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SAS close to bankrupcy

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SAS close to bankrupcy

Old 12th Nov 2012, 14:47
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I travelled with this outfit a number of times between LHR and CPH/OSL/ARN during the 1990s when I worked in the airlines.

The one memory I had was the C-Class meal, served without fail on EVERY flight. Boiled fish & new potatoes served in 1/2 inch of molten butter - EEEUUURGH!!!
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Old 12th Nov 2012, 17:48
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Post The real deal

The real purpose of todays plan is union-busting in modern day scandinavia. Aside from the immidiate cost savings it will basically strip the unions of whatever power they still possess. And that will generate alot more money over the long term.

I am starting to feel like I work in a place where unions are not allowed.
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Old 12th Nov 2012, 18:31
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I'm sure that the management has plenty to do with the continuing failure of SAS to be profitable, but I don't think that you can explain the current slashing (and it is slashing) entirely upon union-busting.

The financial performance of SAS means that irrdlevant of who is to blame, radical steps have to be taken to stop the company closing down in the very near future, and I think most companies would take the same measures, in aviation or other industries.

Stand by and save the company first, then talk about T&C's and pay. Sorry because that sounds very pro-management but I think it's true in this case. I wouldn't want to be made redundant in the current climate, there are plenty of guys without a drive and the queue is getting longer each week.

Last edited by 170to5; 13th Nov 2012 at 00:08.
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Old 12th Nov 2012, 21:28
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The real purpose of todays plan is union-busting in modern day scandinavia.
Having known several union reps in Scandinavia once upon a time in the past, I observed that their unions got ridiculously powerful during that era. I´m not anti union, far from it, but I do think that as they gain strength many unions get carried away with their power, and their ojectives, demands and expectations became unrealistic and eventually unsustainable. Unfortunately without unions the pendulum will swing completely the other way.
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Old 13th Nov 2012, 01:08
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IMHO. If anyone remotely thinks SAS can compete fairly when labour cost in Denmark and Norway run 30-40% higher than Sweden and even more than the rest of Europe, you need to re-do your medical, with or without unions.

12% average pay cut just ain't doing it in the long run. Good luck

All bets on, SAS will do like the Swiss. Bankrupt the carrier, everyone gets the sack, restructure, rehire with 40% haircut. The model seemed to work for Swiss so it can't be that bad.
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Old 13th Nov 2012, 15:26
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Sadly this is what happens when you run three hub nowadays, have diversified fleet, and have to pay taxes in three different countries with high labour costs... and trying to lower ticket costs to compete with low-costers.

That just doesn't work anymore.
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Old 13th Nov 2012, 15:50
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Employees resisting SAS “ultimatum”

http://cphpost.dk/business/employees...as-“ultimatum”

"Danish employees showed their dissatisfaction with the plan today in Copenhagen, where members of the 1,400 member strong Cabin Attendants Union (CAU) refused to take part in a meeting with SAS managing director"



Not really surprised.

SAS tops European airline critical list - FT.com

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Old 13th Nov 2012, 16:07
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Sadly I fear SAS will ultimately fail. As the previous poster has shown the airline is struggling with the Danish pilots union this time but it has also struggled in good times with the competing demands of the various Nationalities involved Union and Government interests.

SAS have a good number of crew who remember the "Good old Days" of C class taking up 21 rows on an evening flight to Oslo from Heathrow. Those days are gone and sadly with it attitudes have to change to give any legacy carrier without a major International network a chance of surviving.

I agree with the complaint that SAS should have conducted initial talks in private but time to wake up and smell the coffee. SAS have 138 aircraft with 10 different makes/models not ideal. Norwegian air shuttle have 67 and 259 on order and moving into long haul.
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Old 13th Nov 2012, 16:24
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Who would have thought this ten years ago......

Norwegian Air boss looks beyond ailing SAS | Reuters
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Old 13th Nov 2012, 17:04
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SAS says this is an unfair comparison as Kjos - who controls 27 percent of Norwegian through his investment vehicle - takes far more than his basic salary in the form of dividends.
Incredible comment by SAS. So Kjos is paid by performance i.e. low salary and if norwegian sees profit he gets paid dividend. No profit no dividend. That's how it should be. See Lee Iacocca of Chrysler. US$ 1 in salary and all performance based.

As the saying goes, as you make your bed..... and unfortunately it boiled down to stubborn unions to sink the airline.
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Old 13th Nov 2012, 17:14
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No real news in that Reuters article - only a couple of facts that is outdated by let's say 6 months. Norwegian has now 68 Boeing 737s - 11x B733 and 57x B738. At the year end one more of B733 will be leaving the fleet, while this year's last B738 delivery isn't far away. The net growth next year will be 10x B738 + 3x B788 according to what is said in the Norwegian Q3-12 presentation.

SAS on the other hand seems to get in 3x around 12 year old B737, 1x factory new B738 and 3x A320 (2x 12 year old aircraft that flew for Spanair + 1x 6 year old) at the end of this year (provided they still stay afloat the coming Monday).
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Old 13th Nov 2012, 17:43
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Ramrise,

The real purpose of todays plan is union-busting in modern day scandinavia. Aside from the immidiate cost savings it will basically strip the unions of whatever power they still possess.
A very interesting comment.

You do understand that SAS is just about bankrupt, don't you? If SAS go bankrupt then no one has a job; not a single person. The only ways of not going bankrupt are to borrow more money, if someone will lend the money, or to reduce costs. Borrowing money will not stop SAS going bankrupt, it will just delay the inevitable.

How would you stop SAS from going bankrupt?

Med vennlig hilsen,

Hval

Last edited by hval; 13th Nov 2012 at 19:55.
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Old 13th Nov 2012, 23:26
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One of the problems I have seen as SLF around SAS is they seem to have cut costs already in the wrong places...
They charge similar prices to LH / LX / BA on European routes but give the customers near Ryanair service...
I choose to fly short haul European flights out of Scandinavia on airlines that will at least give me a free snack and a drink. For the same price you get a little extra....

One day airlines might realise that looking after the customer might bring back more business.

Today I got an email from SAS offering me 15% corporate bonus credit points if I actually paid them in advance before buying tickets. Not sure if I want to use them as a bank in these shakey times. Sadly SAS may end up like Swedish SAAB automobiles - a slow and painful demise.
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Old 14th Nov 2012, 07:35
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They believed their own BS

My experience goes back a few years, but SAS had a tendency to come up with marketing ideas they couldn't live up to:

The "Businessman's Airline", when their 767s had the worst longhaul BC seat.

The "Destination Services": one could fly from e.g. Trondheim to Bangkok via CPH and leave one's heavy winter coat in storage there.
Change of plan: return flight is now via Stockholm. I still wonder what they did with all those coats.
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Old 14th Nov 2012, 14:55
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Toffeez.

No. Sorry, I don't accept this.

Long-haul was not SAS's strongest product, but Euroclass within Europe had a strong reputation, and much repeat business. I doubt if any other European airline had such a mix of C to Y traffic.

I speak from having been in sales and marketing for SAS for nine years, where I met frequent travellers, their travel managers, and their business travel agents. SAS had an enviable reputation. It wasn't all marketing, but solid, front-line substance. They could more than live up to what they claimed. They were number one in punctuality and won the coveted ATW Airline of the Year award a the end of the eighties.

They had an outstanding product and well-motivated staff. I was proud to work for them, and I'm not normally a "company man"

However, as someone said earlier in the thread, they've simply not moved with the times in respect of costs and product. It's not 1987 any more.

Last edited by Midland 331; 14th Nov 2012 at 14:57.
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Old 14th Nov 2012, 15:21
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I don't know why there is so much surprise generated when yet another European national airline becomes insolvent. The business model of "lets buy some aircraft, operate some routes, pay ourselves lots of money then rely on the state to bail us out" has long expired.

Willie Walsh was saying several years ago that he only expected Lufthansa, KLM-AF and BA-IB to stay in existence long-term, plus a few of the bigger lo-co's. Seems like this is coming to pass: the economics of flag carriers operating out of small (population) countries has always been suspect.
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Old 14th Nov 2012, 17:16
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No doubt, SAS has stayed in the past. My latest international flight with them was the first Saturday in October - from Frankfurt to Oslo. The Boeing 737-600 was filled to the rim and many passengers didn't get on board at all (heavily overbooked?). The best comparison from the past is an utterly chaotic overbooked late afternoon flight I had with United Shuttle from ORD to EWR in the 1990s. On board the United flight I did get both free drinks and a chicken dinner, but not the same on board the SAS flight. I did buy an expensive dried out turkey sandwich that didn't have any turkey on it and bottle of water. The free tea tasted like hot brown tap water.

Compared with the three other segments I had on this Star Alliance trip to Nice, SAS fell through compared with Lufthansa and Swiss. No doubt, my next trip to Nice will be with Swiss only; flying with them is a real joy.
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Old 14th Nov 2012, 21:54
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Willie Walsh was saying several years ago that he only expected Lufthansa, KLM-AF and BA-IB to stay in existence long-term, plus a few of the bigger lo-co's. Seems like this is coming to pass: the economics of flag carriers operating out of small (population) countries has always been suspect.

Circa 1987, all SAS staff received a booklet from CEO Jan Carlson restating the core values of the airline and warning them of these very outcomes, namely a few mega-carrier amalgamations, and a drastic increase in competition. And the possible consequent demise of SAS.

The only way to avoid this was for the airline to buy into a carrier more centrally located in the continent to try and achieve hubbing benefits, and cut costs, neither of which have happened.

Last edited by Midland 331; 15th Nov 2012 at 06:49.
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Old 15th Nov 2012, 03:08
  #39 (permalink)  
 
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i had a brief look at the financial reports of some peer airlines and it's evident SAS will be in trouble even after this rescue package.

I give them 30% chance of longterm survival after this round of cuts.

The cost burden is to high and SAS needs a 35-40% cut in salaries (with associated social benefits) to be on an even playing field.

The unions can jump up and down as much as they wish, but this is reality.

Sad but true.
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Old 15th Nov 2012, 07:45
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No profit no dividend. That's how it should be
This is exactly what got us all (not just airliners) in the bad spot we are in. Short term profit. Works for while, then the big bang comes. A creative manager can always create profits from year to year, but a healthy company can´t be build without a long term strategy
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