Scandinavian airline SAS launches drastic cost-cutting program
Ailing Scandinavian airline SAS on Tuesday announced a major cost cutting plan, as the carrier faced further heavy losses.
Under the new plan the company will reduce costs by 7.5 billion Swedish kronor ($800 million, 710 million euros) annually.
"Absent fundamental change," the current situation in the airline sector, which is plagued by the economic fallout of the
pandemic, "will quickly exhaust SAS' cash resources," the carrier said in a statement.
The "full transformation" of the business will affect "its network, fleet, labour agreements and other cost structures", the company.
Called "SAS Forward", it will notably result in a "redesigned fleet" which included a "refocusing" on long-haul flights, the company said.
SAS, which already cut 40 percent of its workforce, 5,000 staff, in 2020, did not mention new job cuts.
The group did not specify when it expected to achieve the 7.5 billion annual reduction in its costs.
Last year, SAS widened its losses after an already disastrous 2020, with a net loss of just over 2.4 billion kroner, with rebounded turnover of about 5.5 billion.
In the early hours of trading on the Stockholm stock exchange, SAS shares, which have taken a hit in recent days amid concerns about its financial situation, gained over five percent to 1.13 kroner.
At its current price, however, the company is only worth about 800 million euros.
SAS has benefited from several aid and recapitalisation plans since the start of the pandemic, mainly funded by Sweden and Denmark, which each own 21.8 percent of the company.
READ ALSO: SAS shares plummet after analysts warn it risks going bankrupt
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Under the new plan the company will reduce costs by 7.5 billion Swedish kronor ($800 million, 710 million euros) annually.
"Absent fundamental change," the current situation in the airline sector, which is plagued by the economic fallout of the
pandemic, "will quickly exhaust SAS' cash resources," the carrier said in a statement.
The "full transformation" of the business will affect "its network, fleet, labour agreements and other cost structures", the company.
Called "SAS Forward", it will notably result in a "redesigned fleet" which included a "refocusing" on long-haul flights, the company said.
SAS, which already cut 40 percent of its workforce, 5,000 staff, in 2020, did not mention new job cuts.
The group did not specify when it expected to achieve the 7.5 billion annual reduction in its costs.
Last year, SAS widened its losses after an already disastrous 2020, with a net loss of just over 2.4 billion kroner, with rebounded turnover of about 5.5 billion.
In the early hours of trading on the Stockholm stock exchange, SAS shares, which have taken a hit in recent days amid concerns about its financial situation, gained over five percent to 1.13 kroner.
At its current price, however, the company is only worth about 800 million euros.
SAS has benefited from several aid and recapitalisation plans since the start of the pandemic, mainly funded by Sweden and Denmark, which each own 21.8 percent of the company.
READ ALSO: SAS shares plummet after analysts warn it risks going bankrupt
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