the Airports Council International that are within the scope of the Pilot Common Project.
As 2014 comes to an end, Bulc and the (EC) are looking for the new funding to lead to major progress with the deployment phase of the (SES) project in 2015, leading the region's air traffic system to reflect the unified structure that the USA uses. As the (EC) notes, "the USA air traffic management system is twice as efficient as that of the (EU); it manages double the number of flights for a similar cost from a third as many control [centers]."
News Item A-6: Scandinavian Airlines (SAS) has secured a pre-delivery payment (PDP) financing facility covering a percentage of the pre-delivery payments that (SAS) is making as part of its current airplane order with Airbus (EDS).
The (PDP) facility covers payments in relation to two Airbus A330-300 Enhanced and six Airbus A320neo airplanes and is structured as a revolving credit facility under which (SAS) may draw up to $74 million in total, with a maximum of $54 million outstanding at any time. These loans will be repaid as each airplane is delivered to (SAS). (DVB) Bank (SE) is the sole arranger and financier of the facility.
“We are very pleased to have signed an agreement that secures (PDP) financing for the first two new long haul airplanes and for the first phase of our A320neo order,” (SAS) Group Executive VP & (CFO), Göran Jansson said. “The agreement reflects the strong working relationship we have with (DVB) and confirms the investor appetite for the airplanes we have on order.”
The airplanes will be delivered during the latter part of 2015 through to the early part of 2017.
January 2015: (SAS) Scandinavian Airlines has signed a multi-year, full content agreement with Travelport. The agreement is for Travelport’s 67,000 travel agents to use its Rich Content and Branding in selling (SAS) market and products. It is designed to allow partner airlines and other travel content suppliers to use technology to drive sales of core products and ancillary offerings. (SAS) has also signed to make paid seating a key ancillary service, available through Travelport’s Commerce Platform. This service allows agents to book paid seats with options such as extra legroom. Travelport reported 85 customers have signed up to Rich Content and Branding.
February 2015: News Item A-1: (SAS) continues to expand seasonally with a new service from Gothenburg (GOT) to Geneva (GVA) on January 31st. The 1,339 km sector will be served weekly (Saturdays) until March 21st, utilizing the Star (SAL) Alliance member’s 186Y-seat 737-800s. SWISS (CSR) provides direct competition on the new sector also operating a weekly, Saturday service. For (SAS), this is its 4th international route from Gothenburg this winter joining Copenhagen (34 weekly flights), London Heathrow (LHR) (11 weekly flights), and Malaga (weekly flights). Although (SAS) is the biggest carrier at Gothenburg, its services only account for just over >20% of the airport’s weekly seat capacity. Apart from Gothenburg, (SAS) also serves Geneva from Copenhagen (15x-weekly flights), Stockholm Arlanda (8x-weekly flights) and Oslo (3x-weekly flights).
News Item A-2: Scandinavian Airlines (SAS) has sold one of its 21 London Heathrow (LHR) Airport slot pairs to an unnamed “major international carrier” for $60 million. “The intention is to keep the seat capacity to/from (LHR) through the use of larger airplanes on remaining departures. Furthermore, (SAS) will consider the use of other airports in the London-region,” (SAS) said. (SAS) currently flies from Heathrow to Copenhagen, Gothenburg, Oslo, Stockholm, and Stavanger.
(SAS) has 21 slot pairs at capacity-restricted (LHR), making it the airport’s fifth largest carrier by number of departures. After the transfer, which takes effect on March 29, (SAS)’ holding will be slimmed to 20 daily pairs.
“The transaction will generate a positive earnings impact of the equivalent of $60 million for (SAS) to be accounted for during the second quarter of the fiscal year 2014/2015 with a corresponding cash effect during the fiscal year 2014/2015,” (SAS) said.
Over recent months, Virgin Atlantic (VAA) has said it was looking to lease out two of its (LHR) slot pairs, while now-defunct Cyprus Airways (CYP) missed out on a deal to sell some of its slots to Qatar Airways (QTA).
News Item A-3: Scandinavian Airlines (SAS) is in the final stages of acquiring Danish regional carrier Cimber (STR) for DKK20 million/$3 million, after receiving approval from the Danish Competition and Consumer Authority.
(SAS) President & (CEO), Rickard Gustafson said: “With formal approval now in place, we look forward to making rapid progress in establishing the company as an efficient airline specializing in regional air traffic. We will build a simple, focused and flexible organization that is able to deliver (SAS)’s well-known product to our customers with punctuality, service and many departures.”
News Item A-4: (SAS) has appointed Kent Hansen as the new President of Cimber (STR), succeeding the current President, on March 1. Hansen is currently head of division at the Danish Transport Authority’s Center for Aviation. His appointment as accountable manager is dependent on approval from relevant authorities.
(SAS) has also appointed Kjetil Grønevik as Finance Director. (SAS) appointed Lars Sandahl Sørensen as Group Director & (COO). Sørensen was previously Group Director & (CCO) of global services company (ISS). He previously worked for (SAS) from 2003 to 2010.
News Item A-5: Under terms of the acquisition, (SAS) will transfer 12 Bombardier CRJ900s to Cimber (STR), with the transfer due for completion March 1.
March 2015: News Item A-1: Scandinavian Airlines (SAS) reported a first-quarter net loss of -SEK640 million/-$75.5 million), widened -82.5% from a -SEK112 million loss in the year-ago period.
(SAS) President & (CEO), Rickard Gustafson said the first quarter was traditionally the weakest. He stressed that losses before tax and non-recurring items had narrowed from -SEK1.2 billion to -SEK829 million and that unit revenue had risen +6.7% against the year-ago period.
For the three months ended in January 2015, revenue rose +6.4% to SEK8.4 billion, but costs went up, producing an operating loss of -SEK657 million. This marks a sharp swing from the +SEK132 million operating profit (SAS) posted in the prior-year quarter.
“Our unit cost increased during the first quarter when we reduced capacity to adapt to demand. This confirms the need to continue to increase cost base flexibility and further reduce costs. We have commenced the implementation of the cost measures presented earlier, which will extend across the entire organization and generate an overall earnings impact of SEK 2.1 billion with full effect in 2017,” Gustafson said.
Traffic rose +3.2% to 5.9 billion (RPK)s on a +0.6% increase in capacity to 8.5 billion (ASK)s, producing a load factor of 68.8% LF, up +2.5 points. Yield rose +2.7% to SEK1.07 as (RASK) increased +6.7% to SEK0.74 and (CASK) increased +1.7% to SEK0.91. Ex-fuel (CASK) rose +2.9%.
During the quarter, (SAS) began implementing the SEK2.1 billion savings plan it announced in December 2014. “The initiated cost measures are progressing according to plan and are expected to generate positive earnings impact for (SAS) totaling approximately SEK1 billion in 2014/2015,” Gustafson said.
(SAS) has given a cautious guidance for the 2014/2015 fiscal year, saying only that “the potential exists” for a positive (EBT) before tax and non-recurring items. Throughout the year, it plans to cut capacity by -1 to -2% and deliver a +SEK 1.3 billion positive earnings impact from its savings measures.
News Item A-2: Scandinavian Airlines (SAS) estimates that a five-day walkout over plans to transfer regional jet cabin crew (CA) to newly acquired Cimber (STR) will set it back -SEK50 million/-$5.8 million.
“On February 24 and between February 27 and March 2, (SAS) cancelled 334 flights to/from Copenhagen due to work stoppages, in breach of contract, by parts of (SAS)’s cabin crew (CA). This is expected to have a negative impact on earnings of -SEK50 million,” (SAS) said at the release of its first-quarter results.
In December, (SAS) detailed plans to fully acquire Danish regional Cimber (STR), its long-term wet-lease supplier, for DKK 20 million/$3.3 million. Sønderborg-headquartered Cimber (STR)’s own operations (which were slated to close in April 2015) were discontinued and (SAS) transferred its 12 Bombardier CRJ900s to (STR) on March 1. The 12 CRJs were previously operating on (SAS) mainline’s air operator’s certificate (AOC) out of Copenhagen.
“(SAS) has no plans to move other airplanes than 12 CRJs into the company Cimber (STR),” (SAS) said.
Members of the (CAU) cabin crew union, protesting against their transfer to Cimber (STR), staged a walkout in late February and early March. (SAS) tried repeatedly to get the cabin crew (CA) to return to work, insisting they would be employed on the same terms, but (STR) said the (CAU) broke off negotiations, missed several deadlines and ignored every kind of escalation aimed at halting the walkout.
Ultimately, (SAS) secured a labor court injunction and threatened to terminate the contracts of any workers not reporting for duty, forcing the end of the strike.
(CAU) said 27 of its members remain suspended after the walkout. “We have repeatedly asked (SAS) to provide evidence that would warrant suspensions, but we have seen nothing,” the union said. The union has taken the case to the Danish Employers’ Association and has warned that (SAS) could be fined over the suspensions.
The new set-up comes in response to new industry standards (including contract employment, self-employment and staffing agencies) which (SAS) said has “radically” changed competitive conditions.
“The acquisition of Cimber (STR) has been completed and will comprise the basis for (SAS)’s regional jet production. In (SAS)’s production model, the majority of traffic for the larger traffic flows will be produced under (SAS)’s own traffic license, while smaller flows will be managed through internal and external wet leases. The production model will provide (SAS) with scope to adapt production to seasonal variations and demand,” (SAS) said.
Beyond the 12 in-house CRJ900s, (SAS) also has regional flying contacts with in-house carrier Blue 1 (BLF), Braathens (BRT), Flybe (BEE), Jet Time (JTM) and Wideroe) in which (SAS) recently sold part of its stake.
April 2015: (SAS) Scandinavian Airlines is updating its customer service app to support the new "Apple Watch." Activities that are carried out on a phone, will also be displayed on the Apple Watch, such as gate and departure time.
May 2015: News Item A-1: Scandinavian Airlines (SAS) will increase services between Scandinavia and New York from the start of its winter season in late October.
The tri-nation airline operates daily services between the Scandinavian capitals over the summer, but this has previously been cut for Oslo and Stockholm departures during the winter months. From this October, however, daily services will be retained.
(SAS) said New York is one of its most popular destinations and it is seeing increasing interest from passengers, partly due to other carriers reducing services over the winter period. “We find that there is a growing interest and demand from our frequent travelers on existing and future intercontinental destinations,” said (SAS) Commercial Director, Eivind Roald. (SAS)’s increased frequencies to New York are one reaction to this demand and (SAS) is studying other “interesting options,” he said.
The steady refurbishment of cabins on its long-haul fleet is also contributing to improved demand, he said. New seats, in-flight entertainment and Wi-Fi are among features being installed. “Our remodeled airplanes have been well received among our customers and we will continue at a high rate of renewing all our long-haul aircraft, said Roald. (SAS) will also take delivery of its new Airbus A330 Advanced models in August.
(SAS) also said it needs more pilots (FC)and cabin crew (CA); (SAS) employees at its regional offshoot Cimber (STR) will have priority for the new slots. This, in turn, will lead to the recruitment of around 20 new pilots (FC) and 80 new cabin crew (CA) at the Danish regional in the next six months. Initial job offers have already been made to (SAS) personnel at Cimber (STR) (who objected when they were transferred to the regional earlier this year) and many have accepted, (SAS) said.
News Item A-2: Scandinavian Airlines System (SAS) has signed a new collective bargaining agreement with its pilots (FC), represented by Sweden’s (SPF) union, averting industrial action. (SAS) has now reached agreement with three of four pilot (FC) unions.
(SAS) said it needed to “adapt the collective bargaining agreements to today’s competitive environment” so it could invest in new airplanes, destinations, and services in line with customer demand.
(SAS) President & (CEO), Rickard Gustafson said: “I value the experienced and skilled pilots (FC) we have at (SAS); therefore, we will continue to have collective bargain agreements according to the Scandinavian model.”
(SPF) Chairman, Peter Larsson said it had been “a very long process,” but “we are now satisfied with the new agreement, which will secure job opportunities for our members. We have together (after a tough negotiation) agreed on a solution.”
The new two-year agreement comes into force May 21.
In anticipation of strike action, (SAS) had canceled a limited number of flights to avoid travelers getting stranded, but now expects operations to return quickly to normal.
News Item A-3: (SAS) Scandinavian Airlines has agreed a new one-year collective bargaining agreement with Norwegian pilots’ union (NSF), back-dated to April 1, ending seven days of strike action.
“The negotiations have reached its objective after a strike that lasted for seven days and involved 17 pilots (FC),” (SAS) said. The deal remains subject to a union vote.
Talks between the airline and its union focused on job security, cutting complexity and enabling (SAS) to react faster to market demand. “The negotiations are also a proof that we, together with the pilot (fc) unions, jointly have taken responsibility for securing Scandinavian jobs and a future for pilots (FC) at (SAS),” (SAS) President & (CEO), Rickard Gustafson said.
This latest deal means (SAS) has now struck collective bargain agreements agreement with all four of its pilots (FC)’s unions, laying the foundations for future investment and expansion.
737-783 (30191, LN-RRN), leased delivery.
June 2015: News Item A-1: (SAS) Scandinavian Airlines, which last month approved the last of four collective bargaining agreements with all four pilot (FC) unions, is still finalizing details on seniority status.
News Item A-2: (SAS) is offering 11 new destinations in its summer schedule, including Stockholm - Hong Kong, Copenhagen - Ankara, and Oslo - Salzburg.
July 2015: (SAS) began operations on July 1 between Gothenburg (GOT) and Gazipasa (GZP), a 2,794 km sector that will operate weekly on Wednesdays, and faces no direct competition. On July 2, (SAS) began services between Stockholm Arlanda (ARN) and Ankara (ESB). The capital cities of both Sweden and Turkey will be connected with a weekly flight that will operate each Thursday, also not facing any competition.
August 2015: News Item A-1: Scandinavian Airlines (SAS) (which announced plans in December 2014 to “reboot” its Blue1 (BLF) subsidiary by replacing its nine Boeing 717s with 737-600s from its mainline fleet) is now rethinking the plan. (SAS) had also planned to transform (BLF) to a role as a wet-lease operator for the parent company, operating lower-capacity routes and providing backup for (SAS)’s mainline operations.
“(SAS) is currently phasing out Blue1 (BLF)’s fleet of Boeing 717s, which will simplify the company’s operations and fleet further,” (SAS) Corporate Communications Manager, Cathrine Sandegren said.
“We are reviewing various options to replace this capacity and will return as soon as more information is available.”
Blue1 (BLF) is one of the very few European airlines using the 717. A year ago, (BLF) had nine 717s (four have already been sold to Spanish budget carrier Volotea, with a further two due to join them this fall). The remaining three airplanes are understood to be moving to Delta Air Lines (DAL).
News Item A-2: (SAS) Scandinavian Airlines has appointed Mattias Forsberg as Executive VP & Chief Information Officer (CIO) - Information Technology (IT) & Digital Innovation. Forsberg has been (CIO) at Systembolaget since 2011, and previously was (IT) Director at (B&B) Tools, and worked in (IT) strategy at Accenture between 1998 and 2008.
September 2015: News Item A-1: (SAS) Scandinavian Airlines has reported a net profit of +SEK439 million/+$52 million for the first nine months of its financial year, reversed from a net loss of -SEK416 million for the year-ago period. Revenue rose +6.3% to SEK28.7 billion, up from SEK27 billion last time.
The improved financial performance is the result of a combination of improved passenger flows and cost-cutting measures increasingly worked through to the bottom line.
(SAS)’s third quarter, covering the early part of the summer, resulted in positive income before tax and non-recurring items of +SEK996 million, (SAS) President & (CEO), Rickard Gustafson said.
(SAS) is a European airline that has suffered considerably from the rise of low-cost carriers (LCC)s, notably Norwegian Air Shuttle (NWG), in recent years. “(SAS)’s clear focus on Scandinavia’s frequent travelers is generating results and we now have more than >4 million EuroBonus [loyalty program] members,” Gustafson said. “We have noted substantial demand from our frequent travelers for flights to the USA, and in 2016 we are expanding with three new routes: Los Angeles - Stockholm, Miami - Oslo, and Miami - Copenhagen.
“At the beginning of September, we are also opening a new direct route between Stockholm and Hong Kong, which will be operated with (SAS)’s first new Airbus A330 Enhanced,” he said. “In parallel with advancing our positions in our target group, we are continuing the implementation of the cost measures that will generate an overall earnings impact of SEK2.1 billion, with full effect in 2017.”
Unit revenue (PASK) for the nine months increased +5.5%, while unit cost (CASK) increased +3.3%. Both figures are currency-adjusted and the cost figure excludes fuel.
(SAS) said it has achieved particular success with its EuroBonus program, which was relaunched two years ago and has been increasing its members by an average of 50,000 monthly since then.
News Item A-2: (SAS) Scandinavian Airlines will close its Stavanger - Houston, aka oil route, on October 23 due to decreased demand and passenger loads resulting from reduced activity in the oil industry.
“The oil route came out of creative and constructive product development between (SAS) and our core clients in the oil industry; however, we have had to accept that the downturn in the industry unfortunately is also impacting us. Hence our decision to switch the airplane to Copenhagen - New York Newark, where the market offers far more potential right now,” Executive VP Commercial, Eivind Roald said.
The oil route is operated by PrivatAir (PTS) on behalf of (SAS) with a Boeing 737 business jet that, up until the end of the year, will be configured with only 44C business seats. The airplane will then be reconfigured with 20C business seats and 66Y economy class seats.
(SAS), the Star (SAL) Alliance member will increase capacity +20% on Stavanger - Copenhagen (Kastrup) service by switching aircraft type from Bombardier CRJ900s to Airbus 320s and A321s on several departures.
Separately, (SAS) announced it will launch three North-Atlantic routes in 2016, adding +330,000 seats to its international network. The new routes are Stockholm - Los Angeles, Oslo - Miami and Copenhagen - Miami. (SAS) is also increasing the number of departures from Stockholm to New York Newark and Chicago.
AS commenced operations between Stockholm Arlanda (ARN) and Hong Kong (HKG) on September 10. The 8,203 km sector will be flown 5x-weekly using a mixture of (SAS)’ A330-300s and A340-300s. The route will not face any direct competition. Flights will depart from Arlanda at 1500, with an arrival time in Hong Kong of 0720 the next day. The return flight leaves Hong Kong at 0905 and arrives back in Sweden at 1435 the same day.
News Item A-3: (SAS) Scandinavian Airlines has become the first European carrier to deploy the 242-tonne maximum take off weight (MTOW) Airbus A330-300 Enhanced. Its initial flight took place on September 21 from Copenhagen to Chicago.
(SAS) will take delivery of four of the new variant over the next eight months, with the second aircraft being delivered later this month and the remaining two in February and May 2016. The next routes to be served by the new aircraft will be Stockholm - Chicago and Stockholm - Hong Kong.
The Enhanced offers an extra +800 km range over the 9,600 km of earlier A330s.
The carrier also plans to introduce the A350-900 from 2018, to strengthen its long-haul fleet and replace less efficient Airbus A340-300s.
(SAS) will operate the A330-300 Enhanced in a three-class, 262-seat configuration with 32C business class, 56PY premium economy and 174Y economy seats.
The aircraft will feature a new cabin that will also be introduced to existing long-haul fleet aircraft throughout this year and 2016. Passengers in the business (C) class cabin have direct aisle access and lie-flat seats. Mood lighting and a new in-flight entertainment system have also been introduced, with the latter offering high-definition screens and wireless Internet access.
News Item A-4: Technology specialist (WIN) is expanding its e-booking system to connect independent forwarders to 16 airlines. (WIN) already connects to over 90 airlines for electronic Air Waybill (e-AWB). The carriers available for e-bookings include British Airways (BAB), Iberia (IBE), Etihad Airways (EHD), (SAS), Singapore Airlines (SIA), Jet Airways (JPL), Swiss (CSR), American Airlines (AAL), Air France (AFA), Finnair (FIN), Korean Air (KAL), (KLM), Lufthansa (DLH), United Airlines (UAL), Emirates (EAD), and Gulf Air (GUL). The all-in-one tool includes the ability for customers to look up flight schedules, create and manage bookings in real-time, transmit (e-AWB) data, and receive full (e-AWB) tracking automatically.
October 2015: News Item A-1: "Scandinavian Airlines Targets Long-haul Growth in 2016; Many New USA Services Confirmed; Gothenburg Airport is Fastest-growing Presence" by www.anna.aero October 14, 2015.
Operating on the far north of Europe, and obliged for political reasons to operate three separate hubs within 600 km of each other, (SAS) is by most measures one of Europe’s top 10 airlines, carrying over >27 million passengers in 2014. However, (SAS), the Star (SAL) Alliance carrier has struggled financially in recent years and came very close to collapse in late 2012. Since then, things have improved, thanks to a major cost-cutting program and the fortuitous fall in the price of fuel, so much so, that (SAS) has even reported a positive 3% operating margin for its most recent 12-month accounting period (to July 2015).
As the national carrier for all three Scandinavian countries (Denmark, Norway, and Sweden) (SAS)’ three biggest bases are also the capital cities of those countries. The next busiest airports (Bergen and Stavanger) are both in Norway, helping to make it (SAS)’s leading country market for weekly seat capacity, ahead of Denmark, Sweden, UK, Germany, and Spain. The leading non-Scandinavian airports (shown in bright green) are led by London Heathrow (LHR) in sixth place.
Capacity changes at (SAS)’s top dozen airports has been within plus or minus 5% with the exception of Trondheim (down -9%), Stockholm Arlanda (up nearly +7%), and Gothenburg (up almost +20%). (SAS)’ growth in Gothenburg may be related to the benefits of competition from Ryanair (RYR), which has moved to the bigger airport, and upgraded it to a designated base, following the closure of the city’s downtown airport to commercial services. Dublin features among (SAS)’ recent route launches, definitely a challenge to (RYR)!
* Stockholm growing, Copenhagen and Oslo stagnate in 2015.
Analysis of monthly capacity (ASK)s at (SAS)’s three main bases shows that on the whole, (SAS) has continued to add capacity to its network. In 2015, Stockholm has seen a +8% increase in its annual (ASK)s compared with 2014, while both Copenhagen and Oslo have seen very small reductions. In 2014, the opposite had been true, with Copenhagen and Oslo both growing faster than Stockholm.
(SAS) grew the number of airports served from 87 to 109, while increasing the number of routes flown from around 150 to over >230. (SAS)’ most recent quarterly presentation highlights this in a different way, pointing out that between July 2011 and July 2015, (SAS) increased the number of international routes (to outside Scandinavia) by 62%, from 112 to 181. Across the same period aircraft utilization improved by 29%.
Stockholm’s sudden (ASK) growth towards the end of 2015 can partly be explained by the launch in September of a new long-haul, wide body service to Hong Kong using the airline’s latest A330s.
* Distinct seasonality profile.
While most European airlines and airports see a peak in demand during the main summer months of July and August, the Scandinavian market is somewhat different. With a typically higher proportion of business traffic during most of the year, demand actually falls away during the summer holiday period of July and August, even though that is typically when Scandinavians (like their Northern European colleagues in the UK and Germany) head south for guaranteed sunshine.
Dealing with seasonality is a major issue faced by most airlines and (SAS)’ monthly seat capacity for the last two years reveals that (SAS) has managed to reduce seasonality at its Copenhagen and Oslo bases, but not in Stockholm.
* USA expansion driven by Norwegian (NWG(NAI) threat?
Long-haul flying is set to grow in 2016 with the commencement of a new daily Stockholm to Los Angeles service starting in March, followed by new services to Miami from both Copenhagen and Oslo, starting in autumn 2016. In addition, there are increased frequencies this winter on routes to Chicago, New York, San Francisco, and Shanghai. However, the service operated on (SAS)’s behalf by Privatair (PTS) between the oil cities of Stavanger and Houston, will end in a couple of weeks at the end of the summer season. Instead, the 737-700 will be re-configured from a 44C-seat all-business class layout to a two-class 86-seat layout (with 20C business class seats and 66Y economy seats) and will be used to start a new daily service between Copenhagen and Boston from the end of March 2016. Coincidentally, or not, this is a route that Norwegian (NWG)/(NAI) plans to start operating with its 787-8s next May. Between the end of October and next March, these airplanes will be used to provide some of the capacity on (SAS)’s existing Copenhagen - Newark service.
* Over 90 new routes launched since 2011.
Analysing Official Airlines Guide (OAG) schedule data for the first week of August in both 2011 and 2015 reveals that (SAS) operates over >90 routes this summer that it did not four years ago. However, it has also dropped around a dozen routes that it did serve in August 2011, including four routes to Madrid, Bergen to London Gatwick, and Copenhagen services to Lyon. Some of these new services operate at low frequency for just a few weeks during the peaks summer holiday season.
AIRPORT: - - - ROUTE (CODE)
Copenhagen (CPH): - - - Alicante (ALC), Ankara (ESB), Biarritz (BIQ), Billund (BLL), Budapest (BUD), Chania (CHQ), Dubrovnik (DBV), Edinburgh (EDI), Gazipasa (GZP), Linkoping (LPI), Malaga (AGP), Montpellier (MPL), Naples (NAP), Newcastle (NCL), Palermo (PMO), Palma de Mallorca (PMI), Pisa (PSA), Prague (PRG), Pula (PUY), San Francisco (SFO), Shanghai (PVG), Split (SPU), Tel Aviv (TLV), Thessaloniki (SKG), Trondheim (TRD), Wroclaw (WRO)
Oslo (OSL): - - - Aberdeen (ABZ), Athens (ATH), Berlin (TXL), Billund (BLL), Chania (CHQ), Edinburgh (EDI), Gazipasa (GZP), Pisa (PSA), Pristina (PRN), Pula (PUY), Salzburg (SZG), Santorini (JTR)
Stockholm (ARN): - - - Aalborg (AAL), Alicante (ALC), Ankara (ESB), Barcelona (BCN), Berlin (TXL), Biarritz (BIQ), Billund (BLL), Bodo (BOO), Bologna (BLQ), Bristol (BRS), Cagliari (CAG), Chania (CHQ), Dubrovnik (DBV), Faro (FAO), Gazipasa (GZP), Hamburg (HAM), Kalmar (KLR), Malaga (AGP), Milan Malpensa (MXP), Olbia (OLB), Palermo (PMO), Prague (PRG), Pristina (PRN), Pisa (PSA), Pula (PUY), Riga (RIX), Tampere (TMP), Thessaloniki (SKG), Turku (TKU), Vaasa (VAA), Vilnius (VNO)
Gothenburg (GOT): - - - Alicante (ALC), Athens (ATH), Berlin (TXL), Dublin (DUB), Gazipasa (GZP), Malaga (AGP), Nice (NCE), Palma de Mallorca (PMI), Pristina (PRN), Pula (PUY)
Bergen (BGO): - - - Barcelona (BCN), Gazipasa (GZP), Malaga (AGP), Split (SPU)
Trondheim (TRD): - - - Copenhagen (CPH), Malaga (AGP), Stavanger (SVG)
Stavanger (SVG): - - - Barcelona (BCN), Gazipasa (GZP), Split (SPU), Trondheim (TRD)
Billund (BLL): - - - Copenhagen (CPH), Gazipasa (GZP), Oslo (OSL), Stockholm (ARN)
Further route expansion for this winter includes the launch of Brussels and Paris (CDG) flights from Gothenburg, plus the re-allocation of Gothenburg - London Heathrow flights to London Stansted. There will also be a new service from Oslo to Vilnius. Apart from the new long-haul services previously mentioned, next summer will see the addition of new services from Stockholm to Munich and from Copenhagen to Faro, Krakow, Reykjavik/Keflavik, and Vienna.
News Item A-2: (SAS) Scandinavian Airlines is to sell its Blue1 (BLF) subsidiary to CityJet of Ireland in a further move to outsource its services on regional and thinner routes.
(SAS) recently announced that UK regional carrier, Flybe (BEE) would be taking over a tranche of its regional services.
CityJet will acquire 100% of Blue1 (BLF)’s shares for an undisclosed sum and the Finland-based carrier’s name will disappear. Dublin-based CityJet currently has a small network of destinations in Western Europe.
“(SAS)’s strategy is to offer frequent travelers a broad network with frequent flights to, from and within Scandinavia,” said (SAS) October 1. “To adapt the size of the production to traffic flows, (SAS) utilizes hired capacity with smaller regional jet and turboprop aircraft.”
The new arrangement will begin from the start of the summer 2016 program, with CityJet operating “basically on existing routes. This is part of our strategy to have regional operators operating thinner routes to make them profitable.” As well as Flybe (BEE), Danish carrier Jet Time (JTM) also flies for (SAS).
The sale of (BLF) would have a “marginal impact” on (SAS)’s income before tax, cash and net debt, said (SAS). Income after tax during (Q4) 2014/2015 would be negatively impacted by around SEK90 million/$11 million, primarily due to write down of capitalized loss carry-forwards. The sale and the new wet lease agreement are expected to increase cost efficiency and flexibility.
As part of the agreement, CityJet will acquire eight new Bombardier (BMB) CRJ900 regional jets, with the aircraft being wet-leased to (SAS) and operating in the Scandinavian carrier’s colors. The wet-lease agreement will run for three years, and contains an option for the acquisition of a further six aircraft.
CityJet has been looking for a replacement for its fleet of 18 Avro RJ85 regional jets for some time. The new CRJs, in a high-density 90-seat configuration, will be put into service from March 2016 “on routes and at times, when there is a need for smaller aircraft.”
(SAS) already operates 12 CRJ900s through its Danish subsidiary, Cimber. “We are looking forward to working with CityJet to further expand our regional route network and thereby strengthen (SAS)’s offering to frequent travelers. The eight brand new CRJ900s from CityJet will provide us with efficient and flexible production of regional flights that will complement (SAS)’s production on the larger traffic flows,” said (SAS) President & (CEO), Rickard Gustafson.
News Item A-3: Revima (APU) has signed a long-term auxiliary power unit (APU) support contract for (APU)s on Scandinavian Airlines (SAS)’ Airbus A320s.
Notice Item A-4: SR Technics (SWS) has secured an order from Scandinavian Airlines (SAS) for four wide body cabin modifications.
November 2015: News Item A-1: (SAS) Scandinavian Airlines begins daily, Copenhagen - Boston service in March 2016 with 86-seat 737-700 BBJs.
News Item A-2: ST Aerospace had revenue of S$507 million/$355 million in the third quarter of 2015, up +7% from the same period of 2014. Shareholder profit was +S$51.4 million, up +11%. Airframe work was S$228 million, down -7%, and component and engine revenue S$192 million, up +33%. Asia brought in S$314 million, up +13%, the USA S$117 million, down -16%, and Europe S$36 million, up +9%. And ST Aero has sealed an eight-year contract worth S$35 million with (SAS) Scandinavian Airlines. The Maintenance Repair & Overhaul (MRO) will provide landing-gear maintenance and exchange services for (SAS) ’s Boeing 737s and Bombardier CRJ900s. Also, parent, Singapore Technologies Engineering has appointed Lim Ah Doo independent Non-Executive Director of the company.
December 2015: News Item A-1: (SAS) Scandinavian Airlines reported +SEK956 million/+$111.8 million net profit in its fiscal 2014 - 2015 year, reversing its -SEK719 million (FY) 2013 - 2014 net loss.
For (SAS)’s financial year, which runs from November 2014 through October 2015, (SAS) reported full-year revenue of SEK39.65 billion, up +4.3% year-over-year (YOY). (SAS’)s full-year operating income was +SEK2.23 billion, compared to +SEK153 million in operating profits from (FY) 2013 - 2014.
“This was a significant year-on-year improvement,” (SAS) President & and (CEO), Rickard Gustafson said, “primarily driven by our commercial successes, cost measures and, in the fourth quarter, by lower jet fuel costs.”
In (SAS)’s fourth quarter, the airline posted revenue of SEK10.9 billion, a -0.6% (YOY) drop; its operating income was SEK1.28 billion, reversed from a -SEK250 million operating loss in the 2013 - 2014 fourth quarter. (SAS)’s net profit for the quarter was SEK517 million, a swing to profitability from its -SEK303 million net loss a year ago.
Citing ‘unsatisfactory’ unit cost increases after adjustments for currency and jet fuel, Gustafson said, “We now need to work intensively with implementation of the continuing cost measures to improve our long-term competiveness.”
(SAS) introduced streamlining measures in December 2014 with the intent of an “earning impact” of SEK2.1 billion by 2017. In (FY) 2014/2015, the measures produced SEK920 million in “efficiency enhancements,” (SAS) said in its analysis. “We have simplified the fleet by engaging business partners for frequencies that require smaller aircraft,” Gustafson said. “In line with that strategy, the last five Boeing 717s were phased out in the autumn, and (SAS)’s subsidiary Blue1 (BLF) was sold to CityJet [which will be] operating regional jet traffic for (SAS) from spring 2016, with eight new Bombardier CRJ900s.”
“The simplification of (SAS)’s short-haul aircraft fleet has essentially been completed,” Gustafson said. “We now operate only two types of aircraft under (SAS)’s traffic license in Europe.”
As for future projections, citing economic trends in Europe, exchange rate fluctuations, jet-fuel prices, intensified competition and expected market capacity increases in 2016, “given the inherent uncertainty of these external factors, (SAS), in line with numerous other airlines has chosen not to specify targets for profitability or its equity/assets ratio,” the company said.
News Item A-2: (SAS) will temporarily switch its Copenhagen Kastrup - Newark route from the current 737-700 to a 737-800.
News Item A-3: (SAS) Scandinavian Airlines appointed Karin Nyman as the new director of Communications. Nyman is currently the Marketing & Communications Director at health and social care company, Ambea; she takes up her new post in March 2016.
January 2016: News Item A-1: (SAS) Scandinavian Airlines has secured a Pre-Delivery Payment Financing Facility ((PDP) Facility) with (DVB) Bank covering a portion of the pre-delivery payments that (SAS) is making for five ordered Airbus A320neo. Through this agreement, (SAS) has secured pre-delivery payments to a total in 11 A320neo until the beginning of 2018. The loans under the (PDP) Facility will be repaid upon delivery of each aircraft to (SAS).
News Item A-2: Scandinavian Avionics gained two supplementary type certificates for tablet-based electronic flight bag (EFB) solutions for its Boeing 737s and 757s.
February 2016: News Item A-1: "Cimber Cancels Flights Due to Pilot (FC) Shortage" by (STR) Alan Dron, February 2016.
(SAS) Scandinavian Airline’s Danish subsidiary, Cimber (STR) will cancel 760 services through mid-May as it fights to overcome a shortage of pilots (FC).
(SAS) acquired Cimber (STR) in December 2014 to handle regional and short-haul flights on thinner European routes, using a fleet of 12 Bombardier CRJ900s. (SAS), the Scandinavian mainline carrier transferred some pilots (FC) over to the new subsidiary, but expansion at the parent company means many are returning, leaving gaps in Cimber (STR)’s aircrew (FC) workforce.
“Some of those pilots (FC) had already been with (SAS) and had it in their contracts the right to come back if expansion occurred,” (SAS) Head of Media, Knut Morten Johansen said.
Instead of trying to plug gaps in schedules as they occurred, he said, a decision was made to cancel the services through May to give some more certainty to services and passengers.
No routes will be abandoned, Johansen said, but frequencies would be thinned out.
Most of the routes affected are intra-Danish, or in and out of Denmark. The number of canceled flights should be put in context of the total of 130,000 that would be flown by (SAS) over the three-month period, he said.
The (SAS) group as a whole was recruiting 220 pilots (FC) to cope with its expansion and had received more than >1,750 applications for the posts; the problem was the time required to train pilots (FC) on the CRJ900s.
“We’re not satisfied with [the situation], but we are dealing OK with it,” he said.
(SAS) believes it will resolve the situation by summer, he added.
News Item A-2: (SAS) on February 5 commenced services between Stockholm Arlanda (ARN) and Munich (MUC). The 1,316 km sector will be operated 3x-weekly by (SAS)’s mixed 737 fleet. Competition on the city pair comes from fellow Star (SAL) Alliance member Lufthansa (DLH), which offers 31x-weekly services. Norwegian (NWG) also offers competition on the same airport pair with 2x-weekly flights. Arlanda becomes the third destination for (SAS) from Munich, with (SAS) also serving Oslo Gardermoen and Copenhagen from the Bavarian gateway.
News Item A-3: "Strike Threat on (SAS) Nordic (BRT) Routes" by (ATW) Alan Dron, February 19, 2016.
A strike on some of (SAS)’s Nordic (BRT) services has been threatened from February 22, following a breakdown of negotiations between pilots (FC), cabin crew (CA) and the company that hires them.
The services, although operated in (SAS) colors, are operated by UK-based regional carrier Flybe (BEE), which won the contract to serve several Nordic destinations in 2015 under a “white label” arrangement.
The pilots (FC) and cabin crew (CA) on the aircraft are not directly employed by Flybe (BEE) but via a recruitment agency, Global Employer Company (GEC). Swedish pilots’ union (SPF) and cabin crew (CA) representative body Unionen say they have been trying to reach a collective labor agreement with (GEC) since last autumn, without success.
A statement from (SAS) February 18 said it expected personnel hired by partner companies such as (SAS) to have a collective labor agreement. It said that (GEC) had initiated talks but, despite negotiations continuing, the two unions had given notice of industrial action, “which is unacceptable.”
In recent years as part of its cost-cutting efforts, (SAS) has outsourced much of its short-haul flying, particularly on thinner Scandinavian and northern European routes, to other carriers with smaller, more economic aircraft more suitable for the routes.
In its statement, (SAS) said that “it is conceivable that the conflict is really about the unions’ reluctance to allow new entrants to the Scandinavian market, not collective agreements.” Trade unions’ inability to adapt to changing market conditions was the real threat to jobs and the Scandinavian transport infrastructure, it added.
Routes likely to be affected by the dispute include several from Stockholm Arlanda to Swedish and Finnish destinations, including Visby, Turku, and Vaasa.
The Swedish Pilot's union (SPF) said it had been told by Flybe (BEE) that it could not meet Swedish standards of salaries, working hours and vacations. (SPF) could not agree to lower standards for its members than currently existed, said its chief negotiator, Tommy Larsson. It described (GEC) as a “one-man company” established with the sole purpose of acting as an employer for Flybe (BEE) pilots in Sweden.
(BEE) replied to several detailed questions on the strike with a brief statement. “Flybe (BEE) can confirm it is continuing to work closely with all relevant parties to effect a mutually agreed resolution in establishing collective bargaining agreements for the pilots and cabin crew working under its white label agreement with (SAS).
“(GEC) is an independent company that provides pilot (FC) and cabin crew (CA) recruitment and management services to Flybe (BEE).”
Later, an on-off strike involving crew operating services on behalf of Scandinavian Airlines (SAS) in Sweden and Finland was resolved.
The services are operated for (SAS) by UK-based regional carrier, Flybe (BEE) under a subcontract arrangement.
(BEE) reported February 24 that a collective labor agreement between cabin crew union, Unionen “contracted and employed by (GEC)” an independent company that provides pilot (FC) and cabin crew (CA) recruitment and management services to (BEE) “for the white label operation it has with (SAS)” was signed.
However, (SAS) announced on February 25 that a continuing lack of agreement between Flybe (BEE)/(GEC) and the Swedish Pilots’ Union, (SPF), had led to extended industrial action.
In a brief statement, (SAS) described events as “deeply regrettable and unacceptable and we expect the parties to take responsibility and [to] shortly agree.”
Following arbitration by Sweden’s government-backed Mediation Institute, (SAS) announced early February 26 that a collective agreement for pilots (FC) had been signed and that the strike would cease immediately.
It anticipated services returning to normal by the afternoon of February 26.
Services affected involved flights from Stockholm’s Arlanda airport and several Swedish and Finnish destinations.
March 2016: News Item A-1: (SAS) Scandinavian Airlines posted a first-quarter (FY) 2015/2016 net loss of -SEK246 million/-$28.7 million, narrowed from a -SEK640 million net loss a year ago.
The first-quarter of (SAS)’s financial year runs from November 1, 2015 through January 31, 2016.
First-quarter revenue for (SAA) was SEK8.28 billion, down -1.2% year-over-year (YOY). (SAS) reported an operating loss of -SEK186 million during the quarter, an improvement on -SEK657 million in operating losses (SAS) had in its (FY) 2014/2015 first quarter.
“The first quarter is the seasonally weakest quarter of the fiscal year, and this year, income before tax amounted to [a loss of] -SEK300 million,” (SAS) President & (CEO), Rickard Gustafson said. “However, this represents a year-on-year improvement of +SEK527 million, driven by our commercial success, significantly lower jet-fuel costs, and the effects of cost measures.”
(SAS)’s passenger traffic during the quarter was up +9.6% (YOY) to 6.43 billion (RPK)s on a +12.3% (YOY) capacity expansion to 9.58 billion (ASK)s, resulting in a passenger load factor of 67.2% LF, down -1.7 points (YOY). Nearly 6 million passengers were carried during the quarter, up +3.4% (YOY).
“(SAS) increased its capacity during the quarter, though a strengthened offering to the USA and Asia and to leisure destinations in Europe. Our efforts resulted in a traffic increase of almost +10%,” Gustafson said, adding that competition intensified during the period.
Capacity growth in Scandinavia is expected to increase about +5% to +7% in 2015/2016 and lead to more intense competition, (SAS) said.
(SAS) will turn to intercontinental expansion in 2015/2016, the company said in its outlook statement, with intentions of growing capacity on intercontinental routes by +25% through expansion of its long-haul fleet. The company expects to increase its total capacity by about +10% in 2015/2016, with its largest increase in the winter, (SAS) said.
During the quarter, (SAS) launched a Stockholm - Hong Kong route and boosted frequencies on existing routes to New York, Chicago, San Francisco, and Shanghai. New direct routes to Los Angeles and Boston will be inaugurated in March; an additional new route to Miami will be launched in September.
Additionally, following a trial period that began in September 2015, (SAS) plans to fully launch its (SAS) "Go Light" option between Scandinavia and the rest of Europe, which Gustafson describes as a “pared-down alternative [that] increases choice for customers [and] represents an adjustment to the European market.” (SAS) "Go Light" is aimed at customers that utilize only carry-on luggage.
In its outlook statement, (SAS) noted jet fuel costs were significantly lower in (1Q) 2015/2016 than the year-ago quarter. “However, the decrease in jet fuel costs will successively subside during the remainder of the fiscal year,” (SAS) said. “This, combined with sustained intense competition, is expected to entail that the earnings trend for the remainder of the fiscal year, compared with the preceding, year will be lower than in the first quarter.”
As of January 31, 2016, (SAS)’s fleet comprised 123 aircraft, including 83 Boeing 737NGs, 25 Airbus A320 family aircraft and 15 A330/A340/A350 aircraft. (SAS) has firm orders in place for 30 A320neo aircraft (to be delivered by 2019) and nine A330E/A350 aircraft, due for delivery completion by 2021. Five aircraft are set for delivery in 2016, including four A320neos.
News Item A-2: (SAS) on March 14 commenced services from its Stockholm Arlanda (ARN) base to Los Angeles (LAX). The 8,859 km sector will be flown by (SAS) the Star (SAL) Alliance carrier daily, using a mixture of its A330-300s and A340-300s on the route.
See photo: - "SAS-2016-03 - Stockholm to Los Angeles.jpg."
Karl Wistrand, (CEO) of Swedavia, commented on the launch by saying: “Air links to the USA west coast are important for both tourism and business exchanges between the countries of Sweden and the USA. The route also means increased productivity for companies that work or want to start working in the Swedish - USA market. So it is of great value that (SAS) is now launching a non-stop service to Los Angeles from Stockholm.” Although the route currently faces no direct competition, it should be noted that (LCC) Norwegian (NWG) does offer a seasonal summer operation between the two airports, with its services planned to resume on March 31.
News Item A-3: (SAS) Scandinavian Airlines selected Comarch (ECM) Customer Care system to help (SAS) process customer complaints. This is an innovative system, developed by the Polish manufacturer and supplier of Information Technology (IT) services and solutions to handle communications and correspondences with end customers. With the implementation of the new Customer Care (IT) system, (SAS) said it will be able to address all aspects related to the incoming customer complaint more efficiently and facilitate a positive experience to (SAS) customers.
April 2016: News Item A-1: (SAS) Scandinavian Airlines has launched daily, Copenhagen - Boston services as part of a major North American long-haul expansion. (SAS) will open a Copenhagen - Miami route from September.
(SAS) Group (CEO), Rickard Gustafson said the new routes “will bring us to 11 USA services by September.”
(SAS) said the number of flights each year between Scandinavia and the USA will rise to 6,800, carrying some 1.6 million passengers.
Initially, the Boston route will be served by a 92-seat Boeing 737-800, followed by a 737-700 with 20C business (C) class seats and 66Y economy seats. The route will be operated by PrivatAir (PTS) using a (SAS) livery with a new cabin configuration.
(SAS) recently launched Stockholm Arlanda - Los Angeles services and also operates flights between Scandinavia and New York, Washington DC, Chicago, and San Francisco.
As of January 31, 2016, (SAS)’s fleet comprised 123 airplanes, including 83 Boeing 737NGs, 25 Airbus A320 family aircraft and 15 A330/A340/A350 aircraft. (SAS) has firm orders for 30 A320neo aircraft (to be delivered by 2019) and nine A330E/A350 aircraft, due for delivery completion by 2021. Five aircraft are set for delivery in 2016, including four A320neos.
(SAS) posted a first-quarter (FY) 2015/2016 net loss of -SEK246 million/-$28.7 million, narrowed from a -SEK640 million net loss a year ago.
News Item A-2: (SAS) resumed services between Stavanger (SVG) and Paris (CDG) on April 8. The 1,114 km sector will be served 2x-weekly (Mondays and Fridays) and will be operated by (SAS)’s 737-600 fleet. Services will face no incumbent carriers.
(SAS) previously operated the route between August 2012 and October 2013, after which Air France (AFA) flew the route between April 2014 and October 2015. In addition, Norwegian (NWG) operated from Stavanger to Paris Orly between May 2007 and August 2010. The result of this latest route launch means that (SAS) operates to nine destinations non-stop from Stavanger. Five of these destinations are within Scandinavia, with the others being Aberdeen, Alicante, London Heathrow, and now Paris.
News Item A-3: "(SAS) Scandinavian Airlines Introduces Premium Cabin Bid System" by (ATW) Alan Dron, April 15, 2016.
(SAS) Scandinavian Airlines is seeking to improve yields by allowing economy (Y)-class passengers to bid for available premium seats. The new system, "(SAS) Upgrade," will be introduced from April 25.
Similar arrangements exist on other airlines. Rather than having premium cabin seats go empty, carriers allow travelers to enter a bid for an upgrade. Even if (SAS) does not receive a full business (C) or premium economy (PY) fare, it at least receives more money than if the passenger had traveled in the main cabin.
In the case of (SAS), passengers will be able to seek an upgrade from the time of booking their seat until 48 hours before departure. They decide how much they are willing to pay for a premium seat and enter a bid, either with funds or points from (SAS)’s EuroBonus loyalty program. The highest bids win the upgrades.
Successful bidders will be notified by email 36 hours before takeoff.
Flights can be upgraded to (SAS) Plus (premium economy) within the Nordic region and Europe, or to (SAS) Plus or (SAS) Business on long-haul sectors to the USA or Asia.
As well as a better seat, travelers can also receive ground benefits, such as fast-track security clearance or access to lounges, depending on the seat for which they have successfully bid.
“We’re always striving to develop new and innovative offers for our customers,” (SAS) VP Customer Journey, Stephanie Smitt Lindberg said.
It will still be possible to buy upgrades at the airport, up to 22 hours before departure.
News Item A-4: "Lufthansa Eyes Investments in (SAS), Brussels Airlines" by (ATW) Kurt Hofmann, April 18, 2016.
The Lufthansa Group is in talks with (SAS) Scandinavian Airlines and Brussels Airlines (DAT)/(EBA) about those carriers becoming part of Lufthansa (DLH)’s low-cost carrier (LCC) Eurowings (EWG) business, several German media outlets reported.
(DLH) established Eurowings (EWG) in 2015 as a pan-European (LCC) platform, which it expects to grow quickly to become its second strongest brand, especially for point-to-point traffic. The Lufthansa Group has invited airlines to join (EWG) as part of a franchise.
“Of course, we are in talks with (SAS); we have been partners within the Star Alliance (SAL) since the alliance was founded. But [discussion] regarding a possible investment in (SAS) is just speculation,” (DLH) spokesperson, Helmut Tolksdorf said.
According to "Reuters," talks with (SAS) could lead to Lufthansa (DLH) taking a stake in (SAS). (SAS) has repeatedly been the subject of takeover speculation.
Star Alliance (SAL) member, Brussels Airlines (DAT)/(EBA) is already 45%-owned by (DLH). (DLH) Chairman & (CEO), Carsten Spohr said recently that the Group has an option to purchase the remaining 55% of Brussels Airlines (DAT)/(EBA), adding that a decision regarding a possible complete takeover will be made during the second quarter.
May 2016: (SAS) Scandinavian Airlines has decided to retain control over ground handling services at its three main hubs of Copenhagen, Oslo, and Stockholm.
The tri-national carrier had initially opened negotiations last year with Aviator Airport Alliance Europe, which provides a range of services including aircraft washing and de-icing, baggage and freight handling, plus airport security throughout the Nordic region and the UK.
(SAS) initially planned to transfer its ground operations at Copenhagen, Oslo, and Stockholm, as well as those at the Swedish regional airports at Gothenburg and Malmö to Aviator. Following several months of negotiations, the two sides have agreed to continue negotiations over the outsourcing of (SAS) Ground Handling’s line stations at Gothenburg and Malmö. However, (SAS) has decided to retain control over ground handling in the three capital cities.
(SAS) has already outsourced those services at other points in its route network. Over recent years, as part of its financial turnaround program, (SAS) has undertaken streamlining of (SAS) Ground Handling, disposing of a large proportion of the business. This has reduced costs by some -SEK300 million/-$37 million over the past two years.
“(SAS) and Aviator have concluded that the commercial criteria do not exist to warrant a takeover of ground handling at the main airports,” (SAS) said. “(SAS) digitalization strategy will enable further streamlining and customer improvements to be made within the sphere of ground operations, which the company considers can be best achieved by itself.”
Finalization of negotiations to transfer ground handling Services at Malmö and Gothenburg is expected to be completed over the coming summer.
June 2016: News Item A-1: (SAS) Scandinavian Airlines posted a loss after tax of -SEK75 million/-$9.3 million for the first half of its financial year, substantially reduced from a loss of -SEK361 million for the same period last year. Revenue for the half-year, which ended in April, dipped slightly, to SEK 17.2 billion compared to SEK17.8 billion last time.
A substantial factor in the half-year loss was adverse currency exchange rates, which had a negative impact of -SEK875 million on operating income over the period, (SAS) President & (CEO), Rickard Gustafson said.
He said the figures had also been hit by a combination of a +6.4% capacity increase in the market and lower fuel prices. These had translated into lower fares, which had led to substantial pressure on yields (these dropped -9.2% in (2Q) compared to the year-ago period).
He added the company’s cost-saving initiatives will now realize just -SEK700 million of savings this year instead of the anticipated -SEK1 billion. “To maintain continued high production stability and quality, we have chosen not to drive the measures forward at the pace originally planned, primarily with regard to Technical Maintenance and Information Technology (IT),” Gustafson said.
The plan called for savings of -SEK2.1 billion in the 2015 - 2017 period, but certain measures will now be deferred until 2018, he said.
Ongoing cost-saving measures include continuing efforts to outsource ground handling at all but three (SAS) main hubs of Copenhagen, Oslo and Stockholm.
The company is also pushing ahead with outsourcing regional services, with four partner airlines now providing flights on thinner, shorter routes that are uneconomical for (SAS) to operate with Airbus A320/Boeing 737-sized airplanes. There are now 20 destinations in the network that could not be served, except by using partners’ smaller aircraft, he said.
Gustafson said (SAS)’s strategy of focusing on frequent travelers was delivering results, with increasing numbers of passengers choosing to fly with (SAS).
(SAS) is expanding its long-haul sector, with new aircraft and refurbished cabin interiors on existing members of the fleet attracting positive comments, with business (C)-class passengers in (2Q) up +20% on a year previously.
Within Europe, however, he said (SAS) faces increasing competition, particularly from low-cost carriers (LCC)s, with Ireland’s Ryanair (RYR) making increasing inroads into Scandinavia. As one indicator of the increasing scale of competition, he noted that on one of (SAS)’s main routes, Copenhagen - London, there are now 29 daily flights provided by five carriers.
“We note that the European civil aviation landscape is undergoing rapid change. The market trend toward main growth in the leisure travel segment and an increasing price sensitivity with customers poses challenges for profitability in the industry.
“At present, (SAS) is the only airline that operates between Scandinavia and Europe, where the flight crews (FC) are exclusively subject to Scandinavian employment terms. Given this background, it is crucial that (SAS) and the labor unions reach consensus about the market trend and the challenges we are facing,” Gustafson said.
News Item A-2: "(SAS) Swedish Short-haul Pilots Go On Strike"
by (ATW) Alan Dron, June 10, 2016.
(SAS) Scandinavian Airlines’ Sweden-based short-haul pilots (FC) walked out after salary negotiations ended without agreement.
The strike came just 24 hours after (SAS) agreed on new terms with Norway-based pilots (FC) and after the pilots (FC) rejected mediators’ proposals for an agreement, (SAS) said. The proposed contract was on a par with that agreed upon with the Norwegian flight deck crew (FC), it added.
In the late afternoon of June 10, (SAS) said the immediate effect was that around 40 evening flights affecting some 4,000 passengers would not operate.
The strike affects some 400 pilots (FC) belonging to the Swedish (SPF) pilots (FC)’ union and will impact both domestic and European services from Sweden. Long-haul services are unaffected.
“It is extremely regrettable that our customers are affected by this conflict,” (SAS) Director Communications, Karin Nyman said. “We have been responsive to the pilot association's requirements and offered a contract in line with the Norwegian pilot (FC) agreement. Despite this, the pilot association chose conflict. Our top priority now is to take care of the passengers affected by the strike, and to help them in the best possible way.”
A statement on the (SPF) website dated June 9 said it had rejected the Swedish Mediation Institute’s offer for several reasons. It said that one of (SPF)’s main requirements was a common salary scale for Swedish pilots (FC), as had been agreed in Norway. It also wanted a clearer agreement. Last year, it had accepted a wage agreement that had been reduced from several hundred pages to 50, and that the (SPF) had been embroiled as a result in interpretation disputes with (SAS).
It added Swedish pilots (FC) had made major sacrifices in recent years to help (SAS) pull back from the financial brink, including major losses in their occupational pensions. Since 2009, salaries had dropped by some -20% compared to national standards, while productivity had risen +20%, it said.
“(SAS)’s Swedish pilots (FC) have made great sacrifices based on a firmly rooted loyalty to the work that we all share. Swedish (SAS) pilots (FC) today are among the cheapest in Europe in comparison with the pilots (FC) of the airlines competing with (SAS).”
(SAS) said it would update its website with information and send updates via (SMS) and email to affected passengers.
September 2016: From "Airline Weekly" (INDEPENDENT WORLDWIDE COVERAGE).
It was a pretty good summer for (SAS), ultimately producing decent profits but also new worries about competition, capacity and currency. Scandinavia, (SAS)’s home market, is a mixed bag of good and bad: good thanks to geopolitical calm, solid leisure demand (both long haul and short) and healthy economic growth in Sweden. The bad? Norway’s sputtering economy and new airline taxes, plus low cost carrier (LCC) growth (both long haul and short) from points throughout the region.
One of those (LCC)s is Norwegian (NWG), which fired another bold shot in the transatlantic market recently. (NWG), the ambitious airline announced new USA flights from Barcelona, which joins London and Paris as non-Scandinavian launch points for crossing the Atlantic.
October 2016: News Item A-1: Sweden and Norway have each reduced their shareholding in (SAS) Scandinavian Airlines, after jointly selling 7% of (SAS). “We can confirm that the Swedish and Norwegian governments announced that they completed a sell-out of 23 million common shares in (SAS), which corresponds to 7% of outstanding shares,” (SAS) Head of Investor Relations Björn Tibell said.
The sale was carried out through an accelerated auction process that began after the close of Nasdaq Stockholm and Oslo Børs on October 12.
Sweden sold 14 million shares (4% of the airline), at SKr15.50 ($1.76) per share, raising SKr214 million, which will be used to pay off national debt.
This reduces Sweden’s stake to 57 million shares, or around 17% of (SAS), down from 21%. The country had indicated as far back as 2010 that it was considering the sale. “There are good reasons why the Swedish state should not be long-term owners of a listed airline and the government believes that (SAS) will be enhanced by a change of ownership,” Swedish enterprise and innovation Minister Mikael Damberg said.
Damberg added this is a “1st step,” although any further divestments will take place gradually based on company performance and market conditions. “Until further notice, the Swedish state will remain the main shareholder in (SAS),” he said.
As part of the transaction, Norway also sold 9 million shares, or 3% of the airline. In 2014, the Norwegian state said it was considering either reducing or completely divesting its (SAS) shares.
News Item A-2: (SAS) Scandinavian Airlines has taken delivery of its 1st of 30 A320neo aircraft, becoming the 1st airline in Scandinavia to operate the type.
(SAS) ordered the A320neo as part of its strategy to modernize its fleet with more fuel-efficient aircraft, reducing environmental impact such as emissions and aircraft noise. The A320neo will join (SAS)’s existing Airbus fleet of 25 A320 family aircraft, 8 A330s and 8 A340s.
(SAS)’s A320neo is configured in a single-class layout with 174Y seats. The aircraft is powered by (CFM) International (LEAP-1A) engines and will be deployed on short- to medium-haul routes from its Scandinavian home bases to destinations throughout Europe.
In September, (SAS) said it will invest SEK500 million/$52.5 million over the next 3 years to upgrade its short- and medium-haul Airbus A320 fleet with full cabin upgrades and on board Wi-Fi services via a partnership with communications company ViaSat. The 1st aircraft with the refreshed cabin interior will be the new A320neo, which offers extra leg room, new and more comfortable seats, a lighting system that aligns with the time of day and (USB) outlets at individual seats.
November 2016: Sweden’s Stockholm Arlanda Airport is to become the latest location to offer USA preclearance facilities. Preclearance locates the USA border at foreign airports and allows USA-bound passengers to clear immigration and customs inspections before boarding flights. This means they can effectively enter the USA as domestic arrivals, allowing them to bypass the often lengthy immigration queues at major USA airports.
It also means that passengers from Arlanda will, in future, be able to fly direct to USA destinations without a border control post.
The agreement to set up preclearance at Stockholm Arlanda was signed November 4 in Stockholm by the USA ambassador to Sweden, Azita Raji and Sweden’s Interior Minister Anders Ygerman.
Simultaneously Swedavia, which owns and operates Swedish airports, signed an agreement with USA Customs & Border Protection on how preclearance will be handled at Arlanda. “The USA is Sweden’s most important trading partner after Britain,” Swedavia President & (CEO) Karl Wistrand noted. “As we await a decision from the Swedish parliament, we will continue our preparatory work so that a decision on a larger investment in USA pre-clearance facilities can be taken immediately once the legal process is completed, which is expected in the summer of 2018.”
A Swedavia spokesman said it was aiming to have the new facility operational in 2019, but it depended on how quickly the judicial process moved. In 2015, USA authorities selected Stockholm Arlanda as 1 of 10 foreign airports where USA border control might be located. The Swedish facility will be built as soon as the legal process is completed to modify USA preclearance to comply with Swedish laws. “The agreement between Sweden and the USA will benefit Swedish access,” Wistrand said.
“Travel between the 2 countries has increased sharply in recent years, to >600,000 passengers, and introduction of USA preclearance will have a strong positive effect on both foreign investment and Swedish tourism.”
In 2015, about 1.1 million passengers flew between Sweden and the USA, with 60% of them choosing direct flights. In recent years, growth in passenger numbers has been dominated by increased leisure travel in both directions. There are currently 16 foreign airports that offer USA preclearance facilities, 9 of them in Canada.
December 2016: News Item A-1: (SAS) Scandinavian Airlines reported a full-year net income of +SEK1.3 billion/+$142 million, up +38.2% from a SEK 956 million profit in the year-ago period.
“During the autumn, market conditions have become more demanding and the industry continues its rapid pace of change. At the same time, the Scandinavian air travel market and demand for more long-haul routes and European leisure routes is on the rise. A lower cost structure and increased profitability is required,” (SAS) President & (CEO) Rickard Gustafsson said on a December 13 earnings call.
(SAS) is therefore increasing its cost-savings target from SEK0.8 billion to SEK1.5 billion in 2017 - 2019 and making structural changes to bring the group’s unit costs in line with its younger competitors.
Revenue for November 2015 to October 2016 fell 0.5% to SEK39.5 billion, while expenses increased 0.2% to SEK24.6. This produced an operating profit of +SEK1.9 billion, down -15% from +SEK2.2 billion in the prior-year period.
The results include SEK364 million in exceptional items, including negative impacts from the divestment of some Bombardier CRJ900s, provisions for new Chinese (VAT) rules and SEK31 million in restructuring costs, but this was partly offset by a SEK57 million gain.
Traffic rose +9.6% to 33.5 billion (RPK)s on a +10% increase in capacity to 45 billion (ASK)s, producing a load factor of 74.5% LF, down -0.2 of a point. Yield dipped -7.7% to 0.91 cents as (RASK) lowered -8% to 0.68 cents. Unit revenues declined -8% at constant currency, while ex-fuel unit costs fell -4.1%.
Yields are under intense pressure because of increased competition and capacity. The situation has been further amplified by a new Norwegian aviation tax that was introduced in June 2016, which (SAS) has been unable to pass on to customers. “We estimate that it has had a full-year negative effect of SEK400 million,” Gustafson said. “They are talking about doing a similar thing in Sweden. If that comes, I believe it will be at the end of 2017, or the beginning of 2018. I don’t see that we will have any better chance of fighting it off in Sweden than we had in Norway, so that will create further yield pressure.”
In 2016 - 2017, (SAS) is forecasting +6% to +8% capacity growth, as it feels the full effect of its recent long-haul expansion and introduces its Airbus A320neos, which have more seats than the aircraft they are replacing. The group has already received 2 A320neos and will take another 2 before year-end, to be followed by another 12 in 2017.
Gustafson said (SAS) plans to cut unit costs through the additional SEK700 million in savings. “We should be able to deliver a positive result before tax and non-recurring items [in 2016 - 2017],” he said.
However, he added the group’s 1st-quarter results were likely to be weaker than the prior-year quarter because of the higher price of jet fuel and the deterioration of the Swedish Kroner against the USA dollar.
News Item A-2: Star Alliance (SAL) members (SAS) Scandinavian Airlines and Singapore Airlines (SIA) are expanding their code share cooperation as part of a joint venture (JV) agreement that was signed in 2012. Starting May 30, 2017, (SAS) will place its code on 5x-weekly Airbus A350-900 flights between Stockholm Arlanda and Singapore via Moscow. (SAS) and (SIA) already have cooperation in place on the Copenhagen - Singapore route.
The (JV) includes the coordination of timetables and joint sales activities. (SAS) and (SIA) have had a code share agreement since December 2010 on a number of routes in Asia and Europe.
News Item A-3: (SAS) Scandinavian Airlines plans to open aircraft bases in Europe within the next 12 to 15 months, as it seeks to cut costs to appeal to leisure travelers.
(SAS) already had a plan in place to cut its costs by -SEK2.1 billion/-$229 million over the period to 2018. SEK1.3 billion of this SEK2.1 billion has already been delivered, leaving SEK0.8 billion remaining. “We are now increasing our ambition and adding another SEK700 million, so our target is SEK1.5 billion in 2017 through to 2019. The split is SEK700 million in 2017, SEK500 million in 2018 and SEK300 million in 2019,” (SAS) President & (CEO) Rickard Gustafson said, speaking at the release of the group’s 2015 - 2016 full-year results.
The cost savings will come from a variety of areas, including outsourcing, automation, collective agreements, lean processes, digitalization, the use of more direct sales channels and further product un-bundling. Gustafson added that further structural changes are needed to bring the group’s unit costs in line with its younger rivals, so organizational structures will be revamped to give more cost ownership and internal accountability.
As part of this strategy, (SAS) plans to maintain its premium traffic focus from Scandinavia, but also grow more in long-haul and short-haul leisure. “When it comes to growing long haul, we see a potential need for more direct long-haul capacity and (SAS) wants to play a role in that,” he said on the December 13 earnings call. (SAS) already expanded its long-haul passengers by +22% in 2015 to 2016.
On short-haul, he added: “We are absolutely convinced that (SAS) can and should take advantage of the growing leisure market in Europe.”
However, yields are under pressure and (SAS) is struggling to pass on a new Norwegian tax to its passengers. “Price perceptions are set by travelers and the perception is that air travel should cost a few hundred Swedish Crowns. That is the price that they anticipate.”
These factors are putting pressure on (SAS) to further control its cost base. “We still have some legacy in our cost base and that needs to be addressed, as we need to compete [with our rivals] on a like-for-like basis.”
(SAS)’ entire fleet is based in Scandinavia. Gustafson displayed a slide that showed an average labor cost of €43/$46 per hour in Scandinavia, compared with €26 per hour in London, or €25 in mainland Europe. This is partly driven by social security costs.
Under (SAS)’ strategy for 2017 and beyond, the company plans to “create a few bases” outside Scandinavia so it can employ local pilots (FC) and cabin crew (CA), resulting in lower costs to attract more leisure travelers. “We don’t have any bases across Europe. All our aircraft are based in Scandinavia, so all our European and continental flows go out from Scandinavia. We are now assessing the opportunity of establishing a few bases across Europe. I will come back to you on how many, the timing and where once we have done more homework and analysis around that,” Gustafson said.
(SAS) will continue working on the project during the 1st half of 2017, for release early in the 2nd half. “If we are going down this path, I don’t see us waiting a number of years before we start establishing it. If we go ahead, within the next 12 to 15 months we should have something up and running. We are in the early planning phase at the moment,” he said.
News Item A-4: (SAS) Scandinavian Airlines has secured financing of 5 Airbus A320neos through a sale and leaseback agreement with Jackson Square Aviation.
The aircraft will be delivered between the end of this year and 2018. As the aircraft are delivered to the tri-national Scandinavian carrier, they will be sold to Jackson Square and then leased back on a long-term lease.
This latest agreement means (SAS) has now agreed on financing of 7 Airbus A320neo from its order for 30 aircraft of the type. (SAS) has also agreed on letters of intent regarding the financing of a further 11 A320neos.
The move comes less than a month after another (SAS) deal for Airbus A319s and Boeing 737s as part of a refinancing package.
As part of (SAS)’s focus on optimizing its capital structure and reducing financing costs, it agreed to refinance 2 737s and 4 A319s with a credit facility of $75 million from backers including Standard Chartered Bank and Norddeutsche Landesbank. The facility matures in January 2023.
The aircraft will be refinanced in the period until January 2018 and were previously financed through lease agreements. As part of that transaction, (SAS) also entered into a sale and leaseback transaction with Standard Chartered for the 1st 2 Airbus A320neos delivered with (CFM) (LEAP-1A) engines during 2016, with a lease period of 10 years.
January 2017: News Item A-1: Irish regional airline CityJet is to acquire Scandinavian Airlines’ (SAS) Danish regional subsidiary Cimber (STR) and has signed a conditional purchase agreement for 6 Bombardier CRJ900s, plus 4 options.
Dublin-headquartered CityJet already operates 8 CRJ900s on wet-lease to (SAS) from Stockholm and Helsinki, as part of its October 2015 acquisition of Finland-based Blue1 from (SAS).
(SAS) is now also disposing of Cimber (STR) so it can focus mainline operations on larger traffic flows, operated by a more uniform aircraft fleet, delegating thinner routes to regional partners.
“The divestment of (STR) is in line with our strategy to simplify and focus on (SAS)’s own production platform. Thanks to synergies between CityJet and Cimber (STR), the production cost for (STR) production will be further reduced, creating the conditions to maintain and develop regional routes,” (SAS) President & (CEO) Rickard Gustafson said, announcing the agreement on January 24.
CityJet will take control of Cimber (STR) on January 31. CityJet will then add (STR)’s (SAS) wet-lease activities to its own contract with (SAS), which has been extended from 3 to 6 years effective January 31.
CityJet will continue to operate (STR)’s Copenhagen network (covering 30 European destinations) for (SAS) using Cimber (STR)’s current fleet of 11 CRJ900s, which will ultimately be replaced by the provisional aircraft order announced in tandem with the acquisition.
Bombardier (BMB) valued the agreement (which is expected to be firmed on January 31) at $280 million, potentially rising to $467 million if the options are firmed.
CityJet is a relatively new CRJ operator. The 8 aircraft it already operates will be joined by a further 4 that were previously ordered in early 2017, taking its existing fleet to 12 of the type. The 11 Cimber aircraft will give CityJet to a total to 23 CRJ900s, but those 11 aircraft will be sold between February and mid-2017 and replaced by the 6 CRJ900s and 4 options announced January 24. The replacement aircraft will be delivered from the 2nd half of 2017 through to the beginning of 2018.
The CRJ900 fleet will be operated exclusively on behalf of (SAS), in (SAS) colors and crewed by CityJet staff. In total, (SAS) will contract 22 CRJ900s from CityJet through this transaction. “This new (SAS) contract and the growth delivered by the acquisition of Cimber (STR) advances CityJet’s stated strategy of building its role as a provider of regional jet capacity to airlines across Europe and follows our successful inauguration of services on behalf of (SAS) in March 2016,” CityJet Executive Chairman Pat Byrne said.
(SAS) acquired full ownership of Copenhagen-based (STR) in February 2015 to secure “more focused and flexible regional production.” (SAS) will take a SEK20 million/$2.3 million hit from the sale during the 1st quarter of 2016 - 2017.
CityJet, which is active in scheduled flying, wet-lease work and ad-hoc charters, has been through several transitions over the last few years. Air France (AFA) sold the airline to German investor Intro Aviation, which in turn sold CityJet to the airline’s original founder Pat Byrne and a consortium of private investors in March 2016. The Irish carrier was previously in talks to acquire UK regional Stobart Air, but these negotiations ended without agreement.
Beyond the CRJs, CityJet has 17 Avro RJ85s and is also a Sukhoi (SSJ) Superjet operator, with 15 SSJ100s coming on lease and options on an additional 16. In late 2016, Byrne said he expected to firm half of the SSJ options in 2018.
News Item A-2: Stockholm’s Arlanda Airport has begun to mix biofuel with normal jet kerosene in its fuel bunkers as standard procedure.
The 1st uptake of the new fuel, which contains around 10% biofuel converted from used cooking oil and is produced in Los Angeles, California, was uplifted January 3 by an (SAS) Scandinavian Airlines Airbus A320neo. Stockholm Arlanda joins Oslo Gardermoen in offering the more environmentally friendly fuel.
Swedavia, the Swedish state-owned organization that owns and operates 10 airports throughout the country, bought the fuel through the Fly Green Fund, an organization that brings together aviation and biofuel bodies to help encourage the use of the fuel in Nordic nations. (KLM) and Braathens Regional Airlines will also be using the new biofuel at Arlanda.
Although the amounts of biofuel being bought currently are small compared to the total quantity of jet fuel uplifted at Arlanda, the January 3 event was “a symbolic and important step” toward encouraging the use of sustainable fuel, Scandinavian Airlines (SAS) Head of Media Relations Fredrik Henriksson said.
(SAS) and other airlines are keen to buy more biofuel, Henriksson said, but the availability and considerably higher cost of the greener fuel are currently limiting factors. However, the more demand grows, the more biofuel producers would be encouraged to step up production and the price would fall.
Organizations in Sweden are encouraged to offset the environmental flight costs by investing in the Fly Green Fund, which then buys biofuel. For example, Swedavia bought 450 tonnes, which it calculated was the amount its staff used while flying on business in 2016. Some of the money invested in the fund will also go toward establishing biofuel production facilities in the Nordic region.
The new mixed fuel is also available at Stockholm Bromma Airport and Åre Östersund Airport.
February 2017: (SAS) Scandinavian Airlines’ focus on frequent travelers appears to be paying off, but more needs to be done to cut costs in an increasingly competitive environment, according to President & (CEO) Rickard Gustafson.
That environment has spurred (SAS) to choose Ireland as the 1st site for an air operator’s certificate (AOC) outside the high-cost Scandinavian region, Gustafson said.
In the airline’s annual report (which is separate from its financial figures) Gustafson said that tri-national (SAS)’s focus on regular travelers had seen members of its "EuroBonus" frequent flyer program increase travel +6% in 2016, a larger increase than other passengers.
Membership of EuroBonus jumped by +500,000 over the year, to 4.7 million. “The most frequent travelers are also the people with the greatest demands on their travel experience and for whom we develop our product and network. This leads to options that benefit all our customers,” Gustafson said.
Having completed its investment in long-haul airplanes and new routes in 2016 (the long-haul fleet expanded from 12 to 16 and cabin interiors were upgraded) the next step would be to undertake similar cabin improvements in the short-haul fleet, he said. Part of this would see the installation of what he described as “the market’s fastest Wi-Fi on all our Airbus A320s and Boeing 737s.”
Modernization of the A320 fleet will continue; the 1st A320neo was delivered in October 2016 and +12 more are scheduled to arrive over the next financial year.
(SAS) is increasingly moving to an operating model where it outsources flights on thinner, more lightly traveled routes to regional partner airlines using more appropriately sized aircraft. “This cost-efficient operation provides annual savings of about -SEK0.5 billion/-$57 million and we have identified further development opportunities,” Gustafson said.
(SAS) said in December 2016 it planned to open bases outside Scandinavia in order to lower costs.
In a separate statement issued February 1, (SAS) said if it was to secure the long-term profitability of key traffic flows and actively participate in the growing leisure market, it must “have the same preconditions as other market participants. Therefore, (SAS) has decided to establish a new Air Operating Certificated (AOC) operator in Ireland, with operational bases in London and Spain. The aim is for the new operations to be up and running by winter 2017/2018.”
These new bases would complement (SAS)’s Scandinavian production “and, in time, build an even broader network with a superior schedule to the benefit of our customers.”
Digitalization (which included a new website launch in November 2016) will be a further major plank in (SAS)’ plans. In the same vein, all cabin crew (CA) have now been equipped with iPads to enable them to provide a more personal level of service to passengers “while simultaneously simplifying onboard processes and making daily life more efficient for cabin crew (CA).”
2 CRJ900LRs (15425, EI-FPI, 15426, EI-FPG), ex-(C-GZSJ; C-GWFL), (SAS) operations.
March 2017: News Item A-1: (SAS) Scandinavian Airlines has reported a -SEK556 million/-$61.7 million (1Q) net loss for the November to January period, more than doubling the -SEK246 million loss it posted in the year-ago period. “We are putting a seasonally weak quarter behind us, which, as expected, was worse than the preceding year. The inadequate profitability emphasizes the importance of (SAS) mobilizing to address the cost disadvantages that we have compared with more recently established competitors. Accordingly, we are working on the details of further measures to create long-term competitiveness and profitability,” (SAS) President & (CEO) Rickard Gustafson said.
Revenue for the quarter rose 8.2% to SEK9 billion while expenses increased 12.7% to SEK9.5 billion, producing an operating loss of -SEK577 million, more than triple the -SEK186 million operating loss in the prior-year quarter. “Overall, we foresee a large number of activities ahead, aimed at reducing the cost gap between (SAS) and more recently established competitors. This, combined with the establishment of new bases in London and Spain, will prepare for a strong (SAS) that can leverage all of the growth opportunities that exist in our market,” Gustafson said.
During the 3-month period, (SAS) shaved -SEK145 million from its cost base, contributing to a -5.7% decline in its currency-adjusted unit cost, excluding jet fuel.
Traffic rose +18.9%, but unit revenue declined -5.6% and (SAS)’s currency-adjusted yield declined nearly -12% to a “historically low level.” “Despite market uncertainty and a weak start to the fiscal year, (SAS) expects to be able to deliver a positive income before tax and nonrecurring items for the 2016/2017 fiscal year,” (SAS) said.
News Item A-2: "European Commission (EC) Re-imposes Cargo Cartel Penalties" by Alan Dron firstname.lastname@example.org, March 17, 2017.
The European Commission (EC) has reinstated fines totaling €776 million/$834 million on 11 airlines for operating a price-fixing cartel on air freight from 1999 to 2006. More legal hearings are likely, as at least 1 of the carriers immediately said it would appeal the decision.
The (EC) originally imposed the penalties in November 2010, but these were annulled by a decision of the European Union’s (EU) General Court in December 2015 on procedural grounds, which ruled there was a technical discrepancy in the prosecution. In a March 17 announcement, the (EC) said it had resolved the discrepancy and was re-imposing the financial penalties on 11 air cargo carriers: Air Canada (ACN), Air France (AFA)/(KLM), British Airways (BAB), Luxembourg-based Cargolux (CLX), Hong Kong flag carrier Cathay Pacific Airways (CAT), Japan Airlines (JAL)/(JSA), (LAN) Chile, Dutch cargo carrier Martinair (MTH), Australia's Qantas (QAN), (SAS) Scandinavian Airlines and Singapore Airlines (SIA).
The (EC) said that a 12th member of the cartel, Lufthansa (DLH) and its subsidiary Swiss International Air Lines (CSR), was spared from the financial penalties after it applied for immunity in 2005 and revealed details of the alleged arrangements between the airlines.
These were said to consist of collusion between the airlines at both bilateral and multilateral levels to fix the level of fuel and security surcharges on cargo. After the initial verdict, all the airlines except Qantas (QAN) appealed. The financial penalty thus became final for QAN). Millions of businesses depend on air cargo services, which carry >20% of all (EU) imports and nearly 30% of (EU) exports,” (EC) Commissioner Competition Policy Margrethe Vestager said. “Working together in a cartel rather than competing to offer better services to customers does not fly with the (EC). Today’s decision ensures that companies that were part of the air cargo cartel are sanctioned for their behavior.”
The (EU) can fine companies participating in cartels up to 10% of their revenue in the year preceding the adoption of a verdict. (SAS) immediately said it would appeal. “We strongly question the European Commission’s move to re-impose a decision that has already been annulled once by the [General Court],” (SAS) General Counsel Marie Wohlfahrt said. “Throughout the entire process, (SAS) has cooperated with the (EC) and, for >11 years, has argued against the (EC)’s perception that (SAS) Cargo had participated in a global cartel.”
Nevertheless, the fine would be recognized as a nonrecurring expense by (SAS) in its earnings for (2Q) 2016/2017. Air France (AFA) - (KLM), which will be fined €325 million if the penalties become final, said it would analyze the new decision and whether to appeal it again at the General Court. It added that the fines had been covered in its financial accounts since 2010.
News Item A-3: Scandinavian Airlines (SAS) has sold 2 pairs of London Heathrow (LHR) slots to an undisclosed buyer, raising $75 million from the transaction.
Before the sale, (SAS) had the 6th largest (LHR) slot portfolio with 19 daily slot pairs. This has now been narrowed to 17 pairs, although under the deal, (SAS) can continue to use the 2 pairs for up to 3 years. “Even after the transaction, (SAS) will continue to offer a strong and comprehensive network between Scandinavia and (LHR). The intention is to maintain the seat capacity to/from (LHR) through the use of larger aircraft on remaining departures,” (SAS) said.
(SAS), which operates from London Heathrow (LHR) to Copenhagen, Oslo, Stockholm and Stavanger, will post the proceeds of the sale to its 2nd quarter results.
This is not the 1st time (SAS) has sold off part of its (LHR) slot portfolio. In 2015, (SAS) sold a pair of slots to Turkish Airlines (THY) and (in a separate transaction) transferred a pair to an unnamed major carrier.
News Item A-4: Scandinavian Airlines (SAS) has concluded an agreement with Estonia’s Regional Jet OÜ, to partly replace short-haul capacity being lost by the downsizing of current provider Jet Time (JTM) Regional Jet OÜ will fly 4 ATR 72-600s on behalf of (SAS) from August.
The move comes following Danish airline Jet Time (JTM)’s decision to cut its turboprop fleet as it attempts to reorganize after experiencing financial difficulties.
Regional Jet OÜ, owned by Nordic Aviation Group and (LOT) Polish Airlines, will mainly operate routes to and from Copenhagen. Another part of the Nordic Aviation Group operates as Estonia’s national carrier, under the Nordica brand.
(SAS) employs several regional airlines to provide capacity on thinner short-haul routes.
Coping with the rest of the capacity currently provided by Jet Time (JTM) will be solved by reducing services and by redistributing existing capacity to other types of aircraft, (SAS) said March 23.
“We have now found the right collaborative partner to take over Jet Time (JTM)’s flights,” (SAS) VP External Production Mikael Wångdahl said. “We look forward to working with Regional Jet OÜ, which is a competent and reliable partner and a key contribution to our wet-lease strategy.”
Since November 2016 when the agreements with Jet Time were wound up, the company has been working to find a new wet lease operator that can operate (SAS)’s regional services with ATR 72s.
Several airlines were in the hunt to take up the slack caused by Jet Time’s reduction in operations. Regional Jet OÜ won the contract partly because of audits of (SAS)’s Quality & Compliance Monitoring showed up excellent results, (SAS) said.
The agreement with Regional Jet OÜ spans 6 years, but can be terminated after 3. The 4 ATR 72-600s will fly in (SAS)’s colors and will be staffed mainly by Copenhagen-based crews on local agreements.
Regional Jet OÜ was founded in 2015 as an independent company, supplying wet lease services to other companies.
April 2017: News Item A-1: Ireland-based regional carrier CityJet will station crew in the Estonian capital of Tallinn for the 1st time and provide additional capacity for the regional arm of Dutch flag carrier (KLM).
CityJet, which is shifting its operations increasingly from scheduled services under its own name to providing flights for others, announced in February 2017, in so-called “white label” services for (SAS) Scandinavian Airlines. The flights are operated using Bombardier CRJ900 regional jets on thinner (SAS) routes. The Irish carrier has 12 CRJ900s and +10 more on order.
CityJet said, “CityJet can confirm it is recruiting for crew to be based in Tallinn, Estonia. With a number of our aircraft overnighting at Tallinn, it makes sense for CityJet to base crew locally to improve efficiency.” Meanwhile, CityJet and (KLM) Cityhopper (AUK) have announced a new wet-lease arrangement on routes between the UK and the Netherlands. This increases the scope of an existing code share agreement between the 2 companies.
From May 15, (KLM) Cityhopper (AUK) will wet-lease 2 Avro RJ85 regional jets from CityJet to operate 4 additional Amsterdam Schiphol to London City Airport services each weekday, bringing (KLM)’s weekday frequency to 8. 4 will be operated by (KLM) Cityhopper on Embraer E190s. CityJet will also operate several existing flights to Birmingham, Hamburg, Bordeaux and Belfast on behalf of (KLM).
Under the new agreement, CityJet will also place its code on (KLM)-operated services connecting Amsterdam to London City, Manchester and Newcastle. “As we continue our strategy of refocusing CityJet into an airline with a strong mix of scheduled services and wet-lease operations on behalf of other airlines, this new agreement sees further growth in our portfolio of wet-lease customers in parallel with using our extensive experience of operations into London City Airport,” CityJet (CCO) Cathal O’Connell said.
CityJet retains services under its own name at London City to Dublin, Antwerp, Florence, Avignon, and Toulon.
“(KLM) has been a long-term partner of CityJet in its operations from the Netherlands to London City Airport,” (KLM) Cityhopper (AUK) Managing Director Boet Kreiken, added. “With the new wet-lease agreement, we will be able to increase our frequency into London City Airport, offering greater choice for our customers.”
News Item A-2: In November Scandinavian Airlines (SAS) will launch a new year-round service between Helsinki and Malaga.
The new route is served with an Airbus A320 and a Boeing 737-800 on Saturdays all year round, starting November 4th of 2017. Including the new route, (SAS) is now offering 10 departures to Malaga from Sweden, Norway, Denmark and now also Finland.
Malaga is the gateway to Costa del Sol and the route is an answer to the leisure travelers' demand on popular destinations.
Anders Wahlström, Head of Sales for Sweden and Finland, said:
"Malaga is a popular destination amongst many of our Finnish travelers and we are happy to launch a new direct year-round route there.
"This route will be a great addition to our many flights from Stockholm, Copenhagen and Oslo to other popular destinations in Scandinavia, Europe, the USA and Asia."
In addition to new routes, (SAS) is now introducing new cabins on all short and medium-haul flights. The new cabins will be installed between 2017 and 2019. From the 2nd half of 2017, the installation of high-speed WiFi will commence.
May 2017: A320-251neo (7565, SE-DOZ "Jarngerd Viking"), ex-(D-AUBD), sold to Jackson Square Aviation and leased back. CRJ900LR (15117, EC-JZV), ex-(C-FLMS), leased from and operated by Air Nostrum.
June 2017: Scandinavian Airlines (SAS) still expects to turn in a pre-tax profit for its 2016 to 2017 financial year despite a sharp increase in losses in the fiscal year’s 1st half. (SAS) turned in a net loss of -SEK876 million/-$101 million for the 6 months ending April 30 2017, compared to a net loss of -SEK75 million a year previously. The loss was made on revenue of SEK18.8 billion compared to SEK17.2 billion for the year-ago period.
The financial year’s 2nd quarter “trended in line with our expectations,” President & (CEO) Rickard Gustafson said. The most positive news was an increase of >300,000 passengers compared to the corresponding quarter last year. This resulted in increased revenue and a year-over-year (YOY) improvement in income before tax and nonrecurring items. “However, profitability remains too low and must be raised,” he said. As a result, (SAS) intends to double its target for efficiency savings to SEK3 billion in the 2017 to 2020 time frame.
“Even if we can see that our product and our product investments are appreciated and strengthen (SAS)’s competitiveness, market conditions in our operating environment remain challenging,” Gustafson said. During the quarter, currency-adjusted yield fell -7.5% and jet-fuel prices were +40% higher than the year-ago period.
(SAS) said that demand in the Swedish market was generally strong in the 1st 6 months. The Norwegian and Danish markets also had positive growth, but a new Norwegian aviation tax had eroded (SAS)’s earnings and was mostly absorbed in the form of lower yield.
Gustafson added that he viewed a proposed Swedish aviation tax “with some concern,” adding, “The aviation tax will generate minimal environmental effects and will undermine the profitability of Scandinavian airlines, which are already under intense international pressure. Furthermore, an aviation tax would negatively impact the Swedish economy, resulting in effects such as more international passengers not choosing to come to Sweden.”
At 13.5 million, (SAS)’s passenger numbers for the 1st half were up +6.8% on the year-ago figure of 12.7 million. Capacity, measured in ASKs, rose +9.7% to 23.4 billion, while RPK jumped +15.6% to 17 billion. Load factor rose +3.7 % points to 72.5% LF.
In its efforts to increase profits outside the high-cost Scandinavian region, Gustafson said (SAS) was establishing new bases in London, UK and Malaga, Spain: “When the measures have been completed and the bases established, I expect (SAS) to be a more flexible and productive airline with a broadened revenue base. Our aim is to continue providing a premium product together with a more differentiated customer offering, which will deliver us the preconditions to profitably leverage the growth in leisure travel.”
(SAS) expects capacity will increase in Scandinavia in 2016/2017, but slightly more slowly than in the last fiscal year. Competition and yield pressure is expected to continue, however. At the same time, jet-fuel costs will increase.
Despite market uncertainty and the weak start to the fiscal year, (SAS) expects to deliver a positive income before tax and nonrecurring items for 2016 to 2017 fiscal year, although this is dependent on no unexpected events occurring.
A320-251neo (7676, SE-ROB, "Tova Viking"), ex-(D-AXAD), sold to (CDB) Leasing and leased back, (7723, SE-ROC, "Torarin Viking"), ex-(D-AXAP), sold to (SMBC) Aviation Capital and leased back.
July 2017: 737-683 (28304, SE-DNX), permanently withdrawn from use.
August 2017: (SAS) has now added Shannon (SNN) to its network, beginning on August 1 a seasonal 2x-weekly (Tuesdays and Saturdays) service to the Irish airport from Stockholm Arlanda (ARN). The 1,814 km sector, which will operate until October 3, will be flown regularly on a mixture of (SAS)’s 737s, however, some services will be operated by CRJ900s. The link faces no direct competition.
Andrew Murphy, Managing Director of Shannon Airport, said of (SAS)’ arrival: “This is a further boost for tourism in this region as it gives a direct link from the Nordic market, where there is a growing demand for the Irish tourism product.” Talking about the reasons for visiting Ireland, Murphy also added: “It’s a 2-way street as Stockholm is a magical city to visit and Sweden itself offers so much for tourists. Ultimately, Tourism Ireland has played a big role in this. They are very active in Sweden and that’s a major support to us.”
Shannon becomes (SAS)’ 2nd destination in Ireland after Dublin, which it links to Arlanda, as well as Copenhagen and Oslo Gardermoen, offering a total of 29x-weekly flights this summer. Along with launching flights to Shannon, (SAS) has also increased its presence in Pristina (PRN), beginning flights to the Kosovo capital from Arlanda and Oslo Gardermoen (OSL). Flights from the Swedish capital commenced on August 1, with Norwegian capital (Oslo) services starting August 4.
(SAS) will offer 8 scheduled flights (last flight on August 26) from Arlanda on a mixture of its 737s and A320s, while Gardermoen will be served by 9 flights (last flight September 2). The route from Sweden will not face direct competition, but services from Norway will go head-to-head with Norwegian (NWG) which serves the route weekly (Saturdays). (SAS) already links Pristina seasonally to Copenhagen and Gothenburg.
September 2017: News Item A-1: Scandinavian Airlines (SAS) is to launch a large number of European routes from Aarhus Airport in Denmark, under a new agreement that will boost the airport’s traffic by >50%.
Aarhus Airport said the cooperation with (SAS) represents its biggest transformation in recent times.
The airport added that the agreement covers “the establishment of a large number of international routes to European cities,” targeting both business and leisure travelers.”
While the exact routes will not be announced until October, Aarhus said they will include new direct holiday destinations and additional frequencies between Aarhus and Copenhagen (the airport’s core route).
“We see it as our responsibility to strengthen the logistical link between east and west Denmark,” (SAS) Executive VP Lars Sandahl Sørensen said. “Aarhus is increasingly attractive for many foreign companies, not least with regards to the tourist industry, and we therefore believe the city has great potential.”
Aarhus Mayor Jacob Bundsgaard said the cooperation agreement is essential for the future of Aarhus Airport, which is in the middle of a turnaround process. Bundsgaard described the deal is a “huge step” towards the airport’s recovery.
News Item A-2: "UK Pilots Strike for First Time in 4 Decades" by
(ATW) Alan Dron email@example.com September 8, 2017.
Pilots (FC) at UK leisure carrier Thomas Cook Airlines (GUE)/(JMA) staged a strike on September 8 for improved pay, the 1st time British flight crew (FC) have gone on strike in >40 years, according to the British Airline Pilots Association (BALPA).
(GUE)/(JMA) said it was continuing to operate all services, using either non-union staff or (BALPA) members who did not support the industrial action.
The 12-hour stoppage began at 3 am local time and was staged because of what (BALPA) called "deteriorating wage conditions at the airline." Taking into account inflation, pilots (FC) had effectively been suffering wage cuts for several years, (BALPA) said. It also accused (GUE)/(JMA) of making cuts to pilots’ (FC)'s terms and conditions and on taking an intransigent stance during the pay negotiations.
“Going on strike is not something pilots (FC) take lightly,” (BALPA) General Secretary Brian Strutton said. “(BALPA) members have not been on strike since 1974, but with no sensible pay offer on the table Thomas Cook (GUE)/(JMA) pilots (FC) have had no other option.”
Speaking on the (BBC), (GUE)/(JMA) (CEO) Christoph Debus said pilots (FC) had been offered a 1.75% pay raise this year, followed by a 2.25% increase in 2018 and this was on top of automatic 1.8% pay increments.
He said the company operated in an extremely competitive environment: “On many routes, we are flying wing-to-wing with (LCC)s. We are willing to give a pay raise, but it has to be an appropriate one.”
He said all (GUE)/(JMA)’s flights had so far operated on time, or had departed ahead of time. There had been some rearrangement of schedules to cope with the strike, he added.
Meanwhile, Danish pilots at Scandinavian Airlines (SAS) called off a strike planned for September 11 after the (DPF) pilots’ union reached a new, 3-year agreement with the company. The new agreement, (SAS) said, “sets out a continued common ambition to create a long-term, profitable (SAS).
“The agreement is in line with the rest of the Danish labor market and, in addition, the parties have agreed to jointly work on cost-effectiveness, focusing on adapting pilot (FC) capacity according to the need for flexibility. The changes to the aviation industry have just begun and the key to continued profitability is to meet the needs and expectations of travelers,” (SAS) said.
News Item A-3: Pilots (FC) working for Scandinavian Airlines (SAS) in Norway have rejected a pay offer and called for strike action, just days after (SAS) sealed an agreement with its Danish flight-deck crews (FC).
(SAS) was facing a strike among its Danish crews, represented by the (DPF) union, but the planned walkout on September 11 was called off after the 2 sides reached a 3-year agreement.
However, (SAS) is now facing another strike threat from the Norwegian Pilot Association (NSF), which could see action from September 14.
(SAS) said the Norwegian pilots have been offered similar conditions to their Swedish and Danish counterparts, but the proposal has been rejected.
“The demands from the Norwegian pilots, which imply cost increases of +25%, are unreasonable. We have agreed with all other employee groups within (SAS), including the pilots (FC) in Denmark and Sweden, with the ambition to create a sustainable (SAS) for the future. Only the Norwegian pilots (FC) remain.
We are very sorry that the pilot (FC) unions in Norway have chosen to start this conflict and we are still convinced that we will find a solution before Thursday, when the Norwegian pilot unions have given notice regarding an extended strike,” (SAS) said.
October 2017: (SAS) this month has begun 2 new routes between Scandinavia and Spain. On October 14, (SAS) inaugurated a 3,681 km connection between Copenhagen (CPH) and Fuerteventura (FUE), along with a 3,349 km link from Malaga (AGP) to Helsinki (HEL), with the aircraft operating the latter service working on a w-pattern rotation out of the Spanish airport. Both routes will operate weekly (Saturdays) and wil be flown on (SAS)’s fleet of A320s.
Flights on the link between Copenhagen and the Canary Islands will face direct competition from Primera Air (JTX) which offers a weekly service, while the link from Helsinki to Malaga will go head-to-head with Finnair (FIN) (9x-weekly), Norwegian (NWG) (8x-weekly) and Primera Air Nordic (weekly).
November 2017: Scandinavian Airlines (SAS) issued preliminary financial results on November 3, prior to releasing its full-year financial figures on December 12. (SAS)’s financial year ended October 31.
(SAS) anticipates full-year revenue for 2016/2017 to amount to roughly SEK42.5 billion/$5.2 billion, compared to SEK39.5 billion for the preceding 12 months, with pre-tax income of around SEK1.7 billion, up from SEK1.4 billion for the previous year. In its forthcoming 2017 to 2018 financial year, (SAS) expects to increase its capacity by just +1 to +-3%, a dip on previous expansion rates.
(SAS) anticipates that total market capacity will accelerate in autumn and winter 2017/2018 compared to a year earlier, but it plans to consolidate the capacity growth it has introduced in recent years.
The introduction of larger aircraft to the fleet also means that (SAS) expects a year-on-year drop in its load factors at the start of its fiscal year, which began November 1.
To meet the increase in market capacity, (SAS) plans to strengthen competitiveness through efficiency enhancements and greater flexibility. In 2017/2018, these efficiency measures are expected to generate a positive earnings effect of about SEK700 million.
In its outlook for the coming financial year, (SAS) said that uncertainty in the macro environment remained considerable, with highly-volatile currency exchange rates and jet-fuel prices 2 factors to take into consideration. The tri-national airline said it had hedged a large share of its expected jet-fuel consumption for the next 6 months. Despite this, rising jet-fuel prices, together with a sustained strengthening of the dollar, could negatively affect its earnings trend.
(SAS) added that, following a seasonally weak 1st 6 months in 2017/2018, the potential existed for a strong summer 2018.
Taking these factors into consideration, (SAS) expected to deliver income before tax and nonrecurring items next year somewhere between SEK1.5 to 2 billion. That outlook was based on no unexpected events occurring.
December 2017: News Item A-1: Scandinavian Airlines (SAS) has posted a SEK1.1 billion/$130 million net income for its full 2016 to 2017 financial year, marking a dramatic improvement from the -SEK1.3 billion net loss it posted in 2015 to 2016. “The improved earnings were driven by a positive revenue trend and implemented efficiency measures, thereby confirming that the strategy is leading us in the right direction.
News Item A-2: Scandinavian Airlines (SAS) has launched its new operation under an Irish air operator’s certificate (AOC), as it seeks to lower costs by basing aircraft outside its expensive home territories. (SAS), the Scandinavian flag carrier said December 21 it had obtained the (AOC) last week, following a delay in receiving its new Airbus A320neo.
(SAS) plans to operate 9 A320neos under the new (AOC). 5 will be based at London Heathrow (LHR) ((SAS)’s 1st base outside Scandinavia) while the remainder will operate from a 2nd new base in Malaga, southern Spain.
It performed its 1st flight under the new authority on December 20 from Copenhagen to (LHR), using A320neo (EI-SIB).
An (SAS) spokesman said the London base would be used primarily for services between London and the Scandinavian capitals, as well as for sectors between other UK airports and Scandinavia. The new Malaga base is scheduled to be up and running in summer 2018.
News Item A-3: (SAS) Scandinavian Airlines appointed Torbjørn Wist as Executive VP and (CFO).
January 2018: Scandinavian Airlines (SAS) has confirmed it is in final negotiations with Airbus (EDS) for a large batch of A320neo narrow bodies following a "Reuters" report, citing (SAS) (CFO) Goran Jansson, that (SAS) will purchase 40 to 50 aircraft.
An (SAS) spokesman said he could not confirm precise quantities: “I’m not sure we’re talking about numbers at the moment; that was [Reuters’] interpretation. The only thing we’re confirming is that we’re in final negotiations.”
(SAS) is in the midst of receiving an earlier batch of A320neo-family aircraft, with 17 out of an order of 30 now in service and the remainder likely to be delivered by year-end. The new order will be used to replace (SAS)’s current fleet of around 70 Boeing 737-600s, 737-700s and 737-800s.
The spokesman said any new order would be primarily for the A320neo model. No delivery schedule had yet been set. He also declined to comment specifically on Reuter’s reports that the new aircraft were likely to be acquired via a Japanese operating lease with call option (JOLCO). This, Reuters said, was an aircraft financing structure previously used by (SAS) in which an airline leased aircraft from a Japanese investor and had a buyout option. (JOLCO) was just 1 of 3 possible acquisition routes (SAS) was considering.
February 2018: Scandinavian Airlines (SAS) reported improved figures for the 1st quarter of its financial year, noting that long-term efforts to improve its market position continue to bear fruit. (SAS) reported a net loss for the quarter ended January 31 of -SEK239 million/-$29.1 million, more than halving the loss for the corresponding period last year of -SEK556 million. Revenue for the period was SEK8.98 billion, fractionally up on the year-ago figure of SEK8.96 billion.
May 2018: News Item A-1: April’s biggest order for Airbus (EDS) came from (SAS) Scandinavian Airlines, which booked 35 A320neos and 1 A330-200.
News Item A-2: (SAS) has named hospitality industry executive Thomas Engelhart as Head of its Growth Initiative.
Engelhart will join (SAS) in early August from Scandic Hotels, where he served as (CCO) since 2015. According to (SAS), he will bring experience in commercial and business development, acquired from his time in the hotel and travel industry, loyalty programs and retail.
(SAS) said Engelhart will strengthen (SAS)’s growth strategy, as well as supporting the airline’s (SAS) Eurobonus loyalty scheme.
“He will develop our partnerships and deepen the relationship with our customers who are members of Eurobonus. We see great potential in creating growth in new areas, and here Thomas will play a central role in the company as head of the (SAS) Growth Initiative,” (SAS) VP Göran Jansson said.
Click below for photos:
SAS-737-700 C CLASS CONFIG
SAS-737-800 - SNOWFLAKE-A
SAS-737-883 - SNOWFLAKE
SAS-A319 60TH RETRO
SAS-A320-200 - 2012-10
SAS-A320-232 - 2012-12
SAS-A320NEO - 2011-06
SAS-A320neo with sharklets - 2017-08.jpg
SAS-A330-300 Enhanced - 2015-09.jpg
SAS-A350-900 - 2013-10
0 737-405 (CFM56-3C1) (1860-24643, /90 LN-BRE "HAKON V MAGNUSSON;" 1938-24644, /90 LN-BRI "HARALD HARFAGRE;" 2137-25303, /91 LN-BRP "HARALD HARDADE;" 2148-25348; /91 LN-BRQ "HARALD GRAFELL;" 2867-25795, /97 LN-BUF "MAGNUS DEN GODE"). (24270; 24271; 24275 YEAR LEASED TO (EBA) 1999-04), 25303 RETURNED (PSS) 2003-07, LEASED TO (BTV). 24643; 25348; 25795; WET-LEASED TO (BRT). 150Y.
7 737-505 (CFM56-3C1) (2018-24273, /91 LN-BRJ "MAGNUS BARFOT;" 2035-24274, /91 LN-BRK "OLAV TYRGVASSON;" 2072-24645, /91 LN-BRM OLAV DEN HELLIGE;" 2143-24647, /91 LN-BRO MAGNUS HARALDSSON;" 2213-24648, /92 LN-BRR "HALVDAN SVARTE;" 2225-24649, /92 LN-BRS "OLAVKYRRE;" 1842-24651, /90 LN-BRD ""HARALD GILLE;" 1925-24828, /90 LN-BRH "HAAKON DEN GODE;" 2434-25797, /93 LN-BRX "SIGURD MUNN"), INCLUDING 1 (ILF) LEASED, 25789 RETURNED (INZ), LEASED TO (BAB) 2000-02; 1923-24272, RETURNED 2000-04, LEASED TO (BAB); 24651 RETURNED (INZ), LEASED TO (BAB) 2000-11; 1792-24650, RETURNED (BBB) 2000-09. 24646 RETURNED (GEF), LEASED TO (BAU). 24273; LEASED TO (BAU) AS (YL-BBB). 24645; 24647; 24648; 24649; 24651; 24828; 25791; 25797; WET-LEASED TO (BRT). 24648; RETURNED (BBB) 2009-12, AS (N647SR). 24274; 25791; WFU FOR STORAGE AT TEL AVIV 2010-02. 120Y.
0 737-505 (CFM56-3C1) (2351-25791, /92 LN-BRV "HAKON SVERRESSON"), (GEH) 75 MONTH LEASED 2000-10, WET-LEASED TO (BRT). 120Y.
0 737-59D (CFM56-3C1) (2279-26421, /92 G-BVKD; 2412-26422, /93 G-BVKE; 2592-27268, /94 G-BVKB), LEASED TO (BMA).
20 +36/05 ORDERS 737-683 (CFM56-7B20) (21-28296, /98 LN-RRX "RAGNFAST VIKING;" 30-28297 /98 LN-RRY "SIGNE VIKING;" 49-28288 /98 LN-RRO "BERNT VIKING;" 92-28289 /98 LN-RPW "ALVID VIKING;" 100-28290, /98 LN-RPA "ARNLJOT VIKING;" 112-28291, /98 LN-RPX "NANNA VIKING;" 120-28293, /98 LN-RPZ "BERA VIKING;" 137-28294, /98 LN-RPB BURE VIKING;" 149-28295, /98 LN-RRZ "GISLA VIKING;" 330-28307, /99 LN-RPF "FREDE VIKING;" 333-28308, /99 LN-RCW "YNGVAR VIKING;" 368-28309, /99 LN-RRR "TORBJYORN VIKING;" 255-28310, /99 LN-RPG "GEIRMUND VIKING;" 382-28311, /99 LN-RRP "VILBORG VIKING;" 407-28312, /99 LN-RPU "RAGNA VIKING;" 447-28313, /99 SE-DTH "VILE VIKING;" 28314 "ERLAND V;" 28315 "BURGNY V" LN-RNN; 28316 "GJUKE V" LN-RNO; 614-28322, /00 OY-KKS "RAMVEIG VIKING;" 375-28605, /99 LN-RPH "HAMDER VIKING;" 303-30189 /99 LN-RCT "FRIDLEV VIKING;" 335-30190, /99 LN-RCU "SIGFRID VIKING;" 30192, "GRIMHOLD") (28606, (GEH) 108 MONTH LEASED 1999-10) (28322, LN-RPC). 112Y.
1 737-683 (CFM56-7B20) (329-28306, /99 LN-RPE "ELDA VIKING"), 1 YEAR WET-LEASED TO (ARE) 2003-04. RETURNED FROM (ARE) 2004-03. LEASED TO (BRT). 116Y.
10 737-683 (CFM56-7B20) (28289, LN-RPW; 28290, LP-RPA; 191-28298, /99 LN-RPS "GAUTREK VIKING;" 193-28299, /99 LN-RPT "ELLIDA VIKING;" 209-28300, /99 OY-KKG "SINDRE VIKING;" 227-28301, /99 OY-KKH EMBLA VIKING;" 243-28302, /99 SE-DNT "SNEFRID VIKING;" 257-28303, /99 SE-DNU "UNN VIKING;" 270-28304, /99 SE-DNX "TORVALD VIKING;" 290-28305, /99 SE-DOR "ELISABETH VIKING"), 28304; 28305; 1 YEAR WET-LEASED TO (ARE) 2003-04, RETURNED FROM (ARE) 2004-03. 28302; 28303; LEASED TO (FGC) 2005-05. 28304, 2005-11; & 28305, 2005-12; LEASED TO (FGC). 28302; LEASED TO EASTAR JET 2008-10. 28304, PERMANENTLY WITHDRAWN FROM USE 2017-07. 123Y.
12 ORDERS 737-700 (CFM56-7B) (GEF) LEASED, TO BE BASED IN SWEDEN:
1 737-700 BBJ (CFM56-7B) PRIVATEAIR (PTS) WET-LEASED FOR STAVANGER TO HOUSTON ALL BUSINESS CLASS (C) ROUTE - - SEE PHOTO - - "SAS - 2014-08 - 737-700 PREMIUM SERVICE." WITH WINGLETS. EXECUTIVE. 44C.
9 737-705 (CFM56-7B24) (28217, LN-TUD; 83-29089, /98 LN-TUB "RAGNHILD ERIKSDATTER;" 109-29090, /98 LN-TUC "ASTRID ERIKSDATTER;" 230-29091, /99 LN-TUE "GUNNHILD GORMDSDATER;" 260-29092, /99 LN-TUG "INGERID SVENSDATTER;" 471-29093, /00 LN-TUH "MARGRETE INGESDATTER;" 507-29094, /00 LN-TUI "KRISTIN KNUTSDATTER;" 773-29095, /01 LN-TUJ "ERIK BLODOKS;" 794-29096, /01 LN-TUK "INGE BARDSSON;" 1072-29097, /02 LN-TUL "HAKON IV HAKONSSON;" 1116-29098, /02 LN-TUM OYSTEIN MAGNUSSON"). 29091 RETURNED, LEASED TO (VOZ) 2003-07. 29091; 29092; RETURNED (BBB), LEASED TO (VOZ) 2003-07. 29093; 29094; 29095; 29096; 29097; 29098; LEASED TO (BRT). 134Y.
1 737-76N (CFM56-7B) (32738, SE-REZ "MARGARETA VIKING"), 2013-12.
1 737-76N (CFM56-7B) (33005, SE-REU), EX-(N629SC), (GEF) LEASED 2012-08.
9 737-783 (CFM56-7B20) (458-28314, /99 LN-RRM "ERLAND VIKING;" 464-28315, /00 LN-RNN "BORGNY VIKING;" 476-28316, /00 LN-RNO "GJUKE VIKING;" 486-30192, /00 LN-RPJ GRIMHILD VIKING;" 500-28317, /00 LN-RPK "HEIMER VIKING" 404-30191, /99 LN-RRN SOLVEIG VIKING" 2015-05; 2331-32276, LN-RRB, 2007-07; 3116-34548, LN-RNU, 2009-12; 3210-34549, LN-RNW, 2010-03), 28315, LN-RNN; 28316, LN-RNO; LEASED TO (BRT) 2005-10. 131Y.
7 +2 ORDERS 737-800NG (CFM56-7B), (GEF) LEASED TO BE BASED IN NORWAY:
2 737-85P (CFM56-7B) (2586-35706, LN-RRE, 2008-04; 2610-35707, 2008-05), BOUGHT FROM (ARE). 179Y.
1 737-86N (CF56-7B) (35646, LN-RGI "TURID VIKING"), (GEF) LEASED 2014-02. 179Y.
2 737-86N (CFM56-7B) (38038, LN-RGF "TOROLF VIKING;" 41266, LN-RGH "ODVAR VIKING"), 2013-06 & 2014-01. 179Y.
14 737-883 (CFM56-7B26) (529-28318, /00 LN-RCN "HEDRUN VIKING;" 548-28319, /00 LN-RCO "GUNN VIKING;" 577-28321, /00 LN-RCR "ODDRUN VIKING;" 625-28323, /00 OY-CJS; 1014-28325 /01 LN-RRS "YMER VIKING;" 1036-28326, /01 LN-RRT "LODYN VIKING;" 1070-28327, /02 LN-RRU VINGOLF VIKING;" 1424-28328, /03 LN-RRL; 666-30194, /00 LN-RPP; 798-30197, /01 LN-RCZ "GLITNE VIKING;" 634-30467, /00 LN-RPO "THORLEIF VIKING;" 668-30468, /00 OY-KKT "ORE VIKING;" 673-30469, /00 LN-RPL "SVANEVIT VIKING;" 717-30470, /00 LN-RPN "BERGFORA VIKING"), 28323; 30467; LEASED TO (ADH) 2002-05. +3 ORDERS. 4 (INCLUDING 30470; LN-RPN) OPERATIONS FOR "SNOWFLAKE." 28319; 28320; 28321; 30193; ST (HNA) 2004-02. 28323; 30467; RETURNED FROM (ADH), LEASED TO (ARE) 2004-03. 30468 RETURNED FROM (ADH) 2004-02. 30194 LEASED TO (ARE) 2004-05. 30468 LEASED TO (ARE) 2004-05. 30471, "DAG VIKING" 2007-06; 32276, "CECILIA VIKING" 2007-07; 30467; TO MOSKOVIA (GAI) 2009-12. 28323 RETURNED FROM LEASED TO (ARE) 2010-07. 179Y.
3 737-883 (CFM56-7B26) (767-28324, /00 LN-RCY "EYLIME VIKING;" 696-30195, /00 LN-RPM "FRIGG VIKING;" 733-30196, /00 LN-RCX "HOTTUR VIKING"), WET-LEASED TO (BRT). 150Y.
3 737-883 (CFM56-7B26) (1554-32277, /04 LN-RRW "SAGA VIKING;" 1169-32278, /02 LN-RRK "GERUD VIKING;" 2898-34546, LN-RRH, 2009-05), 186Y.
0 767-283ER (PW4056), SOLD TO (TBL).
0 767-300ER, (UAL) WET-LEASED 2004-10 TIL 2005-04. RETURNED.
1 767-33AER (27908, N351AX), EX-(I-DEIF), OMNI AIR (OAE) LEASED 2013-06.
0 767-383ER (PW4060) (395-25365, /91 LN-RCL "SVEN VIKING") (274-24476, /89, LN-RCI, (GAX) LEASED). 24476 RETURNED KUTA-TWO AIRCRAFT 2001-11. 24729 WFU SHANNON 2001-12. 7 LEASED, (ACN) MAINTENANCE. 23377 STORED AT NIMES 2003-01. 24846; & 26544; RETURNED TO LESSOR 2003-04. 24729 RTND 2003-06. 25365 RTND 2003-12. 24849 RTND 2004-06. (ETOPS). 190Y.
0 767-383ER (PW4060) (325-24848, /90 PH-AHY), (BBB) LEASED, WET-LEASED TO (HOL) 2003-10. WET-LEASED TO (BXL) 2004-03. RETURNED. 188Y.
00 ORDERS 767-400, 14 CANCELLED:
0 DC-9-21 (382-47301 RETURNED), (475-47360 SOLD TO CELSIUS AMTEC 2001-03).
0 DC-9-41 (JT8D-11) (752-47633, RETURNED TO LESSOR 2000-01), 47628 LEASED TO (ABX). 47599 STORED 2001-04. 47634 WFU 2001-09. 47610 WFU; 47750; 47766; 47777; 47778; WFU MOJAVE 2002-01. 47597; 47599; 47646; 47747; 47748; 47750; RETURNED TO AIR 41 2002-07. 47779 RETURNED 2002-10. 47627 RETURNED TO AIR 41. 47624 RETURNED (GRB) 2002-12. 47626; 47627; 47630 RETURNED 2003-01; 47632 RETURNED 2003-02. 47629; 47725 RETURNED 2003-03. 47634; 47646; 47725; 47747; 47766; 47777; PARTED OUT 2004-09. 105 PAX.
00 MD-81 (JT8D-217C/219) (1231-49381, /95 OY-KGZ "HAGBARD VIKING;" 1254-49420, /86 OY-KGY ROLLO VIKING;" 1303-49436, /86 OY-KHC "FASTE VIKING;" 1456-49604, /88 OY-KHE "SAXO VIKING;" 1519-49613, /88 OY-KHG "ALLE VIKING;" 1693-49914, /90 OY-KHM "METTE VIKING;" 1812-53000, /90 OY-KHN "DAN VIKING;" 1815-53001, /90 LN-RMT "JARL VIKING;" 1882-53007, /91 OY-KHP*; 1895-53008, /91 LN-ROM "ALBIN VIKING;" 1896-53275, /91 OY-KHR "TORKILD VIKING;" SE-DIK "STENKIL VIKING;" 1946-53314, /91 SE-DMB "BJARNE VIKING;" 1979-53347, /92 LN-RON "HOLMFRID VIKING;" 1999-53366, /92 LN-ROO "KRISTIN VIKING"), (9 LEASED FROM (SWS). 48010 RETURNED 1999-10. 48007 RETIRED. 966-48006, 41 43, RETIRED 2000-02. 48004 RETURNED (GRB) 2000-08, 957-48005; 981-48008, RETURNED (GRB) 2000-12. 53314 LEASED TO (SPP) 2005-01. 53008; RETURNED FROM (SPP). 53007; SEEN IN "STAR ALLIANCE" COLORS 2011-10. ALL PHASED OUT 2013-10. 150Y.
00 MD-82 (JT8D-217C/219) (1225-49380, /85 OY-KGT "HAKE VIKING;" 1232-49382, /85 LN-RLE "KETTIL VIKING;" 1236-49383, /85 LN-RLF "FINN VIKING;" 1237-49384, /85 LN-ROP "BJOERN VIKING;" 1244-49385, /85 LN-ROR "ASSUR VIKING;" 1263-49421, /86 LN-ROS "ISULV VIKING;" 1264-49422, /86 LN-ROT "INGJALD VIKING;" 1284-49424, /86 LN-ROU "RING VIKING;" 1345-49437, /87 LN-RLR "VEGARD VIKING;" 1442-49603, /88 LN-ROX "ULVRIK VIKING;" 1543-49615, /88 LN-ROY "SPJUTE VIKING;" 1553-49728, /88 SE-DIK "STENKIL VIKING;" 1665-49913, /89 SE-DIL "TORD VIKING;" 1803-49999, /90 SE-DIN "ESKIL VIKING;" 1835-53002, /91 LN-RML "AUD VIKING;" 1846-53004, /91 SE-DIR "NORA VIKING;" 1855-53005, /91 LN-RMM "BLENDA VIKING;" 1869-53006, /91 SE-DIS"SIGMUND VIKING;" 1922-53295, /91 LN-RMN; 1947-53315, /91 LN-RMO "BERGLJOT VIKING;" 1998-53365, /92 LN-RMR "OLAV VIKING"), 1 EX-(RNO). 49421; 49557; 53295; 53296; WFU 11/02. 49728 STORED RIGA 2003-05. 49913; 49998; WET-LEASED TO (SPP) 2003-07. 49908 RETURNED FROM (SPP) 2003-09. 49423 SOLD TO (WJE) 2003-09. 49911; 49912 WFU 2003-12. 49421 SNOWFLAKE OPERATIONS 2004-03. 49909 32 25 WET-LEASED TO (JTX) 2004-04. 49913 LEASED TO (SPP) 2004-05. 49998 WFU 2004-05. 49728; 49999; WET-LEASED TO (SPP) 2004-06; RETURNED FROM (SPP) 2004-11. 49998 SOLD TO (CCE) 2004-09. 49554; & 49910; SOLD TO (WJE) 2004-12. 49604 LEASED TO (SPP) 2005-02. ALL PHASED OUT BY 2013-10. 166Y.
0 MD-82 (JT8D-217C) (1402-49555, /87 LN-RMD; 1625-49909, /89 SE-DII; 1917-53294, /91 SE-DIZ; 1937-53296, /91 OY-KHT), 53294 STORED AT DINARD 2002-11. 49555 LEASED TO JETX 2004-05. ALL PHASED OUT BY 2013-10. 162Y.
0 MD-83 (JT8D-217C) (1415-49556, /87 LN-RMD; 1436-49557, /88 SE-DPI;
00 MD-87 (JT8D-217C) (1501-49605, /88 SE-DIB "VARIN VIKING;" 1569-49606, /89 SE-DIF "HJORULV VIKING;" 1512-49607, /88 SE-DIC "GRANE VIKING;" 1572-49608, /89 LN-ROZ "SLAGFINN VIKING;" 15127-49609, /88 OY-KHF "RAGNAR VIKING;" 1705-49610, /90 LN-RMK "RAGNHILD VIKING;" 1522-49611, /88 LN-RMG "SNORRE VIKING;" 1827-49612, /91 LN-RMH "SOLMUND VIKING;" 1556-49614, /88 OY-KHI "TORKEL VIKING;" 1921-53010, /91 SE-DIP "MARGRET VIKING;" 1931-53011, /91 SE-DIU "TORSTEN VIKING;" 1962-53337 /92 LN-RMP "REIDUN VIKING;" 1967-53340, /92 LN-RMU ""GRIM VIKING;" 1985-53348, /92 OY-KHW "INGEMUND VIKING"). 49556; 49557; WFU 2002-12. 53295 ST (WJE) 2005-06. 49609; 49610 (EC-JSU); 49612 (EC-JRR); 53348 (EC-JTK), WET-LST (SPP), 2006-05. 3066-28925, /98 N14664, 2008-05; 53337, SE-DMK, RETURNED FROM CITY AIRLINE. 5 AIRPLANES SOLD TO (WJE) TO BE USED FOR SPARES. ALL SOLD BY 2012-09. 125Y.
0 MD-90-30 (V2525-D5) (2138-53457, /96 SE-DMF; 2140-53458, /96 OY-KIL; 2141-53459, /96 LN-ROA; 2142-53460, /96 OY-KIM; 2147-53461, /96 SE-DMG; 2149-53462, /96 LN-ROB; 2194-53543, /97 SE-DMH "TOROLF VIKING;" 2197-53544, /97 OY-KIN "TORMOD VIKING"), EX-(AMF) 2003-01. 53458; 53459; 53544; WET-LEASED TO (BLF) 2006-02. ALL 8 LEASED OUT IN 3RD QUARTER 2010. 53459; LEASED TO (DAL) 2010-12. 166Y.
0 MD-11F, (GRC) LEASED 1999-04. RETURNED.
3 A319-131 (V2522-A5) (2850, OY-KBO IN SPECIAL 60TH ANNIVERSARY "RETRO" MARKINGS SEE PHOTO; 3231, /07 OY-KBR "STEN VIKING;" 3292, /07 OY-KBT "RAGNVALD VIKING"), 39CY, 102Y.
3 A319-132 (V2524-A5) (SE-REH "HELGE VIKING" 2006-08; 2850, /06 OY-KBO "CHRISTIAN VALDEMAR VIKING" 2011-11; 2888, /06 OY-KBP "VIGER VIKING"). 39CY, 102Y.
2 A320-232 (V2527-A5) (1183, /00 SE-RJE "OTTAR VIKING;" 1383, /01 SE-RJF - - SEE ATTACHED - - "SAS-A320-200 - 2012-10"), EX-(SPP) 2012-10. EX-(EX-KOX). ORIX LEASED 2012-02. 1183, WITHDRAWN FROM USE (WFU) 2017-04. 168CY.
3 A320-232 (V2527-A5) (2856, OY-KAY "RUNAR VIKING;" 2883, /06 OY-KAL, 3159, /07 OY-KAR), EX-(IGO), EX-(VT-INJ) 2013-07. 180Y.
3 A320-232 (V2527-15) (2911, /06 OY-KAM; 2858, /06 OY-KAN; 2990, /06 OY-KAO; 3086, /07 OY-KAP), 2013-02. 180Y.
80 ORDERS (2019-02) A320neo:
17 +13/11 ORDERS A320-251neo (LEAP-X1A) (7565, SE-DOZ "JARNGERD VIKING;" 7676, SE-ROB, "TOVA VIKING;" 7723, SE-ROC, "TORARIN VIKING"), EX-(D-AUBD) 2016-06. 174Y.
8 +8 OPTIONS A321-232 (V2533-A5) (1587, /01 OY-KBK "ARNE VIKING;" 1619, /01 OY-KBL "GUNNBJORN VIKING;" 1642, /01 OY-KBB "HJORULF;" 1675, /02 OY-BPH "SULKE VIKING;" 1798, /02 OY-KBE "EMMA VIKING;" 1807, /02 OY-KBF "SKAPTI VIKING;" 1817, /02 LN-RKI "GUNNHILD VIKING;" 1848, /02 LN-RKK "SVIPDAG VIKING"), 33CY, 165Y.
1 ORDER A300-200:
4 A330-343 (TRENT 772B-60) (496, /02 OY-BPN "EYSTEN VIKING;" 497, /02 LN-RKH "EMUND VIKING;" 515, /03 SE-REE "SIGRID VIKING;" 568, /04 SE-REF "ERIK VIKING"), 34C, 35PY; 195Y.
2 +2 (2015-02) ORDERS A330-300 ENHANCED (TRENT 772B-60) 242-TONNE MTOW, 1,400 KM RANGE, 32C (LIE-FLAT SEATS), 56 PY, 174Y
8 A340-313 (CFM56-5C4) (413, /01 LN-RKF "GODFRED VIKING;" 424, /01 LN-RKG "GUDROD VIKING;" 430, /01 OY-KBI "RU8RIK VIKING;" 435, /01 OY-KBA "ADALSTEIN VIKING;" 450, /02 OY-KBM; 467, /02 OY-KBC "FREYDIS VIKING;" 470, /02 OY-KBD "TOSTE VIKING"), 46C, 28PY, 171Y.
8/6 ORDERS (2018-02) A350-900:
3 ATR 72-600, (JTM) WET-LEASED 2013-12.
1 CRJ900LR (CL-600-2D24) (15117, EC-JZV), EX-(C-FLMS), LEASED FROM AND OPERATED BY AIR NOSTRUM 2017-05.
3 CRJ900LR (CL-600-2D24) (15425, EI-FPI, 15426, EI-FPG), EX-(C-GZSJ; C-GWFL; 15428, EI-FPK "KLUR VIKING"), OPERATIONSS FOR (SAS) 2017-02.
Click below for photos:
SAS-5-Thomas Engelhart 2018-08.jpg
FRITZ SCHUR, CHAIRMAN (2008-04).
RICKARD GUSTAFSSON, PRESIDENT & GROUP CHIEF EXECUTIVE OFFICER (CEO) (2011-02).
2014-05: "AIRLINE BUSINESS" Interview of Rickard Gustafson.
Having brought the Scandinavian group back from the brink, (SAS) (CEO) Rickard Gustafson had to see off the threat from low-cost carriers (LCC)s.
Copenhagen’s mid-November chill could hardly have been more suitable as an atmosphere in which to play out the end game of a Scandinavian political-corporate drama. But this tightly-wound finale has not been lifted from the closing pages of a Nordic thriller, nor were its actors performing for a television audience. They were fighting a real-life, minute-by-minute battle to bring the (SAS) Group back from the brink of collapse.
“It was like a war room,” said (SAS) (CEO) Rickard Gustafson. “We had, in one building, 8 parallel negotiations going on. In a building next door, there were bankruptcy lawyers ready to take over.”
There would be no temporary patches, no interim solutions. The (SAS) Group’s survival would depend on whether the collective will of its leaders and its staff could outpace the hour hand of the clock. Rickard said he and the negotiators had camped out at the office for 4 days, “never leaving, never sleeping.”
“It was a bit surreal,” he recalled. “We had this intense thing going around with different people (there would be progress here, but things going backwards over there). It was an intense situation. “We did not have a ‘plan B.’ We needed the signatures.”
The (SAS) Group reached breaking point in November 2012, after more than a decade struggling with serial losses. Once active across a broad range of businesses (with interests in several European airlines, Flight Training Operations and a hotel chain), (SAS) finances suffered badly during the post-2001 air transport crisis.
* BATTLE WITH BRAATHENS
(SAS) had emerged the victor in a war of attrition with rival Braathens in Norway, but found itself facing a new threat in ambitious budget carrier Norwegian (NWG). It was also under siege from rising fuel prices, a costly structure and exposure to vulnerable investments (as well as the self-inflicted burden of consequences from cartel involvement).
“The world had changed, and changed rapidly,” said Rickard. “New players had entered the market with no heritage.” 60 years of existence counted for little (survival would require simplicity and humility). Several restructuring efforts had forced (SAS) to dismantle its empire and pare back to core elements.
However, (SAS)’s reliance on short-haul operations (around 70% of its business) meant that it could no longer sustain its heavy cost base in the face of budget carriers. On November 12th, 2012 (SAS) laid out the (4XNG) restructuring program, which would overhaul these costs, and the price its workers (particularly its flight crews (FC)) needed to pay if (SAS) was to live.
“It’s hard to change, hard to take benefits from people and change people’s lives,” said Rickard. “We had to take it all the way to the cliff.” (SAS) was out of options, and Rickard recalls the “enormous responsibility” of finding a way through the crisis.
Although the talks in Copenhagen worryingly edged past their deadline, a final agreement with 8 unions on November 19th threw (SAS) a rope with which it could begin to pull itself out of the darkest hole in its history.
(SAS) which emerged as a lighter, leaner operation is no longer a diverse group but a business focused on a single carrier (following the integration of Scandinavian Airlines (SAS) and Blue1 (BLF)) aiming ultimately to employ 9,000 personnel (less than one-third of its workforce in 2001).
Norwegian regional operator Wideroe has been sold, along with most of (SAS)’s 3rd-party airline interests, and the company is in the process of divesting its Ground-handling division.
New collective agreements and pension terms under "4XNG," along with restructured sales and Information Technology (IT), and centralized administration, have started to carve into (SAS)’s stubbornly-high cost base, a legacy of its unwieldy tri-national structure. (SAS) is aiming to strip 15% from its underlying unit costs by the end of 2015.
Over the 1st year of "4XNG," (SAS) has turned in positive pre-tax and net income (evidence, said Rickard, that the bitter remedy is doing its job). He said the industry is characterized by “razor margins,” and the 3.3% profitability figure (SAS) achieved in its 2012 - 2013 financial year is still far short of the 8% it wants to reach.
Rickard does not think this level of profitability is unrealistic. “Is it stretched? Absolutely. But I don’t think it’s unreasonable,” he said, although he acknowledged that higher capacity and lower growth last year have pushed back the target date by a year to 2015 - 2016. “You need a margin that size to have a sustainable business model,” he said. “We need more time to get there.”
Liquidity from the asset sales, are part of (SAS)’s efforts to free itself, to a degree, from its dependence on external credit. It also opted for a SKr3.5 billion/$548 million share issue in February, and cited strong demand as an illustration of confidence in its turnaround strategy. “You can never relax, but we’re in a much better position than before. We feel we’ve been able to create a stronger balance sheet. That’s an important step,” Rickard said.
(SAS) has about 31% of the Scandinavian capacity share (ahead of Norwegian (NWG) with 22% and Ryanair (RYR) with 8%. But with little room to change the short- to long-haul balance, revamping the short-haul operation in order to repel the encroachment of budget carriers is crucial to (SAS)’s strategy.
* LOW-COST DABBLES
Scandinavian Airlines (SAS) had previously dabbled in the low-cost carrier (LCC) sector through its spin-off carrier "Snowflake," which used a handful of Boeing 737s, but the experiment ultimately served to highlight the costliness of its primary operation. “We’ve seen some players outsource or establish a low-cost carrier (LCC). We’ve said we’re not going to go there,” said Rickard.
(SAS) has instead brought (LCC) practicality into its mainline short-haul network, by introducing a clearer, 2-tier on-board service concept (branded "(SAS) Go" and "(SAS) Plus") designed to make transport simple and efficient for frequent travelers. Gustafson said the change moved (SAS) away from outdated standards in order to focus on the needs of frequent travelers (its target market) both for business and leisure.
(SAS) is also pushing back against the budget airlines on its network, opening >50 new routes in 2013 (including several leisure destinations). This is in contrast to previous restructuring measures, which had aimed to establish Scandinavian Airlines (SAS) as a business (C) carrier.
Scandinavian Airlines (SAS) is creating homogeneous modern short-haul fleets at its 3 bases: Airbus A320s at Copenhagen and Boeing 737s at Oslo and Stockholm.
Wet-leasing has enabled (SAS) to achieve better performance on its low-density routes, and (SAS) has taken advantage of partnerships – such as its tie-up with Danish ATR operator Jet Time (JTM) (to provide regional connections).
(SAS)’s battle to restructure has taken place in the shadow of rival Norwegian (NWG)’s ascendency, the most emphatic illustration of which, took the form of an order for >200 airplanes in early 2012. Rickard, who had been skeptical about the agreement before it was firmed, acknowledged the menace posed by Norwegian (NWG)’s unchecked expansion in Europe. “It’s a big threat,” he said. “They are our biggest competitor. We take them very seriously.”
Norwegian (NWG)’s long-haul venture is proving a particular irritation. (SAS) has joined with Star (SAL) Alliance partner, Lufthansa (DLH) in openly scorning (NWG)’s justification for its controversial transatlantic strategy, which has involved relocating its long-haul (NAI) operation (at least on paper) to Ireland.
(SAS) described (NWG)’s rationale as “highly suspicious” and, in a February filing to USA regulators, rejects as “nonsensical” the claim that the relocation offers significant traffic rights. It believes its rival is attempting to gain an unfair labor cost advantage by hiring Asian-based crews (FC) - (CA), but circumventing restrictions which would apply in Norway, contrary to a principle of maintaining high labor standards, which forms part of the USA - European "open-skies" agreement.
Norwegian (NWG)’s business model, said (SAS), will begin a “slow descent to the lowest common denominator,” with increasingly complex arrangements intended to cut labor costs and fares, at the expense of the long-term survival of established USA and European carriers.
Rickard believes the advantages of flying with a network carrier can be overlooked if passengers concentrate purely on cheap fares, and highlights (NWG)’s faltering entrance into the long-haul sector which was marred by technical problems with its Boeing 787s.
Rickard said that (NWG)’s difficulties (particularly the instances when passengers were stranded in Asia) clearly illustrated the benefits of a network carrier partnership: “With Norwegian (NWG) in the long-haul arena, all of a sudden customers realize ‘that’s what you get with a network carrier.’”
* LONG-HAUL EXPANSION
(SAS) has a 30% share of intercontinental traffic from Scandinavia. It heavily relies on the (SAL) Alliance to supplement its long-haul operation, particularly to North America, but the launch last year of its much-postponed San Francisco service (more than a decade after it was originally unveiled) finally opened a long-awaited Scandinavian link to the USA west coast. “Our long-haul is doing well for us,” said Rickard. “That’s not always been the case.”
(SAS)’s investment strategy includes renewing its long-haul fleet, initially with 4 Airbus A330-300s in 2015 - 2016, before it introduced the 1st of 8 A350-900s in 2018. (SAS) modernized the passenger cabins of its current fleet with new seats, including flat-beds in business (C) class.
Transformation of the short-haul fleet started in 2016 with the delivery of the re-engined A320neo, 30 of which will be brought into (SAS) by the end of 2019.
(SAS) is a consolidated airline, a situation forced upon it by the extensive Scandinavian geography (stretching from the Arctic to the Baltic) combined with a sparse population of 20 million across Sweden, Norway and Denmark. Decentralization of (SAS) into autonomous operations between the 3 states was attempted in 2004, only to be reversed in 2009.
Its close operational links to Lufthansa (DLH), particularly through the Star (SAL) Alliance, have not evolved into a corporate merger, and merger gossip has remained simply that. “I think Europe needs further consolidation. There are too many players, too much competition, and everyone’s struggling,” said Rickard, although he remains non-committal as to the role (SAS) might take in any de-fragmentation.
Involving (SAS) in any consolidation would mean addressing the tri-national ownership under which the Swedish, Norwegian and Danish states collectively hold 50% of the company’s stock (a co-operative arrangement whereby the three act in concert to maintain overall public control).
All 3 governments have signaled that they would be prepared to sell if the economic conditions were suitable, but no-one has yet committed to a withdrawal. “I don’t think it’s good for any company when shareholders say they want to exit,” said Rickard. But he is otherwise unconcerned about the presence of the government in any future ownership, and said the structure is not an obstacle to the company’s activities.
Rickard suggests there is a “perception” of political input arising from the states’ involvement, but insists: “No board meeting I’ve been in has had a political agenda.”
The extensive reform wrought by "4XNG" does not mark an end to the reshaping of (SAS). Rickard believes there are still plenty of areas in which the company needs to refine its business.
He said there are a “lot of additional revenue streams” that could be exploited through partnerships. (SAS) also needs to “leverage a lean mindset” and trim costs further. “There are things we need to do in terms of harmonizing the fleet. [We could also] rethink some expendables in delivery of services. Do we invest or put our costs where we get the best value for investment? “We’ve a long way to go before (SAS) is collaborating between functions – we’re far from best-in-class.”
(SAS) may have escaped its near-death experience, but the airline remains in intensive care. “I don’t think the world will stand still,” Rickard warns. “We need to change with our industry. The survivors will be those who embrace change.”
* AFFAIRS OF STATE
The 3 flags emblazoned on Scandinavian Airlines (SAS)’ airplanes symbolize its joint ownership (but are also a reminder of the complexities of a tri-national workforce).
Over 30 unions represent the personnel within the (SAS) Group, and managing the resulting web of employee agreements has sometimes proven a difficult task. “If we would start this company from scratch, we wouldn’t design the union structure [as it is now],” admits Rickard. “But there’s a legal environment. People have a right to join.”
If the heavy restructuring at the (SAS) Group has been undertaken with an apparent minimum of union unrest, a large part of the credit is due to changes put in place about seven years ago. Industrial relations had been particularly fraught over the preceding years, with (SAS) suffering strikes in all 3 base countries.
Rickard’s predecessor, Mats Jansson, declared that the “strike culture” at (SAS) needed to end. He oversaw the introduction of a co-operative model based on dialogue with unions, intended to promote greater mutual understanding of the company’s direction.
(SAS) has since experienced a long period of relative peace, illustrating the scheme’s success. “The perception is that [the union structure] is a big hurdle,” said Rickard. “But I’d also like to remind everyone that in the last few years [we’ve] been through a massive restructuring, followed by a massive contraction (in collaboration with unions) without strikes.”
* SWEDISH INSPIRATION
There are no elk antlers adorning Rickard’s walls, and no shotgun in his cupboard. For a Scandinavian, he professes to be remarkably un-Scandinavian. “I don’t hunt and I don’t play golf,” he said. “I’m just a normal guy.”
Swedish-born Rickard attended Linköping University’s Institute of Technology, specializing in Engineering & the Industrial Economy.
He carved a path to the (SAS) Group through the financial sector, joining Andersen Consulting and occupying several senior positions at (GE) Capital (GEC), before moving on to head insurance firm Codan.
While his career background and personal pursuits have little direct connection with aviation (he counts boating and running among sporting interests (he is a frequent traveler, and admits to being “fascinated” by the air transport industry).
LARS SANDAHL SORENSEN, (CEO) (SAS) INTERNATIONAL (2007-11).
HANS OLLONGREN, ADVISOR TO (CEO) & PRESIDENT (2007-08).
ANDERS EHRLING, (CEO) (SAS) SVERIGE.
BENNY ZAKRISSON, CHAIRMAN (SAS) CARGO (2007-06), & EXECUTIVE VP INFRASTRUCTURE, MERGERS & ACQUISITIONS.
LEIF RASMUSSEN, PRESIDENT (SAS) CARGO (2009-08).
BJORN ALEGREN, PRESIDENT (SAS) GROUND SERVICES (2007-09).
JOHN DUEHOLM, DEPUTY (CEO), EXECUTIVE VP AIRLINE SUPPORT & AIRLINE RELATED BUSINESSES. ACTING (CEO) (2010-12) TO (2011-01). ALSO CHAIRMAN (SAS) NORWAY (BRT).
TORBJORN WIST, EXECUTIVE VP & CHIEF FINANCIAL OFFICER (CFO) (2017-12).
LARS SANDAHL SORENSON, EXECUTIVE VP (2015-02).
Lars was previously Group Director & (CCO) of global services company (ISS). He previously worked for (SAS) from 2003 to 2010.
JOAKIM LANDHOLM, CHIEF COMMERCIAL OFFICER (CCO).
BJORN TIBELL, HEAD INVESTOR RELATIONS.
ANDERS WAHLSTROM, HEAD OF SALES, SWEDEN & FINLAND.
ROLF ANDERSSON, HEAD OF ADMINISTRATION (2003-05).
CLAUS SONBERG, EXECUTIVE VP CORPORATE COMMUNICATIONS & INVESTMENT RELATIONS (2007-08).
MATTIAS FORSBERG, EXECUTIVE VP & CHIEF INFORMATION OFFICER (CIO) - INFORMATION TECHNOLOGY (IT) & DIGITAL INNOVATION (2015-08).
Mattias has been (CIO) at Systembolaget since 2011, and previously was (IT) Director at (B&B) Tools, and worked in (IT) strategy at Accenture between 1998 and 2008.
MICHAEL BRAG, (CCO) TECHNICAL SERVICES & (CEO) COMPONENT MAINTENANCE.
URNOLF MYRVOLL, SENIOR VP & HEAD TECHNICAL SERVICES DIVISION (1999-09), PRESIDENT (SAS) TECHNICAL SERVICES (2004-10).
BERNHARD RIKARDSEN, EXECUTIVE VP CORPORATE ADMINISTRATION & SUPPORT.
EIVIND ROALD, EXECUTIVE VP COMMERCIAL.
HAKAN ERICSON, EXECUTIVE VP AIRLINE SUPPORT & AIRLINE RELATED BUSINESSES, EX-(DHK) (2005-06).
SVEIN OPPEGAARD, EXECUTIVE VP CORPORATE HUMAN RESOURCES (HR) (2007-06).
KARL SANDLUND, EXECUTIVE VP STRATEGIC INITIATIVES.
LARS MYDLAND, SENIOR VP (SOM)/ACCOUNTABLE MANAGER.
HANS-AKE LILJA, SENIOR VP SAFETY & QUALITY CONTROL (QC).
CLAES BROSTROEM, SENIOR VP INFORMATION STRATEGIES/PROCESSES (1998-09).
HENRY STENSON, SENIOR VP COMMUNICATIONS.
JENS WITTRUP WILLUMSEN, SENIOR VP MARKETING & PRODUCT MANAGEMENT.
HANS OLLONGREN, SENIOR VP CORPORATE COMMUNICATIONS & PUBLIC AFFAIRS (2007-06).
KURT KUHNE, VP FLEET DEVELOPMENT.
JAN OLSSON, VP PRODUCT DEVELOPMENT.
MATS VALINGER, VP STRATEGIC DEVELOPMENT (1996-10).
SUNE LARSSON, VP QUALITY MANAGER TECHNICAL OPERATIONS.
KURT KUHNE, VP FLEET PLANNING.
TEDDY ZEBITZ, VP ROUTE & REVENUE MANAGEMENT (SAS) CARGO (2004-08).
MIKAEL WANGDAHL, VP EXTERNAL PRODUCTION.
JIMMY KJAERSVOLD, VP COMMERCIAL (SAS) CARGO (2004-08).
PER MOELLER JENSEN, VP INTERNATIONAL AREAS.
KLAUS GLENDORF, VP GLOBAL HANDLING, (SAS) CARGO (2004-06).
MS STEPHANIE SMITT LINDBERG, VP CUSTOMER JOURNEY.
PATRIK KNUTSSON, CORPORATE PURCHASING & CHIEF PURCHASING OFFICER (2007-09).
JAN LUNDBORG, HEAD NETWORK & REVENUE STRATEGIES (2003-05).
LARS MYDLAND, HEAD OPERATIONS MANAGEMENT (2003-05).
THOMAS ENGELHART, HEAD GROWTH INITIATIVE (2018-08).
Thomas will join SAS in early August from Scandic Hotels, where he served as (CCO) since 2015. According to (SAS), he will bring experience in commercial and business development, acquired from his time in the hotel and travel industry, loyalty programs and retail.
(SAS) said Thomas will strengthen (SAS)' growth strategy, as well as supporting the (SAS) Eurobonus loyalty scheme.
GUNNAR ANDERSSON, DIRECTOR TECHNICAL TRAINING.
ANDRIS ZVEJNIEKS, DIRECTOR CORPORATE COMMUNICATIONS (2004-11).
LENNART APPEL, DIRECTOR CENTRAL ENGINEERING (1996-10).
HANS-AKE LILJA, DIRECTOR TRAFFIC RELATED MAINTENANCE (STK) (1998-05).
SYVER LEIVESTAD, DIRECTOR HEAVY MAINTENANCE (2000-02).
MICHAEL HOELGAARD, DIRECTOR (TRM) (CPH) (1998-07).
BERTIL KLOFELT, DIRECTOR (TRM) (OSLO) (2000-02).
PER ENKJAER, DIRECTOR LINE MAINTENANCE (CPH).
WILFRED LYKKE, DIRECTOR MAINTENANCE CONTROL (1996-10).
PER ENGKJAER, DIRECTOR 737 PROJECT OFFICE.
MS EVA-KARIN DAHL, DIRECTOR BUSINESS/CONCEPT DEVELOPMENT.
MS KARIN NYMAN, DIRECTOR COMMUNICATIONS (2016-03).
Karin was the Marketing & Communications Director at health and social care company, Ambea; she took up her new post in March 2016.
LARS ANDERSEN, DIRECTOR ENVIRONMENT, (CSR) & CRISIS COMMUNICATIONS.
KJETIL GRONEVIK, FINANCE DIRECTOR (2015-02).
CAPTAIN DIRCH HANSEN, SENIOR TRAINING CAPTAIN.
BJORN EKEGREN, REGIONAL MANAGER - CENTRAL EUROPE.
SVEN-GORAN DANIELSSON, 737-600 PROJECT MANAGER (1996-08).
ERIK JURLANDER, MANAGER 767 ENGINEERING.
TORE LANDFALD, MANAGER AIRCRAFT DEVELOPMENT.
PETER UDSEN, MANAGER QUALITY MANAGEMENT.
BENT HAVE, MANAGER MAINTENANCE PRODUCTION (CPH).
HANS HENNING FISCHER, 767 PRODUCT MANAGER (1999-09).
MICHAEL WETZEL, MANAGER 767 ECONOMY DEPARTMENT.
EINAR EVJU, MANAGER DC-9, MD-80/-90 ENGINEERING.
RUNE MARTHINSEN, MANAGER DC-9, MD-80/90 PRODUCT MANAGEMENT (2000-02).
JAN OLSON, MANAGER 737 ENGINEERING (1999-09).
MS CONNY BOHOLM, 737 PRODUCT MANAGER (1999-09).
NIKLAS HARDANGE, EUROPEAN ROUTE MANAGER (2007-04).
STAFFAN JONSSON, ENGINE MANAGER.