INCREASINGLY unsustainable losses have forced independent Swedish airline Transwede to initiate a radical restructuring programme centred on the establishment of three separate business units. From this month, scheduled, charter and maintenance activities will be operated as independent profit centres.

The move, which involved 160 redundancies at the end of May, was widely expected, following the arrival of ex-Scandinavian Airlines System chief Jan Carlzon as chairman. The company's financial position has deteriorated, with sizeable losses in the past two years - a situation which has continued in the first five months of 1995, when the airline lost SKr100 million ($13.8 million).

Transwede Airways will continue to operate its profitable scheduled domestic services and its Stockholm/London route with six Fokker 100s, while the charter business, to be operated under the Transwede Leisure banner, will be consolidated through Carlzon's financial interests in Nordpool, a grouping of leading Scandinavian tour operators. Transwede Engineering is the likely name for the third arm of the restructured group.

The final details of the new companies, which will each have independent legal status, are now being hammered out. Nordic Capital, a consortium of institutions and investment banks, will take over 50% of the capital.

The new owners are looking towards break-even by the end of 1995, but this will be contingent on a substantial improvement in its charter business, which is suffering badly from overcapacity in the Swedish market - typified by Air Ops, Apollo and Nordic East, operating Airbus aircraft and Lockheed TriStars - and low prices.

Transwede has reduced its northern-summer charter fleet to five McDonnell Douglas MD-83s by leasing out three MD-83s and two MD-87s, and will be making further staff cuts.

Source: Flight International