Air Transport World

How SAS keeps 'em flyin'. (SAS Airline, includes related article on adjusting the target)

STOCKHOLM & COPENHAGEN-Imagine a crowded boxing ring with a bunch of middleweight and heavyweight fighters throwing punches at each other. Can any of the middleweights survive the melee? Middleweight SAS can and will, says jan Carlzon, president & CEO of travel conglomerate SAS Group and of SAS Airline, the group's flagship and largest unit. AU it takes is tough conditioning and nimble footwork.

This has called for strenuous muscle building, along with serious weight trimming. Strategic allances and partnerships, more nonstop and 1-stop flights to more destinations and expansion into travel-related areas such as the international hotel business have added muscle and stretched SAS's global reach. Weight trimming, painful at times, has involved restructuring of the organization, elimination of businesses and projects not considered strategically essential, and pruning the employment roster.

What the customer sees of an airline is its face-the planes, service, airport accommodations, schedules, on-time performance and the like. SAS is determined that the face will lose none of its appeal, regardless of organizational change. But the face is only a reflection of the health of the whole body.

One of the vital organs, of course, is the technical operation. In this article, ATW will examine how the Technical Division, headed by VPTechnical Director Krister Kalin, fits within the SAS Airline structure and how the restructuring has reshaped the division and affected its performance. Strong indications are that the change has been beneficial. The number of flight hours per technical employee has climbed and the number of employees per aircraft has dropped, both markedly. Technical Division employment totaled 3,763 in October, 1990, was 3,300 in August and should be 3,200 by the end of 1992. But as Kalin insists over and over again, "I am more interested in the quality of our work than the number of personnel." (The accompanying article gives the context in which the changes in the overall SAS organization have taken place.)

SAS Airline, as now constituted, consists of two major groupings business units and production units. The business units, the airline's interface with its customers, consist of the three Scandinavian regions and the International unit. The Technical Division is one of the production units, along with the Operations, Marketing Automation, Movement Control and Properties. The job of the production units mainly is to support the business units. The heads of all these segments report directly to Kiell Fredheim, executive VP and chief operating officer of SAS Airline. In the old organization, the segments now making up the business units reported to the Commercial Division-now eliminated-which "bought" the necessary aircraft, ground services and equipment from Traffic Services-also eliminated-and crews from Operations.

Now the regional chiefs, known as country managers, deal directly with the various supplying units. The new Technical Division structure, actually almost three years old but fine-tuned last year, was designed "to establish supplier-/customer relations within the division," the customer being the airline. The idea was to change the division from a production-oriented to a market or customer-oriented organization. As VP Kalin said, "we no longer say, we must have this equipment.' Now we say, 'is it good for business'? …

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