SCANDANAVIAN AIRLINES (SAS) has maintained recent growth but reported increased pressure particularly from competition by low-fare airlines operating in northern Europe. Latest traffic figures for March show total passenger traffic increased by ten per cent compared with the same period last year.
The airline recorded an improvement in passenger load factor figures. SAS carried 2.8 million passengers in March with a load factor of 62.3 percent.
In a statement this week, SAS said: “Indications for yields in March show continued strong pressure, but yield pressure is expected to be less than experienced in February. In general, growth has improved significantly on European and intercontinental routes. In March even intra-Scandinavian traffic improved in a market characterized by weak demand and increased competition.”
The airline said yields in January and February had been very weak, and this would impact on first quarter revenues. SAS is undergoing a restructuring program aimed at securing sustained profitability in the face of overall lower yields, and said its was proceeding according to plan. “Improvements in general demand and good traffic growth can be noted but due to the situation with continued yield pressure, the outlook remains caution,” said the airline in its latest traffic report.
SAS is organizing all airline operations in Norway in a single company, with the merger of Scandinavian Airlines and Braathens, to be known as SAS-Braathens. The new airline will serve routes within Norway and to the rest of Europe. “SAS-Braathens will have a low cost level that will enable us to seriously challenge the competition from the so-called low-fare airlines,” said SAS-Braathens President, Petter Jansen. “The customers will be the winners”.
SAS Braathens will initially have a route network comprising 41 European destinations, from Longyearbyen in the north to Las Palmas in the south. The route network will be served by a fleet of 50 aircraft, exclusively Boeing 737s.
"The coordination process between the two airlines will begin shortly and the aim is for integration to be completed by April 2005. This includes efforts to compose skilled teams at all levels of the new organization. The coordination process will be based on the regulations for operational transfers. Rationalization and efficiency measures shall not be implemented at the cost of flight safety," said Jansen.
SAS Braathens will be active in the market in May. The basis for the new operation will be the combined traffic program currently operated by Braathens and Scandinavian Airlines in Norway, reinforced by increased production and new routes.
New foreign destinations from Oslo will initially comprise Manchester, Geneva, Milan, Prague and London-Gatwick. Sandefjord’s Torp Airport will have a direct connection with the popular Spanish resort of Alicante.
The existing domestic route network in Norway will have a better offering, with more departures. This will initially apply to Oslo-Trondheim and the coastal route of Stavanger-Bergen-Trondheim.
More routes and departures will be introduced in autumn 2004 and spring 2005. The new airline will not operate intercontinental services. Overseas flights will be offered by the SAS Group’s existing intercontinental operation.
[eTN, 04-15-2004] |
