Air Transport World

'We plan & pray at the same time': SAS group CEO Joergen Lindegaard believes the company's future hinges on lowering costs, improving productivity--and keeping fingers crossed.(Scandinavian Airlines)(Interview)

Will scandinavian Airlines be one of the European majors or one of the European minors? Muses SAS Group President and CEO Joergen Linegaard during an interview with ATW. May be the question is premature. With a wrinkled brow and a hesitant smile; he leaves the answer unspoken.

Like his predecessor, Jan Stenberg, Lindegaard's introduction to SAS coincided with his baptism into the airline industry. However, unlike Stenberg, who in hindsight it is clear arrived at the bottom of a cyclical trough, Lindegaard took command in May 2001 just as problems at SAS and indeed in the entire industry assumed near-Titanic dimensions.

He barely had finished unpacking when the Maersk. Air price-fixing scandal exploded onto the front pages. That episode resulted in the departure of top SAS marketing executive and presumed heir apparent Vagn Sorensen (who now heads Austrian Airlines) and ultimately led to the en masse resignation of the SAS supervisory board.

Then came 9/11 and its commercial aftershocks. Barely a month later. On Oct. 8 the airline was devastated by its worst-ever accident-one in which it apparently was blameless-the ground collision between an SAS MD-87 and a business jet that wandered into its path in heavy fog at Milan Linate.

Last July, highly regarded Marie Ehrling resigned as group deputy CEO and COO of Scandinavian Airlines after 20 years with the company. She denies she was forced out by Lindegaard but her departure came as a further shock to a company still hurting from the Milan disaster.

As the self-proclaimed businessman stairline. "SAS has been particularly hard hit by the decline in premium traffic and the rise of low-cost carriers. It earned Sek2 13 billion ($250.4 million) in 2000, marking its seventh consecutive year of profit but in 2001 it lost Sekl 06 bilion. Drastic restructuring and cost-cutting measure taken after 9/11, including elimination of 3,600 jobs though voluntary and involuntary separations and the grounding of 21 aircraft improved the bottom line by an estimated Sek3.4 billion helping to reduce the 2002 loss to Sekl 32 million.

But the environment for the historically high cost airline remains extremely difficult, and Ryanait will make it even tougher when it opens its fourth continental base at Skavsta Airport 100 km south of Stockholm this month. "The barsh but inescapable truth is that although we have accomplished much we still have a long way to go. Lindegaard declared at year-end 2002.

"We plan and pray at the same times," he says wryly. …

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