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SAS to sell Spanair, BMI and Air Greenland stakes

Scandinavia's SAS Group is to sell its stakes in three airlines and considering the future of its other businesses within the group as part of a strategy to focus on its core business of flying to, from and within Northern Europe.

SAS Group, a Star Alliance member, is selling its stakes in Spanair, BMI and Air Greenland and is evaluating the future of its SAS Ground Services, SAS Technical Services and Spirit Air Cargo Handling divisions.

The shake-up comes as part of SAS Group’s 2007-11 strategy which it plans to focus on its core business of providing flights to, from and within Northern Europe.

SAS Group says: “Airline operations will be operated by Scandinavian Airlines Danmark, Norge, Sverige and International, Blue 1, Wideroe, Air Baltic and Estonian Air. Holdings in other airlines, Spanair, of which it owns 94.0%, BMI, 20% and Air Greenland, 37.5%, will be sold.

“The future structure and roles of other operations, such as SAS Ground Services, SAS Technical Services and Sprit, will be evaluated. The purpose is to determine which parts of its operations SAS should continue to operate on its own and which parts should be operated by other players.”

SAS Group CEO Mats Jansson is aiming to increase pre-tax profits by SKr4 billion annually between now and 2011 through a restructuring plan which includes the sale of three of its airline interests.

This morning SAS Group revealed its plan to dispose of its stakes in Spanair, BMI and Air Greenland. It is also evaluating the future structure and role of its SAS Ground Services, SAS Technical Services and Spirit Air Cargo Handling divisions.

Jansson says: “To ensure our development and cover our future investment needs we must, from now until 2011, increase our pre-tax profit to approximately SKr4 billion per year while simultaneously lowering our costs by SKr2.8 billion.”

Under its new strategy SAS Group is focussing on its core Northern European airline operations, where its market position is strongest.

It says: “SAS shall offer the market's best value products where customers will have great freedom to personally design the content. Our customer relations, punctuality and regularity shall be among the best in the industry. The range of non-stop routes and departures will be increased. New concepts for leisure travel will be developed.”

But Jansson says that labour relations are pivotal to the success of this strategy: “A new co-operation model with the unions will be established. We have to abandon the strike culture that has long existed at SAS.

“We have to stand together behind a new customer-oriented business culture based on the needs, requirements and expectations of customers. This will ensure our future as a strong and independent airline and also give us an opportunity to involve employees in the value that is created through profit sharing and part ownership.”

A further driver behind the plan, says Jansson, is the speed of change within the industry. SAS will ready all of its markets for growth over the next four years to with the aim of increasing its passenger numbers by 20%.

The strategy plan will be be implemented by 2009.

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