Is SAS a “state-sponsored dinosaur in the process of dying”?
Struggling SAS once symbolised all that was great about the Nordic economic model – high wages, generous benefits, job security. But during the events of November, what remained of that idealistic picture vanished, the news agency Reuters writes. After years of slow reforms, the state-controlled airline embraced a tough-minded market-based transformation by taking an axe to costs.
But even with the recent do-or-die reforms, few believe it can compete with Norwegian or Ryanair. As the Norwegian newspaper Adressa recently put it, “SAS has gone from crisis to crisis. What we are now witnessing is a state-sponsored dinosaur in the process of dying.”
SAS was founded in 1951 as an example of trans-national cooperation after World War Two. It worked on linking the geographically isolated Nordic region to the rest of Europe and, just as importantly, between the Nordic nations themselves.
“SAS was in many ways a picture of the Nordic model,” said an editorial by the Norwegian public broadcaster NRK. “It was SAS we wanted – but maybe we end up getting Ryanair: low wages, low pensions and limited flights.”
The world has changed. SAS now exists in a hostile era of deregulation, cross-border trade and ever-increasing competition. Shared state interests have not helped. Ole Kirchert Christensen, a Danish airline industry consultant at the consultancy TravelBroker, says that SAS has several hundred people working at Copenhagen Airport with a 40% market share of flights, yet Norwegian manages its 15% market share with just eight employees.
“No matter what you do in SAS and how much you reduce the salaries for the Scandinavian-based personnel, you will never reach the same level as the low cost airlines,” he says.
[photo courtesy SAS]