Count to 10,000

[1993matias]

3586

Do you think SAS will survive the next five years without big cuts or sale of parts of the airline?

[Virgin Serbia]

3586

SAS won't survive the next 5 years regardless of how many cuts or spin-offs they make, and if they do, they will be reduced to a hollow shell with JetTime taking over all the european flying on contract from SAS. JetTime is pushing hard to take over more flying from SAS, and the new CEO for SAS Denmark is closely connected to JetTime, so it is certainly pointing in that direction. Blue1 will be shut down within 2 years, and JetTime Finland will take over with it's 737s and ATRs flying under the SAS brand.

[norge]

3587

I thought SAS was starting to make a profit again? I recall reading an article saying it had earned some millions in some financial quarter.

[1993matias]

3589

Yeah, but they have to differentiate themselves from the competition. Basically, they have two options: they offer low prices and bad service, or not so low prices and good service. Instead of following the low-cost airlines, they should stand up and make themselves clear that they're better. They already kinda do that while saying you get one bag free, but removing free drinks? That was stupid.

[Virgin Serbia]

3589

SAS did indeed make a profit last year, but that was more due to the divestment of various assets. They sold a ton of old 737 classics, Dash-8 Q400s, MD-80s and leased out the MD-90s to Delta. They also got rid of a few thousand employees, including around 300 old pilots who had an average salary of 180.000 dkk a month. The deal with those was that they would receive full pension (100.000 dkk a month for the rest of their lives) as compensation.


The problems with SAS today are not so simple that they just have to differentiate themselves. Competing directly with the LCC's is foolish, but they have to compete with them on ticket prices too, so offering a low cost option makes excellent sense. They just need to separate the economy cabin in 2, with normal economy and economy-light. I believe they have just introduced this.

They also need to become more consistent. Every 6 months they decide to change the strategy to or from the low-cost scheme of charging for everything. It is ridiculous, and the frequent flyers are pretty p*ssed about it.

They have a strong bias towards Copenhagen and Stockholm, while not offering very much for the rest of the country. They have almost no routes from Jutland. This means that people from Jutland and Funnen have to drive/ride/fly to Copenhagen, before connecting to another SAS flight to the destination. KLM and Lufthansa also offer 1-stop connections from Billund and Ålborg, often at lower prices and to more destinations. From Funnen I could drive to Hamburg airport in the same time I could drive to Copenhagen airport. And Hamburg offers better and cheaper parking (including an excellent and very cheap valet parking service where you drop off and pick up the car right by the terminal), and flights are cheaper too. And I won't have to pay the stupid bridge toll. Thats half the population of Denmark that is cut off from using SAS right there. It's the same in Sweden.

There is the horrible fleet utilization. Who on earth got the idea of operating the CRJ-900 between Copenhagen and London-Heathrow during rush hour?!?! Why do they feel a need to operate 2 flights on a 737/A320 between Copenhagen and Stockholm only 30 minutes apart? Upgrade to an A330 then!
And the strange fleet? Standardizing on 737NG and A320NEO for most of the airline, and then equipping the Finnish subsidiary with completely non-standard 717s

Finally they need to stop cutting their way out of the recession. They tried that for the last 10 years without success. Time to try investing in more routes and a better product.

[1993matias]

3591

They also need to become more consistent

I agree... Maybe they're afraid?

Time to try investing in more routes and a better product

Money, money, money. Where do you think they'll find the money needed? Who would want to make such a risky investment?

[Zach21GF]

3592

They will probably end up asking the governments again

And I am sorry, yes so far they have only postponed the 787 to 2020-22, but they may very well try and get rid of them. It seems more and more as they are streamlining their long haul fleet to only consist of Airbus'.

[Virgin Serbia]

3592

They are streamlining their long haul fleet to make most economic sense, not to a particular manufacturer. Airlines today are ordering a greater variety of planes that suit their needs more specifically, whereas in the past they would order 1 or 2 types and use them with slightly less efficiency.

Take a look at the British Airways fleet. 5 years ago they operated the 767-300, 777-200 and 747-400. In 5 years they will have a fleet of 787-8, 787-9, 787-10, 777-200, 777-300ER, 747-400, A350-1000 and A380-800. Eventually the 747-400 and 777-200 will leave, but it confirms that they are looking for planes that suit particular routes a lot more than 10 years ago.
American Airlines will go from a fleet of 777-200 and 767-300 to a fleet of 767-300, 777-200, 777-300ER, 787-8, 787-9, A330-200, A330-300 and A350-900.

I am not certain that Delta will keep it's order of 787-8s either, but they need to replace 58 767-300ER, and the 787-8 is a much closer match than the A330-900, which is only slightly smaller than a 777. Some routes can sustain a bigger plane, but some certainly can't, and the 757-200 routes probably won't. Furthermore, they ordered the 787s at a time when 787s were far cheaper than today, so they are actually a really great bargain.

[1993matias]

3594

That will make for awesome fleet pages in their in-flight magazines

[norge]

3595

I love those pages, but I haven't flown SAS in 5 years and Norwegian's fleet page is the most boring ever.

[Virgin Serbia]

3595

Don't worry. From the cabin all airliners look alike. The cockpit is what it's all about.

[1993matias]

3597

Cabins differ, just like cockpits, just more subtly

[Zach21GF]

3598

Delta is replacing their 757's with 737-900ER's and A321's. And the fact that they are getting larger aircrafts may very well be in response to the projected growth of the industry, more passengers = larger planes as the airports only have so many slots.

And don't pretend like streamlining to one manufacturer is not a legit thing
Many airlines tend to go that way to cut training expenses.

[1993matias]

3599

Good thing there's only a handful manufacturers, imagine if the market was shared by dozens?

[Virgin Serbia]

3599

Delta has 142 757s and 16 767-300As that are to be replaced, but only orders for 45 A321s and 70 737-900ERs, in other words a further 43 need raplacement. They also have 117 MD-80s that need replacement.

As for the streamlining of fleets to one type, or the training expenses thing, that was before fuel costs increased by 350%. Fuel savings and optimizations by now far outweigh training expenses. The training issue was really only marketing. Cockpits were indeed familiar, but you still need the complete typerating when going from one type to another, neglecting the savings. The maintenance and spare parts costs have been drastically reduced since the engine manufacturers began offering power-by-the-hour deals, everything except plane and fuel included. Streamlining of fleets is a thing of the past for airlines of this size.

Airlines are indeed upsizing from smaller planes to bigger ones, but so far no airlines have decided to replace a plane with one that seats twice as many passengers. And keep in mind, it is afterall Delta who chose to replace it's 747-400s with A350-900s, thereby actually downsizing