Aviation
SAS has cut 34 billion Swedish crowns since 2001, but continues to lose money.
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Christmas snow melted away in Stockholm Thursday. The hope that SAS will submit a profit for last year is washed away long ago.
The loss was almost one billion Swedish kronor before tax in the last fiscal year, and the company put forward a new cut plan.
An examination of the accounts shows that the last three CEOs – Jørgen Lindegaard, Mats Jansson and Rickard Gustafson – has submitted cuts totaling 34 billion Swedish kronor.
It should give an overall improvement in profit of 41 billion.
Gustafson jerk on the issue of the cuts have had the effect SAS as it alleged.
– Oi, I can not actually answer, he said.
Blames inflation
While having Gustafson put forward two strategic plans under vignette “4Excellence” after he took over almost four years ago.
– I can only answer for the time I’ve been here, and these savings are implemented.
Gustafson plan acted among others that pilots and cabin crew had to accept cuts in salaries and pensions to save the company two years ago. The ground staff should be sold and other employees had to go. Widerøe, who made money were sold.
He acknowledges that several elements helps to reduce the effect of the cuts.
– We are not immune from such inflation, and that means some costs rising while we streamline the company. The net effect is not so easy to see. In addition, income fell significantly more than expected, particularly in the early years.
– Is it credible that profitability is improved by 41 billion?
– Let us call a spade a spade. If we had not made these savings, so it had been “game over” long, says Gustafson.
Cost level unchanged
In the airline industry are companies measured by dividing the total cost of each seat and every mile flown, so called unit cost.
A study shows that SAS has managed to counteract the effects of inflation, but the cost is about the same as ten years ago.
– I want not see too much on unit cost. If we want to get it down, then we can pour in with extra capacity and fly almost exclusively long flights to the Mediterranean. When falling cost automatically. For SAS, the short flight in western Norway equally important. It costs more, but the ticket sales are higher, says Gustafson.
Since 2012, he has managed to reduce unit costs by ten percent, but the gap is large down to competitors like English.
Gustafson will not say whether he will manage ten percent to.
– We have made major changes, but must continue to close the gap to be competitive with airlines in Europe.
Moves forcibly
To get down costs, SAS acquired Danish Cimber Air and moves 12 smaller jets with crew there.
– Cimber has a structure and working conditions that are correctly matched contest. That means, for example, greater flexibility in the use of crew and another salary scale, says Gustafson.
The management negotiates with pilots and cabin crew in Denmark to see how some of them will be moved to new and worse contracts.
– We have an open and honest discussion, but this is something that we can implement whatever according Danish law. It is an undertaking.
– Could it be appropriate to transfer a larger part of the business there?
– I would not rule anything. We have to relate to the new normal in the airline industry, where parts of the production is added to other companies. But that does not mean we are going to copy Ryanair or other, we must find our way, says Gustafson.
Gustafson has been SAS chief as long as its predecessor Mats Jansson held out.
– Does the “four more years”?
– We’ll see. I have no other plans than to continue with what I do, he said.
Stockholm: In summer locked SAS price of all fuel consumption out next January. When oil prices were at just above $ 100 a barrel. Meanwhile stronger dollar negative for the company, because the fuel becomes more expensive in Swedish kronor.
SAS paid 8.8 billion Swedish kronor for fuel in the last fiscal year, much like last year.
Swedish crown must strengthen and oil prices remain below $ 70 a barrel if the company should get considerably cheaper fuel next year.
– It is obviously annoying that we have not gotten the effect of cheaper oil. Other days I have been happy that we ensure the price level when it goes the other way. A successful risk management is about having a stable level over time, says Rickard Gustafson.
English had not hedged the price of fuel in that and had a positive net effect of cheaper oil and a stronger dollar in the third quarter.
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