LONDON – SAS is now launching a controversial business plan with new subsidiaries in earnest. 27 unprofitable routes are being transferred to the new ones, Swedish newspaper Dagens Nyheter reports.

The decision increases tensions between the management and the pilots ahead of this spring’s contract negotiations. The SAS Group’s decision to establish the new subsidiaries, SAS Link and SAS Connect, has created major internal protests.

Despite the strong resistance, SAS Scandinavia decided that a total of 27 existing routes will be transferred to the 2 subsidiaries; 13 routes departing from Copenhagen Kastrup and 14 routes from Stockholm Arlanda, which haven’t been profitable last year.

SAS has long argued that new subsidiaries are a necessity for the Group to be able to compete with low-cost airlines, as competition becomes more fierce, while at the same time business travelers become fewer.

The union sees it rather as a way for management to round off agreements and get rid of existing staff in favor of cheaper labor with worse conditions in the new companies.

As the plans became more concrete last year, tensions between the unions and the employers have increased. Now that the newly appointed CEO Anko van der Werff speeds up the subsidiaries, the situation is seriously worse than it has been for a long time.

SAS’s press manager Freja Annamatz says that SAS is adapting to increased competition and new travel patterns. “This work includes optimization of routes, which means evaluation and reallocation of routes between the various operating platforms.”

“No jobs will be lost, but SAS is currently recruiting for all three platforms, SAS Scandinavia, SAS Link, and SAS Connect, to meet the growing demand for travel,” she writes.