Sweeping SAS reform to slash operations and raise capital

By David Kaminski-Morrow

SAS Group is to shed thousands of jobs in a sweeping restructuring that involves divesting airline shareholdings, outsourcing operations, cutting the fleet, and raising SKr6 billion ($720 million) through a rights issue.

In a re-organisation to focus on its Scandinavian market it will divest its shareholdings in BMI, Estonian Air, regional carrier Skyways, Air Greenland, and other companies. SAS Group has already agreed to sell its Spanair and Air Baltic shares.

SAS Group will also discontinue - or outsource to third parties - certain operations linked with its ground services, technical and cargo divisions.

The company will reduce capacity on its network to focus on profitable business routes. It will axe 16 aircraft from its main carrier Scandinavian Airlines' fleet - two long-haul and 14 short-haul.

Some 8,600 positions will be affected. About 3,000 jobs will be lost while the remaining 5,600 - of which 3,000 are linked to Spanair - will be associated with the divestments and outsourcing.

The Scandinavian company has named the programme 'Core SAS'. It says it is aimed at providing "key elements necessary to support a new, competitive SAS" which will include a "streamlined and simplified" organisation.

"To address one of the most severe economic declines that we probably have ever seen, in addition to our internal challenges, a renewed strategic approach is needed," says SAS Group chief Mats Jansson.

Implementation of the Core SAS programme will begin this year.

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