A long-awaited shakeup in the ownership of Swedish independent Transwede will see a shift towards charter operations and a retreat back into scheduled domestic services.
The change also sees the return of ex-SAS chief Jan Carlzon to the industry as president of new holding company Transpool and chairman of Transwede and sister company Nordpool - Scandinavia's largest tour operator.
Under the deal, agreed in mid-July after almost four months of negotiations, the ownership of Transpool will remain split 50:50 between KF Invest and Fortos, a unit of Volvo, until the end of the year. Two new shareholders, venture capitalists Nordic Capital and UK-based Electra Investment Trust, are supporting Transpool with a convertible subordinated loan, which allows them to take up a 25 per cent stake each in the first half of 1996. This reduces both KF Invest's and Fortos' shares to 25 per cent each.
Jan Ohlsson, chairman of KF Invest and Transpool, says option rights on Fortos' remaining shares will also be exercised during the first half of 1996 and 'will be picked up by the other three parties.'
Carlzon was brought in by Nordic Capital, who have teamed him up with Thomas Rosenqvist, the ex-president of Premiair, SAS' former charter subsidiary. Rosenqvist, the new president and chief executive of Transwede, and Carlzon have already started to implementing a restructuring aimed at cutting costs by 6 per cent.
The main cuts will come from laying off 180 employees, over 20 per cent of the staff, which should produce annual savings of SKr50 million ($7 million), says Rosenqvist. The carrier is also holding talks with a US and Swedish company about the sale of its maintenance division. Rosenqvist aims to outsource maintenance from October, which should produce further savings of SKr25 million per year. Overall, Rosenqvist is looking to take out SKr80-100 million from annual total costs of SKr1.5 billion.
Rosenqvist is looking for up to five B757s to replace six MD-80s. These aircraft will be used purely for charter operations, while the six Fokker 100s will continue on the scheduled domestic network.
During July, the carrier was also split into three separate business units. Regular covers scheduled operations, Leisure covers charter and Engineering encompasses maintenance.
The changes aim to realign the carrier towards the charter sector. Transwede aims to carry 600,000 charter passengers from the 1996 summer season - a 50 per cent increase. 'The cornerstone of our strategy is to focus on strengthening the strategic links between the tour operator [Nordpool] and the charter airline within Transwede,' says Ohlsson. But he denies that the carrier is about to pull out of scheduled operations. 'We will stick to scheduled operations and make them profitable but change the focus.'
According to Rosenqvist, Transwede will pull off the Stockholm-London/Gatwick route and concentrate on its five domestic destinations. The plan calls for an alliance with a major European partner, after former partner Lufthansa linked with SAS. KLM and Swissair are talking, and Rosenqvist hopes to find a suitor by October.
Poor scheduled performance has pushed Transwede into the red for the past three years but 1994 losses of only SKr7 million suggest the damage has been reversed. Ohlsson expects profits will return in 1996.
Source: Airline Business
