GOODnight?
 

Could we all see this one coming or what... SAS launches their "Höstkampanj"! For 650 SEK you can travel round trip to most domestic destinations (with some restrictions).

According to SAS it is pure coincidence that this comes just as GOODjet are launching their domestic routes. Yeah right...

SAS vs. Color Air, SAS/Skyways vs. Gotlandsflyg etc. etc.

Here we go again!

Could kind of see this one coming.....

Yup, but isn't that the name of the game? Competion is supposed to be good for the public for that very purpose.

Quite right, the only concern is, for how long is this good for the general public. I.e. what is the durability of the GOODjet effort, because if they go belly up, I recon the SAS prices would have a tendency to "increase".. :rolleyes:

What exactly would you expect SAS to do?

Or put in an other way: If you were in the SAS management: What would you do?

KADS, what is the name of the game? That you decide to significantly lower your prices only at the very time that someone else is trying to get into the market? Is it good for the public if GOODjet is forced out of business - dont think so!

Brenoch - I couldnt agree more!

If I was SAS management or Mr. JL himself, I would ask myself what the heck Im doing in the aviation industry to start with...

Then, fire about half of the people making a living "flipping papers" all day! After that, (Im starting to enjoy being management...;)) I would tell the rest of the staff to wake up and smell the coffee! If things dont change soon, the SAS as you know it might not exist much longer! Alot of services could probably be sub-contracted at a much cheaper price. Flight- and Cabin crew have to work harder for the same pay.

"5 on 4 off" for CA's!? Something is seriously wrong in this company!

RTO - :) :D

An other "coincidence" is that the service level of certain SAS routes, say ARN-GOT or ARN-MMX (what do I know ;) ), have increased remarkably!

People complain that SAS ticket prices are too high. Then SAS lowers the prices and, now that is bad too, because that will "drive other companies out of business".

Well, no sh_t Sherlock!! That's the general idea. Life is a bitch and so is competition. We recently saw the end result of competition in Norway when, in effect, there was only one company left. At that point SAS became the bad guy and had to placate a bunch of politicians and buy BU. Gimme a break!! Now we cannot use our bonusprogram in Norway anymore. It is a tool in the COMPETITION!!!!!!!

Nobody will stop GOODJET or anybody else for that matter from joining up with some other major airline and gaining access to that airlines bonusprogram, or they can start their own.

In all sincerety let me just say that I wish all the upstarts good luck, they are going to need it!!

Competition IS good - the flying public get more options to chose from, and the operators need to stay on their toes to try to attract more clients.BUT pricedumping doesn`t benefit anybody except for the company that decides to dump their prices so that the competition doesn`t get any passengers because they don`t have strong enough financial background (read SAS is government owned :mad: ) to stay in the ratrace.

and YES we did see it coming:(

Skunkworks-

Before you work yourself up, no harm meant by my statement, but rather an observation.

E.g.
When Malmö aviation started competing with SAS on domestic Swedish routes, and enhanced the service largely like better food, and special services on Fridays, SAS soon followed with the exact same onboard service. Conclusion: Pax on both airlines enjoyed better service, and still do.

If you look at the ads running in the Swedish newspapers they are offering for example "10 round trip Cards" at 8900:- compared to Mavia/SAS 18400:-/18600:- respectivly (Figures taken out of the good ol' memory so don't hang me on errors)
But if you read the fine print that offer is only valid on a specific number of limited tickets, so how much would the standard offer be? My guess is another 50% so about 14000:-

Not that big of a difference compared to the number of departures and service being offered by the others.

I can see your point of start-ups being ushered out when the larger airlines goes on the attack, but a still see the public as winners in the long run....

Don't forget we had a low cost carrier competing on the same routes a few years back, EAC, I believe, so there will always be another one..... :)

To F.O.A.L.

While the three governments do hold the majority of shares in SAS, the company does not get any money from the governments. In other words, we cannot afford to just sit there and bleed money until the other guy dies, we have to EARN the money before we can spend it. And one other thing, being state controlled is not a good thing these days. It is seen, by investors, as an obstruction to running an efficient and quick reacting company.

While competition is good as it keeps you on your toes, it is frustrating when the means with which one competes are taken away or severely limited.

Ramrise, you said:

"Nobody will stop GOODJET or anybody else for that matter from joining up with some other major airline and gaining access to that airlines bonusprogram, or they can start their own."

Why would the low cost carriers want to start a bonus scheme, when they argue AGAINST such organized corruption?

(Before you say it is not organized corruption, consider this example: An oil company give me 50 liters of free gas for my own car when I have put in total 500 liters on the company car. Such a sceme would have been stopped immediately, right? Try to explain the difference between this and the bonus schemes...)

Stop this commision to people wasting their employer's money, and the competition has a chance. People fly A to B via X instead of the direct flights to get more of the bloody points!

SAS meeting the competition!? Yes but are they making any profit at those prices when they weren´t before? It is very obvious and expected of SAS to make such a desperate move! I predict SAS can sustain prices like that for one quarter, tops. Or have they somehow suddenly transformed the big moneyguzzling company into a lowcost one overnight??

The big looser in this "battle" will be the public, if SAS survives, or rather if GOODjet goes under. Then they will be deprived of a lowcostalternative with sustainability. If GOODjet survives, which I think they will, SAS will have to shave off tons of excess fat they are dragging along if they are to stay in business.

Jeg skjønner ikke hvorfor folk reagerer på at prisene endrer seg når konkurransen skjerpes. SAS-styrets oppgave er å sørge for at SAS tjener mest mulig penger(eller taper minst mulig). Prissetting er en viktig del av strategien for å klare den oppgaven. Noe av det første en økonomistudent lærer er at optimal pris i et konkurranseutsatt marked er mye lavere enn i et "monopol-liknende" marked. Sett i lys av dette ville styret rett og slett ikke gjøre jobben sin om de ikke satte ned prisen når det kom en konkurrent på ruten(og da burde eierne kreve nytt styre). (Her kommer et av problemene med statlig eierskap inn; staten får en dobbeltrolle der de eier deler av en bedrift samtidig som de prøver å skaffe bedriften størst mulig konkurranse.) Poenget mitt er at det ER LOV å sette ned prisen på et produkt!

Det som ikke er lov er fiendtlig prissetting der man bevisst flyr med underskudd MED DEN HENSIKT Å PRESSE KONKURRENTEN UT AV MARKEDET. Å avgjøre om et firma driver fiendtlig prissetting kan sikker være komplisert, men jeg tviler sterkt på at SAS gjør det i disse tilfellene med "kampanjepriser"(det har også blitt lavere priser i Norge etter at Norwegian kom). Begrunnelsen min for det er at disse prisene dreier seg om et ganske lite antall seter; seter som kanskje i stor grad ville vært tomme hadde det ikke vært for lavpriskampanjene. Så lenge vi snakker om et relativt lite antall biletter til seter som ellers ville stått tomme, vil SAS tjene penger så lenge bilettprisen er over "ID-nivå". Da er det ikke "umoralske" priser. Det er jo dette som gjør at Ryanair kan selge biletter til NOK 149(eller noe slikt) for Sandefjord-London.

Men likevel skjer det hver gang konkurransen endrer seg; media roper ut "Det var det vi sa; nå øker de prisene", eller "Det var det vi sa; nå dumper de prisene". Akkurat som at de var så geniale som kunne forutsi noe slikt. Mens i vikeligheten er det elementær lærdom for alle som har lest 10 sider økonomi.

Kommer helt an på hvordan de definerer "kampanje":D
Det har vært en tendens til å bortforklare ting ved å bruke andre ordsettinger slik at definisjonene passer best til situasjonen.
Hvis denne "kampanjen" er å bli kvitt all konkurranse ved å holde det gående med underskudd så er det ulovlig, men hvis de gjerne vil holde på kundene sine ved å tilby konkurrerende tilbud så kan man ikke klage.Sånn er business - man må tjene $$$:p

Laminar , I think your right. I don't consider it honest when they increse their standard for just as long a time it takes to blow away the compeditors only to revert to the same old crappy standard when mission is accomplished.

FOAL, you wrote:

BUT pricedumping doesn`t benefit anybody except for the company that decides to dump their prices so that the competition doesn`t get any passengers because they don`t have strong enough financial background ....


Well, it seems to me, that pricedumping is exactly THE tool, that the lowcost companies use as their primary competition parameter against "the big ones".

So what you say is basically, that pricedumping is okay, when the lowcost operators use it, but it's not okay, when "the big ones" use it??

CAVOC, to keep low prices all year every year is not pricedumping. When a major DUMPS it prices from a very high level to a low level trying to get rid of an entrant, THAT is pricedumping.

dump = throw down in mass, unload.....

Well Ole, you're right about that, but consider another kind of pricedumping, permanent pricedumping, that most lowcost carriers use in their advertisements:

Prices down to 50 kr. or even 1 kr. pr. seat fits the definition of pricedumping, in my opinion.
I refuse to believe that they are earning any money on those seats.... And we can probably even agree (?), that you lose money on a "50 kr. seat". So the vast majority of the seats are sold at much higher prices, and that's somewhat more difficult to find in the ads.

Isn't that pricedumping for the sake of attracting the costumers attention via the ads...??

Well there is a difference. A low cost carrier like Ryan has the 1 pund seats as advertising, not as mean to put out a start-up.

Still price dumping isn´t it knold, as the £1 is way below the cost of producing it. Even at Ryanair? Or unfair competition? Call it what you want!!
And how do you know that FR is not using it to throw out a competitor. Isn´t it exactly what they are telling here and there, that they aim to do? Actively using LH and BA in their ads!

CAVOK, when Ryanair sells tickets for kr 50 or less, I agree that is a kind of "dumping" as well, if not in a way relevant to the discussion that was going here.

Why anyone sells any ticket for less than say about kr 200 plus tax, one way, is beyond me. It only creates false expectations. Many who would normally travel for kr 2000 will stay home instead, if they can not get the 50,- tickets.

I have travelled for kr 40 plus tax once, for a return ticket. I would have travelled on the same flight if the price was kr 2000. That would have paid for 50 seats at my price. Nobody buyes anything on board Ryanair either, so I don't understand why they give it away. They seem to know what they are doing though...

Still the difference is that Ryanair has an outspoken policy about it and they have roughly the same offers all the time.

SAS has no policy to operate a low cost operation (even though I doubt that they could manage it).

So you mean to say, that it is ok to do this if the company has an outspoken policy on this"?
And not ok if the company has not said that it is a low cost company??

Do you mean to say, that that is how the rules regarding fair competition are written.

Me thinks you´re on shaky ground here knold!


I agree 100% that SAS should not be allowed to go in and sell tickets for a fraction of the normal price just because Goodjet/Norwegian, whoever shows up....only to raise prices to the old level as soon as competition is killed off!

But there are rules gentlemen. and if SAS breaks them, authorities will be on SAS´s tail. (SAS/DM) SAS must be allowed to compete as hard as they can within the law. And kill Goodjet if they can, within the law.
As much as you all just want SAS to roll over and be dead, as soon as a new little operator tries to wrestle pax away from SAS.

A little early for Laminar to start calling this a desperate move. Let the competition begin first.
Campaign prices are used by all airlines. And only on routes where there is competition. Whats so odd about that??

Funny btw. how gas prices are exactly...I mean exactly the same at the 4 different gasstations within 2 km´s of my house.
Funny that 1 L. of milk costs exactly the same at the 2 competing supermarkets near my house.

And I could go on and on.

Companies will always try to squeeze as much money out of the consumes as possible. When competition shows up, they lower prices to fend off competition. Happens everywhere.

This is not exactly a new move by SAS.. Many moons ago, a startup named transwede decided to start a scheduled service to a tiny town called Visby, situated on an island to the east of mainland Sweden.. Contracts were in the process of being signed with major companies and governmental institutions who regularly traveled on said route.. However, for some strange reason, SAS and their henchman at the time Linjeflyg managed to offer the same price and not only that, frequent flyer miles on the trips.. Doesn't take a rocket-science to figure out where the contract went now does it Ramrise ?

I do understand that the ones of you employed by flagcarriers are getting quite nervous.. However there is never an excuse for ignorance, especially in situations like these, when private investors are placing life and limb on the line to fight unfair (government backed!!!) competition.. And no, I do not mean they do it ideally, their objective is also to make dosh, however they make it fair and square..

By trimming an organisation to the slimmest there is and by focusing on the core-buisness (which noone can accuse SAS of doing, what with their hotels and all other pieces of crap they've got) you can offer flights, not for free (as MoL seems to think) but cheaper than what the general public has got to put up with for too long in your neck of the woods..

Many have tried, someone has yet to succeed, I just hope that competition authorities have their eyes on what SAS are doing now..

Best regards

I think Brenoch says it all

I think that a lot of what he says is wrong knold.
How do you know that those investors make it (dosh) fair and square.
In case you haven´t noticed, SAS is in the process of actually trimming the organisation. Shows in the last financial results.
In case you haven´t noticed, the SAS hotels are making money for the organsation. What other pieces of crap do you mean.
They just sold a little piece of crappy reservation system called SMART for 950 mill. Good deal.

Again, anybody will charge the pax what they can get away with. And as long as it is within the rules of competition, that´s exactly the system that you´ve all voted for. Capitalism..supply and demand.

Bad for Transwede, sure. But I guess that SAS/Linjeflyg in the end offered a better deal. I stand to be corrected on this, as I know absolutely nothing about that case.

Why don´t you wait and see, what authorities will say to all the ugly things that you have already decided that SAS will do to scre* Goodjet.

Oh, and when will you acknowledge that, yes governments own 50% of the stock in SAS. Private investors place life and limb on the line by owning the other 50%. SAS is not getting any money from governments. Happened many moons ago. It´s vice versa today. When will you all accept that.

In what way could a couple of hotels make up losses for what could only be described as the most vast exploration in over-administory trial ever!

The only way SAS made their bi-annual report as something good was to sell of some of their stocks in airlines and so forth...

SAS is doomed!



Discaimwer for spelling since I'm under heavy intoxication...

I'm glad you post exactly what I say.. :rolleyes: :rolleyes:

Oh and by the way.. No man alive is stupid enough to place life and limb in SAS stock..

It's merely balancing profits, if there are any in the stockmarket today.. I hear you pay a great deal of tax on stockmarket gains in scandi, which I assume make SAS a great deal for anyone finding themselves on the gain side.. :D

knold,

in that case you´re forgiven for the nonsense that you just posted:D :D

brenoch,

Yes, I said that I don´t know anything about the "Visby case", but that since SAS/LIN was choosen, they must have offered a better product. Was it deemed illegal back then?? If it was, shame on SAS and sorry for Transwede. If it wasn´t, what was then so wrong about it?? It was meant more as a request for you to explain me what happened.

Seems to me, that a lot more private investors put their money in SAS stock, than in Transwede or Goodjet. Would anybody be stupid enough to place life and limb in Goodjet stock, if it is so obvious to everybody that SAS is going to kill off Goodjet by using unfair means. Sorry pal, but you make as much sense as knold just did. Arguments instead of punchlines would be appreciated!

:D

As far as I know, no tax on stock gains below a pretty high limit here where I live. Again, whaddya mean?

I still wish Goodjet god luck. As I do Norwegian. I hope for a fair and square fight between all. But if you mean competition, you must allow for all players to compete within the rules. If you cannot prove now, that what SAS will do to Goodjet, is illegal and unfair then what are you arguing against??

Rgds Zico

Brenoch: you said SAS was government backed?? the biggest problem for SAS is that they are owned 50% by Governments. Give me some examples in the last ten years where it has benefitted SAS?? I do not think that there is any company under the "watchful" eye as much as SAS. Then you refer to hotels as;"pieces of crap", is a company that makes millions every year pieces of crap?? I actually think its excellent managament skills to devide your assets into different areas.
Knold: just to inform you; SAS made money in the second quarter in their "core" business, ferrying passengers form a to b. They expect a profit for the full year.
nch cfm

there's no way sas could have turned that huge loss into profit in that short period of time from flying passengers.....I smell Enron...

I think we`re also forgetting that low-price companies have a lot fewer employees per passenger and that helps keep the prices down.Remember that all company expenses are summed up to your ticketprice.It`ve also observed that the low-cost employees tend to put in a lot more hours than the traditional carriers` employees do.I.e. how many hours a month do Ryanair pilots fly and how many hours a month do SAS pilots fly?
...and how many people (who have absolutely nothing to do with aviation) are on the Board of Directors list at SAS?Maybe 3 government`s worth?And you know they want a stake in it too!

Freak, you´re correct.
SAS has a lot more people employed pr. aircraft than does low cost carriers. Thats one reason that SAS is more expensive. Those people are used for many things, such as finding your bags when we´ve lost them :D , (FR will make you write an email to Dublin) helping disabled pax at no charge (Ryanair will charge you £18 I believe it was, from another thread) etc. etc. etc. and a lot of other functions that I agree with you that SAS needs to cut away to be able to compete fairly and squarely within the law. SAS is grossly overadministrated if you ask me. Where and what exactly to cut away, I cannot tell you. Neither can Brenoch or Knold. We are only pilots, and none of us have the bigger picture.
Note that SAS is in the process of implementing a programme called ROSA, Reduction in Overheads of Support and Administration. They are going to cut 30% of expenses away in those areas, big money, along with other measures in other departments.
And yes, Ryanair pilots fly a lot more hours than we do. Something is being done about that too. If things go as planned, I´ll be flying 100 more block hours/year soon, on the same amount of working days mind you. That shows you how much of my duty time is spent not flying airplanes. Thankfully, for the future of SAS, this is being dealt with too.

So, assuming and hoping that the programmes are carried out.... I´m afraid that Knolds predictions (although admittedly said while intoxicated :D ) will come back to haunt him.

cheers Zico

I also heard they are getting new scheduling software which will accually make the staff work and that 5-4 is out the window.. Anyone employed, please confirm or deny..

The hotels started to make money when they sold off 50% (not sure it was infact 50%) to Radisson..

Zico: I just saw you are from 5 south, wherever that may be.. (with regards to the taxing of stockmarket-gains) ;)
My argument was infact hoping for fair competition, not saying it was unfair..

Brenoch,

Scheduling systems, something new is being proposed. Radically new I should say. But nothing decided yet, so can´t confirm anything. But see my earlier post to Freak on a leash.

Hotels,maybe so. But the hotels are making money. Isn´t that what counts.

. Hmmm, seems to me that this is where you said exactly that. It´s like you´ve already decided that SAS is bad and unfair, without waiting to see how they are going to compete. Or is your whole "case" built on the news that SAS will offer cheaper domestic flights in order to compete with Goodjet??

But I´ll join you in your hope for fair competition. I want to see no more big fines paid for ignoring competition rules.
And really, I´d like to see Goodjet do well. That way, maybe SAS could get itself a better image in the media. As it is today, everybody are so worked up (especially in Norway) about the fact that SAS is alone, that SAS is a favorite hate object of conversations.

5 south for holidays, 55 north for work. Sounds Ok to you? And no, I´m not bringing large amounts of money with me on those trips. :D :D

That said meaning competition hasn't always been fair..

Sorry, I'll be more articulate in the future..

rgds ;)

For 2002 SAS are estimated to make/save around one billion DKK, from the falling dollar! Then they are selling 95% of the shares in SMART for almost the same amount - another billion on the plus side...

Without these factors, in my opinion, there would be no way for SAS to show profit for 2002!

Within a week I think they should present their long-term growth plan (until 2005) - lets wait and see what could be in that.

You may be right. You may be spot on. I don´t know. What current numbers of money spent and money made, is your opinion based on?