SAS is embarking on a new round of radical savings in order to stay aloft in the highly competitive airline industry.
The news arrives less than a year after pan-Scandinavian airline implemented a round of savings through its ‘4Excellence’ strategy though the new round of savings suggests the plan has not brought the desired results.
Reports suggest that SAS is likely to demand staff accept pay cuts of between 15 and 25 percent in order to find the necessary savings.
“I think SAS’s has incredibly sharp leadership at the moment,” Richard Björnelid, who has written extensively about SAS, told Berlingske newspaper. “There is talk of a 25 percent pay cut. That is the information I have received from a centrally placed source. I suspect SAS’s leadership will simply say, “This is what matters, take it or leave it”
Björnelid added that it was likely that SAS employees would have to reapply for their jobs, though it is risky if too many choose not to.
Jyllands-Posten reports that SAS also hopes to save by cutting a number of middle-management positions after their responsibilities were condensed into the hands of fewer people.
“Previous rounds of savings led to many job functions being merged, while many middle managers were given higher positions,” an anonymous source told Jyllands-Posten. “They are now cleaning this up.”
New accountancy rules also mean that SAS is may lose almost all of its 12 billion Swedish kroner of capital through pension payments, leaving the company on shaky financial ground.
“SAS is sitting on a pension time bomb that could almost completely obliterate its equity,” Jacob Pedersen, a senior analyst at Sydbank, told Jyllands-Posten. “