LONDON – The negative troubles that SAS are having at present gives the likes of Flyr, Norse Atlantic Airways & Norwegian to capitalize on their woes. Welcome to The Editor’s Corner.
The Editor’s Corner is an op-ed series from AviationSource Editor-in-Chief James Field, who is going to give his thoughts (Maybe controversial) on all things going on in the aviation industry.
In case you have missed the last 14, feel free to browse through them before you continue to read this piece:
- The Editor’s Corner #1: The Industry Isn’t Ready for Summer 2022 Demand
- The Editor’s Corner #2: JetBlue’s Offer for Spirit Airlines Will Change The American Airline Dynamic
- The Editor’s Corner #3: Boris Johnson’s Damage To The Aviation Sector is Another Reason for Resignation
- The Editor’s Corner #4: PLAY Will Transform The Market with a Post-Pandemic Edge
- The Editor’s Corner #5: Detriment of the Boeing 737 MAX & 787 Is Causing a 777X-Based Aftershock
- The Editor’s Corner #6: Qantas’ Plans For The Future Will Turn Around Negative Times
- The Editor’s Corner #7: The P2F Market Is Hotting Up…
- The Editor’s Corner #8: O’Leary Is Gunning For Another Cheap Boeing Order
- The Editor’s Corner #9: Ukraine Crisis: Turkish Airlines’ A350 Snap-Up from Aeroflot May Have Something To Do With A Red Carpet…
- The Editor’s Corner #10 – Ukraine Crisis: Lessors Will Not Win The Russia Battle
- The Editor’s Corner #11 – Spirit Airlines Are Slowly Changing Their Mind…
- The Editor’s Corner #12 – The Indian Air Cargo Market Is Hotting Up
- The Editor’s Corner #13 – Video Footage From RedAir Flight 203 Highlights Dangers of Carrying Luggage During an Evacuation
- The Editor’s Corner #14 – The Spirit-Frontier-JetBlue Battle for Merger Will Be Remembered As A Mess
James will be starting things off with his next topic being: Flyr, Norse & Norwegian Have Opportunity to Capitalise on SAS’ Woes
Flyr, Norse & Norwegian Have Opportunity to Capitalise on SAS’ Woes
Scandinavian Airlines is in massive trouble at the moment. From its pilots going on strike to the airline entering Chapter 11 bankruptcy in the U.S, things are looking bleak.
The airline has to turn this around as quickly as possible, otherwise, this may open the floodgates for the likes of Flyr, Norse Atlantic & Norwegian to make a move on their market share.
This has implications both on the short-haul perspective and also on the long-haul side as well. Whatever happens, could change the Scandinavian airline market.
Pilots at SAS yesterday have been called on strike by the unions due to no agreements being made, which is putting further strain on the airline’s liquidity.
CEO Anko van der Werff has called this strike “devastating” & “reckless”:
“We deeply regret that our customers are affected by this strike, leading to delays and canceled flights.”
“We know all our passengers have been longing for this summer holiday and have booked travels for themselves and their loved ones. SAS employees are working hard to help our customers that have been affected by this unfortunate situation.”
“A strike at this point is devastating for SAS and puts the company’s future together with the jobs of thousands of colleagues at stake.”
“The decision to go on strike now demonstrates reckless behavior from the pilots’ unions and a shockingly low understanding of the critical situation that SAS is in”.
It is understood that the strikes will lead to the cancellation of approximately 50% of all scheduled SAS flights, impacting up to 30,000 passengers per day.
Chapter 11 Proceedings…
Then today, as part of strengthening the airline’s ability to deliver the SAS Forward restructuring plan, the airline has entered Chapter 11 Bankruptcy proceedings in the United States.
van der Werff also added to this:
“Over the last several months, we’ve been working hard to improve our cost structure and improve our financial position. We are making progress, but a lot of work remains and the ongoing strike has made an already challenging situation even tougher.”
“The chapter 11 process gives us legal tools to accelerate our transformation while being able to continue to operate the business as usual.”
“We will continue to build back the network connectivity, products, and service our customers expect, and we will continue to do so throughout this process and beyond.”
“I am convinced that this process will enable us to become an even better airline for our customers and a stronger business partner in the years to come.”
“Becoming a more competitive airline will require the full team’s effort and burden-sharing from all stakeholders. We urge SAS Scandinavia pilots’ unions to end their strike and engage constructively as part of this process.”
The company will continue to function during this process, but as van der Werff mentions, the strike action is going to place more pressure on the airline to deliver on its promises.
A Big Player Suffering Heavy Losses…
The last week or so for SAS has not been a good one, as they are being deemed as a player suffering heavy losses.
From elements such as the COVID-19 pandemic all of the ways to the Ukraine Crisis, the airline has been struggling significantly both internationally and domestically.
This of course gets worse with the strike action effectively wiping out half of its networked scheduled flights. As it stands, the airline is going to have to deal with what they currently have on offer.
It is in the interest of van der Werff to get this under control as quickly as possible and open up further stages of mediation with pilots to get this solved as this is going to be a big part of the airline’s downfall if no agreement comes together.
Jobs may have to be cut, which will ultimately revert the airline back to the level of progress it may have experienced a few years ago.
Opportunities for Capitalisation by Competitors…
It is probably a wise assumption to make that the likes of Flyr, Norse Atlantic, and Norwegian Air are keeping an eye out on this.
Any cuts made by SAS could give the carriers ample opportunities to snatch some market share away from the carrier, especially on a low-cost basis as well.
Flyr and Norwegian would be able to take the short-haul market share relatively quickly and could use that as a basis for expansion, whilst Norse Atlantic could take some of SAS’ international slots.
Either way, it is going to be one to watch out for, especially if the situation continues to worsen for SAS.
Overall: Change in the Landscape On The Way…
Whatever the outcome, we are going to see an overall change in the Scandinavian airline landscape, regardless of whether it is for the better or worse.
The low-cost carriers could thrive the most in this, as they can open up new routes, keep the cost base low, and thrive that way.
However, SAS has been a staple of Scandinavian aviation, and it is my personal hope that the airline doesn’t go into further bankruptcy.
Either way, let’s see what happens and see what the landscape is going to offer in the coming weeks and months ahead.