SAS is overhauling its short-haul network in a bid to cut costs and tackle the problem of how to compete with the no frills sector.
The carrier is axing seven routes completely for this year's winter season, and transferring another six to regional affiliates. The airline says the measures will go at least half way towards reducing annual costs by SKr4 billion ($390 million).
SAS is just one of a number of European flag carriers struggling with the threat of low-cost rivals. "This is an illustrative story for the sector," says Jonathan Wober, financial analyst at Deutsche Bank. "British Airways is struggling with the same issue, and other carriers will shortly have the same problem."
SAS is improving fleet productivity by fire-walling its three main bases - going back and forth on one route rather than operating more complex triangular routings. It is also starting flights earlier in the morning at its Copenhagen and Stockholm hubs and minimising turnaround times. This will free around 20 aircraft, and improve utilisation by 5%. There will also be job losses, although SAS hopes some staff will be offered jobs by regional partners.
SAS is cutting services from Copenhagen to Jonkoping, Norrkoping, Sondre Stromfjord, Vasterås, and Wroclaw; and from Stockholm to Kristianstad and Skelleftea. SAS-owned regional Air Botnia takes over routes from Stockholm to Tammerfors and Turku. Routes on the Norlink network in northern Norway will be taken over by another SAS-owned regional, Wideroe, although the exact route network has yet to be finalised.
Braathens, bought by SAS last year, will take over the Oslo-Tromso-Kirkenes service. The number of flights will be increased between Copenhagen and Helsinki, and to Vienna and Frankfurt, home hubs of Star Alliance partners Austrian Airlines and Lufthansa.
Source: Airline Business
