“Private investors don’t want to be involved in SAS”
Norwegian Air Shuttle, cast off by SAS as a tiny carrier in 2002, has surprised everyone not only by surviving but now threatening to bury its former master. The two airlines are opposites in many ways – their balance sheets, the age of their fleets, their share prices, and now, it seems, their contrasting futures.
In a Reuters feature about Norwegian CEO Bjørn Kjos, 66, he criticises the SAS rescue plan. “It doesn’t make sense that taxpayer money is being used for this,” he says. “It should be food for thought that private investors don’t want to be involved in SAS. If private money is reluctant to invest, then why should states?”
Another contrast between the two airlines is cost control. Norwegian’s unit cost measured by operating cost per available seat kilometre is about $0.08 compared with about $0.12 for SAS, while personnel expenditure is just 16% of its revenue versus 30% for SAS. SAS CEO Rickard Gustafson earned SEK 9.2 million ($1.37 million) in 2011 plus another SEK 2.7 million in pension premium. This, Reuters points out, is more than the combined salaries of the top seven executives at Norwegian. However, Kjos controls 27% of Norwegian through an investment entity and therefore takes much more than his basic salary in the form of dividends.
[photo courtesy Norwegian]