“They are caught in a death grip. No one wants to buy it.”
Following the emergency savings plan announced yesterday to keep SAS in the air, aviation experts are expressing doubts that it can work for long. SAS CEO Rickard Gustafson called the plan the “final call” in avoiding bankruptcy. Meanwhile, Anders Lidman, airline industry consultant and owner of the consultancy Aeropol AB, tells The Local that SAS will go bankrupt within 12 months. “It’s too late now”, he says.
“When you have a monopoly you don’t have to worry about costs. You can instead focus on service, and SAS was very good at that.”
Lidman blames a legacy of bad management and a view of the airline business that was stuck in the 1980s. SAS was very slow to respond to market changes, he says, such as the emergence of low-cost carriers and online sales, and it was also in error in focusing on Europe instead of opening up more long-haul routes. Neither has it invested in more fuel-efficient aircraft.
“They will never compete with the low-cost airlines in the bloodbath which is the European market”, Lidman says. “They are caught in a death grip. No one wants to buy it.”
As reported yesterday, SAS plans to cut SEK 3 billion in costs, sell a wide range of assets, reduce salaries and cut around 6,000 jobs.
[pictured: SAS A340; courtesy SAS]