Scandinavian Airlines (SAS) has announced a major restructuring plan which its CEO described as the carrier’s “final call”.
In a statement released today, Copenhagen-based SAS announced a series of measures designed to save SEK3 billion (US$444m) per year and make SAS “less dependent on external lenders”.
“This truly is our ‘final call’ if there is to be a SAS in the future. We have been given this final chance to make a fresh start and to carry on these fundamental changes. I know that we are asking a lot of our employees, but there is no other way. I hope that our loyal and dedicated employees are willing to fight for the survival of SAS and for our jobs. If we do this, we will be able to invest in new aircraft in the long term and to further develop our operations. This will ensure that SAS will continue to play an important role for millions of people in Scandinavia in the future,” said Rickard Gustafson, President & CEO of SAS.
The new plan involves the loss of approximately 800 full-time jobs from the airline’s administration departments, outsourcing of ground handling operations, revised staff pension conditions and the divestment of assets worth SEK3 billion. Based on the success of the turnaround scheme, SAS has secured credit facilities worth SEK3.5bn until March 2015.
SAS has actually seen a rise in profits in the third quarter of 2012, as earlier cost-cutting measures took effect. The carrier’s net profits reached SEK434 million in Q3 2012, compared to SEK214m in the same period last year. Year-to-date however, the airline’s net profits have slumped 94% to just SEK25m.