ALEXANDER CAMPBELL / STOCKHOLM
Strong competition is putting the future of the Scandinavian Airlines (SAS) long-haul operation in doubt, says the airline's new chief operating officer Sören Belin. "It is a tricky question whether long-haul will be a sustainable business," says Belin, who joined SAS in February. "If plan C [the latest round of restructuring] delivers, all our plans will be sustainable on all routes - but it is still very tough to see when we can expand."
While origin and destination traffic is holding up, Belin says SAS's location can be a disadvantage for connecting traffic. "There is an oversupply...in connection traffic...for example to Seattle," he says, adding: "It is justifiable to question whether we can compete in the connection market."
With long-haul expansion ruled out, the airline's Boeing 767-300ER fleet will be phased out this year following its replacement by Airbus A330-300s and A340-300s. "We do not plan to use [the 767s] for next winter...hopefully we will sell them somewhere," Belin says.
While SAS's latest reorganisation will give the managers of its long-haul operation a freer hand, it will also impose new financial discipline. The airline will be split into four semi-autonomous units, three running short-haul and domestic services from hubs at Copenhagen, Oslo and Stockholm Arlanda, and a fourth to operate long-haul services.
Belin says that any subsidies to the long-haul operation, in the form of unprofitable services acting as "feeders", will have to end. The units "will have to pay each other to run the services they want, or fly them themselves", he insists.
Belin rules out mainline fleet changes, saying the airline does not have the finances to "start exchanging the fleet", but says SAS Commuter may acquire a regional jet fleet. "We need a decision this autumn to fly them by 2005," he says, but adds Star Alliance's insistence on a common standard is delaying matters. The Bombardier Dash 8 Q400 turboprop fleet will move to secondary routes.
Source: Flight International
