Air Transport World

SAS feels heat from internal, external pressures.

SAS feels heat from internal, external pressures

These are eventful times for Scandinavian Airlines System. The concession from the governments of Sweden, Denmark and Norway, under which it operates, comes up for renewal this fall, and there are other airlines looking for a piece of SAS' traditional action. European deregulation is coming ever-closer, and there are some big and expensive re-equipment decisions on the horizon.

Jan Carlzon, group president and CEO (he handed over day-by-day running of the airline from April 1 to be able to concentrate on the issues mentioned above) does not gloss over the problems, but remains confident that the company has a great future. He told ATWhere, "Our concession is usually negotiated for ten years, but this time we are asking to go through to the year 2000, because before we make heavy investments in new aircraft, or in changing the existing fleet, we must know what kind of business we are going to run.'

He and his management team are eyeing in particular the stated aim of the Norwegian carrier Braathens SAFE to win licenses to operate international scheduled services to European business centers such as Paris, Brussels and Manchester. Carlzon went to Oslo, the Norwegian capital, recently to ask publicly, "How long will it be before the Swedes decide that their participation in SAS is no longer meaningful? Sweden is the only country which is disadvantaged by its participation in SAS but, at the same time, it is the only country that does not complain.'

While prepared to see small, non-SAS operators feed traffic into SAS hubs, he remains strongly opposed to larger Scandinavian airlines being allowed, for example, to fly from Norway to Hamburg, so feeding Lufthansa with traffic.

"If the Norwegian authorities should permit companies other than SAS to fly from provincial centers in Norway direct to European destinations, the entire strategy of a Scandinavian air traffic system would collapse,' he warned.

Accepting the message

People in Scandinavia tend to listen to Carlzon. He came to SAS in 1980 at the age of 39 from running the Swedish domestic airline Linjeflyg, and at a time when SAS had accumulated a two-year deficit of $30 million after 17 years of consecutive profit. Investing $25 million in service and product improvements, and switching the accent to business travel, he rapidly turned SAS around so that group income in fiscal 1984-85 totaled around $150 million. …

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