Category Archives: Scandinavian Airlines-SAS

SAS lays off nearly 11,000 employees in Scandinavia

SAS has issued this status report and traffic figures for March 2020:

As an effect of the COVID-19 pandemic and the travel restrictions imposed by many governments, SAS capacity was reduced by over 45% compared to last year. During April, almost all flights will be canceled except for a few domestic routes in Norway and Sweden.

Just over one month has passed since we started being severely affected by the Coronavirus crisis, and we are now in a situation never before experienced. For the first time in the history of SAS, we are not offering any scheduled international flights. Since Monday this week, we are only operating a limited domestic network in Norway and Sweden. In Norway, we are serving more destinations than in Sweden following an agreement with the Norwegian government.

We remain at the disposal of public authorities and continue to play an important role in providing critical services for the Scandinavian society, including bringing home stranded citizens from various parts of the world and transporting critical medical equipment. It is important for us to contribute when and where we can in these unprecedented and challenging times. However, these flights do not compensate for the significant loss in revenue due to the travel restrictions.

In the light of the sharp decrease in revenue we must continue to adjust our costs to the extent possible. We have been forced to temporarily lay off a majority of our employees. At time of writing, nearly 11,000 employees have been temporarily laid off in Scandinavia. We have also given notice of permanent redundancy for some 120 positions in Sweden.

When the COVID-19 crisis struck with full force, SAS enjoyed a strong financial preparedness. Naturally, this has been beneficial in this difficult situation due to the travel restrictions imposed by the governments. We are pleased that Denmark, Sweden and Norway are providing some financial support, however the earmarked amounts will not suffice to secure and safeguard critical infrastructure if the situation is prolonged.

SAS has safeguarded airline traffic in Scandinavia for over 70 years and we miss being able to welcome our customers on board what we call our second home. I hope to be able to resume safe and reliable operations as soon as possible, but until then I would like to thank our customers for their patience and support, and my colleagues at SAS for their dedication to SAS and our societies during these difficult times, says Rickard Gustafson, CEO SAS.

SAS scheduled traffic Mar20 Change1 Nov19- Mar20 Change1
ASK (Mill.) 2 288 -44.9% 16 462 -9.7%
RPK (Mill.) 1 113 -61.9% 10 710 -13.6%
Passenger load factor 48,6% -21.7 p.p. 65.1% -2.9 p.p.
No. of passengers (000) 995 -59.6% 9,149 -12.6%
Geographical development, schedule Mar20            vs.           Mar19 Nov19-Mar20     vs.    Nov18-Mar19
RPK ASK RPK ASK
Intercontinental -69.9% -55.6% -18.4% -13.0%
Europe/Intrascandinavia -59.3% -42.1% -10.7% -8.5%
Domestic -52.4% -32.2% -10.1% -6.2%
SAS charter traffic Mar20 Change1 Nov19-Mar20 Change1
ASK (Mill.) 103 -53.7% 818 -7.6%
RPK (Mill.) 74 -63.5% 731 -9.9%
Load factor 71.4% -19.3 p.p. 89.3% -2.3 p.p.
No. of passengers (000) 25 -64.0% 241 -8.6%
SAS total traffic (scheduled and charter) Mar20 Change1 Nov19-Mar20 Change1
ASK (Mill.) 2 391 -45.4% 17 280 -9.6%
RPK (Mill.) 1 187 -62.0% 11 440 -13.3%
Load factor 49.6% -21.8 p u 66.2% -2.9 p.p.
No. of passengers (000) 1 020 -59.7% 9 390 -12.5%

1 Change compared to same period last year p.p. = percentage points

Preliminary yield and PASK Mar20 Nominal change FX adjusted change
Yield, SEK 1.02 +3.7% +4.1%
PASK, SEK 0.50 -28.3% -28.1%
Mar20
Punctuality (arrival 15 min) 88.8%
Regularity 86.6%
Change in total CO2 emissions, rolling 12 months -7.4%
Change in CO2 emissions per available seat kilometer -3.3%
Carbon offsetting of passenger related emissions 33%

Definitions:

RPK – Revenue passenger kilometers
ASK – Available seat kilometers
Load factor – RPK/ASK
Yield – Passenger revenues/RPK (scheduled)
PASK – Passenger revenues/ASK (scheduled)
Change in CO2 emissions per available seat kilometers – SAS passenger related carbon emissions divided with total available seat kilometers (incl. non-revenue and EuroBonus), rolling 12 months
Carbon offsetting of passenger related emissions – Share of SAS passenger related carbon emissions compensated by SAS (EuroBonus members, youth tickets and SAS’ staff travel)
From fiscal year 2020 we report change in CO2 emissions in total and per Available Seat Kilometers (ASK) to align with our overall goal to reduce our total CO2 emissions by 25% by 2030, compared to 2005.

SAS aircraft photo gallery:

SAS will continue to operate the following routes and destinations with limited service

SAS has further clarified the routes it will attempt to operate:

In the coming weeks, SAS will continue to operate the following routes and destinations with limited service:

•    Domestic: All routes with few exceptions
•    Intra-Scandinavia: Routes between the Scandinavian capitals as well as Copenhagen to Bergen, Gothenburg and Stavanger
•    Europe: Routes to Amsterdam, Brussels, Dublin, Frankfurt, Helsinki, London Heathrow, Manchester, Paris, Reykjavik, Zurich, Alicante, Las Palmas, Malaga, Palma de Mallorca, Nice and Athens
•    USA: Copenhagen-New York, Copenhagen-Chicago and Stockholm-New York
•    Asia: Copenhagen-Tokyo

For the time being and to a limited extent, SAS will also serve other destinations in Finland, Germany, Switzerland, Portugal, Spain and Turkey. SAS will continue to adjust the traffic program based on the demand situation and valid travel restrictions.

SE-RJX

Above Copyright Photo: Scandinavian Airlines-SAS Boeing 737-76N WL SE-RJX (msn 34754) MUC (Arnd Wolf). Image: 949407.

SAS aircraft slide show:

 

SAS to shut down most of its operations, will lay off 10,000 employees

Scandinavian Airlines-SAS has made this dramatic announcement:

As an effect of the coronavirus (COVID-19) outbreak, and the measures that authorities have taken, the demand for international air travel is essentially non-existent.

Therefore, SAS has made the decision to temporarily halt most of its traffic starting Monday March 16 until there are yet again conditions to conduct commercial aviation.

With consideration to our customers SAS will within the next few days, as far as it is possible maintain certain traffic in order to enable return flights from different destinations.

 

We will be at the disposal of the authorities to on their behalf take home stranded citizens or maintain infrastructure important to society, as far as possible.

Further, this means that SAS is forced to temporary work reductions which comprises up to 10,000 employees, which is equivalent to 90 percent of the total workforce.

The reductions will be implemented through all parts of the operation, according to national regulations.

SAS is carrying out these measures for the purpose of return to normal operation as soon as possible.

SAS aircraft photo gallery:

SAS suspends flights to northern Italy

Scandinavian Airlines-SAS has made this announcement:

Due to the current situation in Northern Italy regarding the Coronavirus outbreak, the Ministry of Foreign Affairs of Denmark has published new travel recommendations.

The recommendation is to avoid unnecessary travel to the region. The safety of our passengers and crew being our first priority, SAS has therefore decided to suspend all flights to and from Milan, Bologna, Turin and Venice from March 4 until March 16, 2020.

All affected passengers will be notified.

SAS aircraft photo gallery:

SAS reports on its fiscal first quarter

Scandinavian Airlines-SAS announced its fiscal first quarter results and outlook:

SAS STRENGTHENS ITS MARKET POSITION

Our first quarter of 2020 was characterized by passenger growth and a strengthened position in the Scandinavian market. Operational improvements also resulted in increased robustness and customer satisfaction. However, a strong revenue growth was offset by negative currency and IFRS 16 effects, resulting in earnings below the same period last year.

NOVEMBER 2019 – JANUARY 2020

  • Revenue: MSEK 9,707 (9,405)
  • Income before tax (EBT): MSEK -1,087 (-576)
  • Income before tax and items affecting comparability: MSEK -1,078 (-724)
  • Net income for the period: MSEK -861 (-469)
  • Earnings per common share SEK -2.33 (-1.25)
  • First quarter with IFRS 16 accounting standard

SIGNIFICANT EVENTS AFTER QUARTER END

  • Charlotte Svensson appointed as SAS new Chief Information Officer as of 1 February 2020
  • New agreement signed with Danish union, FPU, tailored for future regional production

OUTLOOK

  • SAS expects to deliver a FY20 EBIT margin before items affecting comparability of 3-5%, subject to limited impact of COVID-19

We continued to note strong demand for our services in the first quarter of fiscal year 2020. Revenue increased more than 3% to SEK 9.7 billion, mainly driven by an increase of nearly 100 000 passengers.

Total expenses before items affecting comparability, increased over 4% compared with last year due to unfavorable currency movements.

As a consequence of unfavorable currency movements and the effects from IFRS 16 accounting standard, adopted on 1 November 2019, earnings before tax and items affecting comparability amounted to MSEK -1,078. This represents a decrease of MSEK 354 year-over-year and is in line with our guidance communicated at the end of last year.

Despite a weaker quarter from an earnings perspective, our cash position remains strong and is supported by improved forward bookings ahead of the summer season.

COMMERCIAL DEVELOPMENT

I am very pleased that our improved operational quality and customer offering, our dedicated focus on sustainability and introduction of new aircraft continue to attract customers. In a challenging market, our strong customer offering has resulted in a passenger increase of 1.5% and improved our market share in Scandinavia by 1.6 percentage points to 29%.

Ingegerd Viking, the first of eight Airbus A350s on order, had its inaugural flight from Copenhagen to Chicago on January 28, 2020. The passengers on board the new aircraft experienced a comfortable flight, in a cabin with new seat models and unique customized SAS solutions.

Aircraft operations account for over 99% of our greenhouse gas emissions. Therefore, fleet renewal is our most important initiative to reduce our environmental impact and the Airbus aircraft are the most fuel efficient on the market. In the quarter, we phased in eight Airbus A320neos in addition to the aforementioned Airbus A350. This means 15–30% lower fuel consumption and CO2 emissions compared with the aircraft they replace. During FY20, we expect deliveries of three additional A350s and six A320neos, which will further reduce our environmental footprint.

Until future technology enables zero-emission aircraft, we will continue our efforts to increase usage and stimulate supply of sustainable aviation fuels. Since we provided the option for our customers to add biofuel to their SAS tickets, almost 10 000 travelers have added biofuel to their journeys. This interest shows that a growing number of customers wish to contribute to more sustainable air travel.

At the start of the quarter, we launched new packaging for the New Nordic by SAS food concept, which eliminates up to 50 tons of plastics per year. This is one of many important initiatives in maximizing the use of sustainable materials in the customer offering.

We were also happy to announce that SAS and Apollo have extended their partnership for the 2020 summer and winter season. The agreement is worth around SEK 1.4 billion and we look forward to welcoming Apollo customers on board from 23 locations in Sweden, Denmark and Norway on their way to 26 destinations in Europe.

Norwegian Sykehusinnkjøp also entered into a four-year contract with SAS, as the preferred airline for patient and employee travel on the largest routes in Norway. The healthcare companies spend around MNOK 400 annually on airline travel, and the decision to choose SAS was based on a combination of price and departure schedules.

OPERATIONAL DEVELOPMENT

The ongoing work to improve our operations is reflected in a substantial improvement in operational performance. Compared to last year, punctuality increased 4.2 percentage points to 84.2% while regularity remained high at 98.7%.

Although weather was favorable for airline operations during the period, we also noted positive effects from the new planning processes implemented in FY19. These processes have resulted in a robust production scheme delivering tangible results with over 30% reduction in the average number of delay minutes per flight.

We know that punctuality is the single largest driver for customer satisfaction. Compared to last year, customer satisfaction increased three points to 74. In the month of January in isolation, the customer satisfaction index reached 75, which is the best result in many years. I would like to recognize our employees whose dedicated work is behind the improved performance and customer appreciation.

Productivity measured as pilot and cabin crew block hours per quarter, declined 10% and 2% respectively. The decline is explained by the required Airbus training as Arlanda becomes our second Airbus-base in FY20. Short-term, productivity will be negatively impacted before the benefits from a single-type fleet start to materialize.

One of the points I highlighted in the fourth quarter, was the need to evaluate how to renew the fleet of midsized aircraft servicing regional routes. Approximately 20% of the network is served with our current midsized Airbus A319 and Boeing 737-700 aircraft. Serving regional routes with aircraft of the right size is important from both sustainability and financial perspectives. However, these aircraft will need to be replaced in the next few years.

Before proceeding, there are several prerequisites that need to be fulfilled before a new order can become a reality. Firstly, we must ensure that each entity within our operating model is based on single-type fleet in order to minimize cost and complexity. Secondly, we need to have crew agreements tailored for regional operations in Scandinavia. Thirdly, we need to be able to select and source proven aircraft types suitable for reliable operations in Northern Europe.

Related to the second requirement we have made some progress. We have now signed an agreement with the Danish union, FPU, tailored for future regional production. The agreement fulfills the requirements of locating midsized regional production in Scandinavia, with local recruitment on Scandinavian terms and conditions. With this in place, we will continue our intensive efforts to address the other prerequisites, as well as continue to work with all our unions to ensure that we lay the best foundation for the future.

AFFIRMED FULL-YEAR GUIDANCE

We are encouraged by the increase in passenger numbers and maintained yields supporting strong revenue development. At the same time, the economic outlook remains uncertain and the outbreak of the COVID-19 virus adds additional concerns regarding a slowdown in key economies that may impact customer demand negatively.

Our exposure to mainland China is relatively low, with the routes to Shanghai and Beijing carrying some 250 000 passengers annually. The revenue loss from suspended flights during February and March is expected to amount to some MSEK 200. As long as the COVID-19 outbreak is contained in scope and the suspension of flights is isolated to the winter season, this should only have a marginal impact on our earnings. We are continuing to monitor developments and are maintaining close dialogue with the relevant authorities. The safety of passengers and employees is our highest priority and we need to see a positive development before recommencing flights to these regions.

The Swedish and Norwegian kronor remain weak against the US dollar and the Euro, thereby increasing our costs as well as price levels for customers that travel abroad. On the other hand, the recent decline in fuel prices represents a positive development.

After taking into account the supportive revenue development as well as the somewhat increased economic uncertainties, we can affirm our fiscal year outlook of an EBIT margin before items affecting comparability of 3–5%, given a marginal impact of COVID-19 that allows us to resume normal operations before the summer season.

I want to thank you for your interest in SAS and look forward to welcoming you on board one of our 800 daily flights.

Rickard Gustafson,

President and CEO

Stockholm, 26 February 2020

SAS aircraft photo gallery:

SAS extends Chinese flights cancellations until March 29

Scandinavian Airlines-SAS issued this statement:

The safety of our passengers and employees is always our highest priority. Due to the situation in China regarding the Coronavirus SAS has decided to prolong the period for suspending its flights, to and from Shanghai and Beijing, until March 29.

Refunds and rebooking possibilities are offered for affected passengers.

Hong Kong will be serviced as scheduled, and SAS will continue to monitor the situation in close dialogue with authorities. Customers traveling to, from or via Hong Kong may voluntary change their reservation or request a refund.

SAS aircraft photo gallery:

SAS extends the suspension of flights to China

SAS has issued this statement:

The safety of our passengers and employees is always our highest priority. Due to the situation in China regarding the Coronavirus, SAS has decided to prolong the period for suspending its flights, to and from Shanghai and Beijing, until February 29.

SAS will also close sales for all flights to and from Shanghai and Beijing until March 15.

Refunds and rebooking possibilities are offered for affected passengers. Hong Kong will be serviced as scheduled, and SAS will continue to monitor the situation in close dialogue with authorities. Customers traveling to, from or via Hong Kong may voluntary change their reservation or request a refund.

The airline also issued this statement:

Effective February 2, 2020 23:00 CET, the US authorities (TSA) has issued new requirements for passengers traveling to the US. The new requirements are valid for passengers who has been present in mainland China within the preceding 14-days of the date of the individual’s entry or attempted entry into the United States.

All airlines must question each passenger to determine whether the individual has been present in Mainland China within the preceding 14-days of the date of the individual’s entry or attempted entry into the United States.

If presence cannot be determined, the foreign air carrier must: Examine the passport for entry and/ or exit stamps and also examine the passenger PNR.

If determined that passenger has been in Mainland China, the passenger must only arrive the United States to the following airports when traveling with SAS: Chicago (ORD), Los Angeles (LAX) or San Fransisco (SFO). Effective 03FEB20 – New York (EWR) and Washington (IAD) has been added.

SAS other destinations in the United States, Boston (BOS) and Miami (MIA), are not cleared to accept passengers who have been present in mainland China within the preceding 14-days of the date of the individual’s entry.

Passengers will be questioned along with the other questions SAS already are obliged to perform for flights to the United States.

SAS also announced the delivery of the second Airbus A350-900 (SE-RSB):

Over the weekend SAS Chief Pilot Thomas completed our acceptance flight of our second Airbus A350-900.

All photos by SAS.