New SAS strategy aims to shave 5% off unit costs

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Scandinavian flag-carrier SAS has given initial details of its new 4Excellence strategy, under which it aims to cut unit costs by up to 5%.

SAS chief executive Rickard Gustafson said that by 2015 the airline intends to make improvements to its commercial, sales, operational and people divisions. It will do this by building on the platform developed by the previous Core SAS strategy, which has cut unit costs by 23% since 2008.

Gustafson set a goal of further reducing unit costs by 3-5% annually out to 2015, describing this as an important prerequisite to achieving sustained profitability.

Savings will be achieved through a combination of continued cost reductions and an increased focus on improving productivity. The latter will be aided by rolling out the Lean quality and efficiency programme throughout the group.

The SAS Group also intends to cut its carbon dioxide emissions by 20% by 2015.

Noting that it faces competition from low-cost carriers on most of its routes, Gustafson said the airline intends to continue focusing on business travellers while also expanding its market share within the leisure travel segment.

Among the improvements to be offered will be its premium Economy Extra cabin on domestic routes within Scandinavia, as well as improving its EuroBonus loyalty programme.

Gustafson described the new strategy as one that set "high but realistic goals". Managers will be given the necessary tools for goal-setting, follow-ups and coaching of staff: "All employees are to understand how they contribute to SAS's overall goal," he said.