2008 April

Mobile phones will be allowed in aircrafts within the EU.

Isn’t it nice with some quiet moments?

Scandinavian Airlines is experiencing yet another crisis. The yield is sinking despite the cabin factor is increasing. With other words: more passengers, but less income.

The flag carriers are suffering from hard competition from Europe’s low fares airlines. And SAS - with it’s complicated structure with operating in three different countries with separate legal systems, trade unions etc - have difficulties in keeping up. One cut back program after the other and the airline is still barely profitable. The airline has so far managed to keep up through selling off it’s assetts: SAS Radisson Hotels, SAS Media, it’s 20 % share of BMI and Spanair will probably be sold later this year. But what will happend when there’s nothing more to sell?

From an industrial perspective selling Spanair and BMI is probably reasonable, as it doesn’t feed passengers into any of the major hubs. SAS’ strategy of purchasing Estonian, Blue1 and creating Air Baltic is a success though. Each of those airlines are profitable and it helps feeding passengers into the hubs in Stockholm and Copenhagen. What’s remarkable though is that these airlines are so little integrated in SAS - you can’t even purchase tickets through SAS to all the destinations their subsidiaries flies to!

SAS needs more passengers. One way of further strengthening the hub in Copenhagen would be to have more passengers flying in. What not swapping the shares of BMI for the ownership of Polish Airline LOT? Lufthansa is interested in strengthening it’s position in Britain and currently owns LOT. This could be a deal both parties could benefit from.

 A further co-operation with Lufthansa is by all means necessary, if SAS wants to be able to fly people all over the world. SAS only flies to a little more hand two handful of destinations outside Europe. With a stronger partnership with the German airline, SAS could at least transport passengers to the connection hubs in Germany. Today, passengers have to fly competing airlines and alliances to travel to South America, Africa and other areas.

The alternative to a strong Scandinavian Airline is probably to be purchased by Lufthansa.

Heathrow’s new Terminal Five has had major problems since it’s opening a few weeks ago. Around 50 flights has been cancelled and around 19 000 luggages has been lost. The problems are so severe that the airport is now sending luggage to Milan to get sorted.

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