SAS to Downsize Unprofitable Scandinavian Units

SAS says ongoing contract negotiations with unions are not progressing toward the cost-saving goals it needs, according to a recent edition of the company’s internal newsletter.
As a result, it is looking at shrinking the company’s namesake airlines, collectively known as Scandinavian Airlines Businesses (SAB), by eliminating unprofitable routes and cutting frequencies, resulting in layoffs and aircraft disposals.
One SAB unit – SAS Sverige (Sweden) – laid off 120 employees in December while a further 150 were given a choice between transfer and redundancy.
SAS Group says it has succeeded in reducing costs by SEK14 billion ($1.8 billion) over the past three years through its Turnaround 2005 program, but SAB units continue to underperform and SAB is carrying out a route-by-route profitability analysis as a prelude to likely service reductions.

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