SAS Group aims to complete the disposal of its grounded Bombardier Q400 fleet by the middle of next year amid efforts to urgently close its cost gap to its rivals.
The group has disposed of 12 of its 27 Q400 turboprops, which it grounded last year after a series of landing accidents and decided to remove from its fleet. The group expects to phase out another 10 in the fourth quarter. The group has since opted to acquire an upgraded version of the turboprop for Norwegian regional arm Widerøe.
Among the 12 Q400s already delivered are the three damaged examples. SAS expects all 27 aircraft to have left the company by the end of June next year. This month SAS expects to take delivery of its first new CRJ900, which is part of a batch ordered to replace the Q400s.
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Meanwhile, the group is continuing to explore various options for a future corporate structure. It expects to implement savings of SKr3-4 billion ($390-520 million) over 2009-11 in the context of its broad Strategy 2011 plan, to bring its cost base down to a level comparable to that of other companies.
"This cost gap is largely inherent in contract structures," says the group when it disclosed third-quarter results last week. "Due to the increasingly weak economy and the ongoing financial crisis, SAS has decided to initiate negotiations with the relevant trade unions during autumn 2008. Regardless of the choice of structural alternatives and solutions, it is of the utmost importance that we rapidly close the remaining cost gap we have in relation to comparable competitors."
Strategy 2011's current phase covers cost-savings of SKr2.8 billion and, by the end of September this year, measures corresponding to about 74% of this figure had been put in place.
SAS says the implementation plan has been delayed because collective agreement discussions last year did not result in improvements such as increased productivity.
The company has expanded the savings sought under its other main efficiency scheme, the short-term Profit 2008 initiative, from SKr1.1 billion to SKr1.5 billion.
This includes a capacity reduction of 18 aircraft and SAS says that, during the third quarter, it could "clearly see" the effects of the initiative. Under a separate restructuring Spanish subsidiary Spanair has reduced its capacity by 15 aircraft.
SAS says its board is continuing to "focus intensely" on examining various options for the structure of the company, in order to secure future growth.
Source: Flight International
