SAS has “very strong financial base” but needs to escape credit
Scandinavian Airlines is thinking about further cost-cutting initiatives on its long path back to profitability. SAS President and CEO Rickard Gustafson tells ATW that “we still need to find a way to further strengthen our profitability and generate more cash.” SAS has a “very strong financial base today”, but it also relies on credit, he said. To escape this credit and become more self-sufficient, “even more cost-saving efforts” are needed. However, he rejected the idea of a potential investor.
“Only we can develop a sustainable business on our own. When you have that, I’m sure this creates more interest in our company. We still have a strong brand position in Northern Europe. We are improving. This is good news.”
European business travellers make up 70% of the airline’s ASKs, he said, adding that this was a weapon in the battle against strong low-cost competitor Norwegian.
Long-haul operations will not be extended, instead relying on cooperation. “At the moment, a key growth for us is with strong partnerships, like a recently signed joint venture with Singapore Airlines, which shares the risks of growth,” he said.
As for its fleet, SAS has not yet decided which aircraft will replace five A340-300s, whose lease will begin to expire in the next few years. The A330 is “one of several options”. The airline’s last MD-80 will leave by 2014. The Stockholm Arlanda base will be an all-Boeing 737NG operation by 2013.
[pictured: SAS A340; courtesy SAS]