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SAS to slash more jobs and 'demand' pay cuts among crews

SAS Group is slashing up to 1,500 more positions through yet another cost-cutting programme, aimed at generating SKr2 billion ($273 million) in savings largely through slashing employee expenditure.

These savings are additional to those being made through the 'Core SAS' restructuring, which themselves have been extended to total SKr4.5 billion.

SAS Group says the latest initiative will "demand" a 10-20% cut in payroll and pension costs among pilots and cabin crew through the establishment of "fully competitive" collective agreements.

The company, which disclosed first-half losses today, says the scheme will "generate sustainable competitiveness" but involve 1,000-1,500 job losses, with the workforce being cut across several sectors.

SAS Group had previously warned that it needed to close a "cost gap" against its competitors, and that its Core SAS programme would help rectify the situation.

But chief executive Mats Jansson says that while Core SAS is producing a "significant earnings effect" - and will close the cost gap to SKr2 billion - additional measures are needed to deal with the "unique, fierce competition" in the market.

"This is a matter of competing on equal conditions and, ultimately, about the survival of SAS," he says.

SAS Group started negotiating with its 39 unions to reduce payroll costs but says these talks were only partly successful.

The company states that a "significant proportion" of the SKr2 billion target centres on salaries, pensions and allowances.

SAS Group is to begin negotiations "immediately" to achieve a 10-20% reduction in payroll and pension costs among cockpit and cabin personnel.

It adds that the company will introduce a "principle of optimising production" to make greater use of the most efficient production resources, "regardless of production location or nationality".

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