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AIRLINE CRISIS: Struggling SAS cuts more to survive

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SAS in crisis continues to slash jobs and cut costs, it said Monday.

 

AIRLINE JOBS: SAS CUTS MORE TO SURVIVE. More airline jobs will be cut, as Scandinavian airline SAS said Monday it will lower pensions and salaries and slash 800 jobs in an effort to cut costs by 3 billion kronor ($440 million) annually in what the CEO described as a “final call” for the loss-making carrier, Associated Press and others reported.
[pullquote]“This is our final call” — SAS CEO Rickard Gustavson[/pullquote]

“This is our ‘final call’, if SAS is to continue. We have been given this last chance to start from scratch and implement these fundamental changes. I realise that we’re asking much of our employees, but there is no other way. I hope our loyal and dedicated workers have the will to fight for SAS’s survival,” the CEO said to The Copenhagen Post.

SAS’ CEO Rickard Gustavson.


SAS, with its shares
traded on the Nordic stock exchanges, will get SEK 3.5 billion in credit lines from the governments of Sweden, Norway and Denmark, as well as major banks, if it can agree on those savings cuts with labor unions. SAS wants to renegotiate the workers’ employment terms and conditions as well as their pension schemes. SAS also plans to raise about 3 billion kronor by selling its regional airline Wideroe, ground handling services and other assets.

“We are demanding a lot but there is no other way. This truly is our final call if there is to be an SAS in the future,” CEO Rickard Gustafson said, according to AP.
 

 

The restructuring plans, including the sale of Wideroe of Norway, will result in the overall number of SAS employees falling from around 15,000 to 9,000.

[pullquote]“Many SAS employees have demonstrated time and time again that they have been willing to go far to help SAS” — Bente Sorgenfrey of Denmark’s FTF union[/pullquote]

Analysts doubted Monday that the measures would be enough to keep the airline independent, as its structure, designed more to secure jobs and Nordic solidarity than generate profit, has hamstrung its ability to cope with soaring jet fuel costs and compete with discount carriers such as Ryanair and trimmer regional rival Norwegian Air Shuttle, Reuters reported.

Bente Sorgenfrey of Denmark’s FTF union that has most of the 2,000 cabin and ground crew employees in Denmark called the plan “violent.”

“Many SAS employees have demonstrated time and time again that they have been willing to go far to help SAS by, among other things, go 20 percent down in salary, 20 percent up in working time and by handing (SAS) half a month’s salary in December this year and next year,” she said to AP.

The three Scandinavian governments own 50 percent of the company. Denmark and Norway each control 14.3 percent of the shares, while Sweden holds 21.4 percent.

The editor of the Traveling Reporter works as a business news editor, and is a frequent traveler. When not doing any of that, he spends time on his boat and tries to figure out where to travel next. Two of his top destinations are the Philippines and San Francisco. Email Erik! Follow the Traveling Reporter at Stumbleupon, Tumblr, Chime In, Pinterest, Google+, Weibo, Storify, Facebook, Traveldudes, Myspace.