The leading airline in the Scandinavian countries.
Text: Mariano Anthony Davies
Air travel between the Scandinavian countries and globally from them took a giant step when Scandinavian Airlines System (SAS) was established in 1946 through a consortium agreement between three Scandinavian airlines at that time.
Det Danske Luftfartselskab in Denmark;
Den Norske Luftfartselskap in Norway;
Svensk Interkontinental Lufttrafik in Sweden.
This new Pan-Scandinavian airline offered citizens of these three countries its first intercontinental commercial flight, between Stockholm and New York, that very same year and the company that we know as “SAS” was formed by 1951.
The consortium today consists of four separate carriers, one based in each of the three founding countries and one for international flights - all branded using the SAS name. The SAS Group has grown into a globally known brand that operates scheduled passenger, freight and mail flights between more than 100 cities around the world.
Three decades of growth In 1949, SAS expanded its intercontinental service to Bangkok via Europe and Central Asia. Two years later, the service was extended from Bangkok to Tokyo and by 1954, SAS even managed to pioneer a polar route to Los Angeles and then three years later to Tokyo.
SAS was the first airline to fly the Caravelle, a revolutionary French-built jet with its engines mounted on the rear of the fuselage and also ordered special cold-weather versions of the DC-8 and DC-9 from Douglas.
About this time, SAS was confronted with a basic problem in airline economics. Most of its destinations were European, which meant that most of its flights were of short duration. This, in turn, translated into frequent take-offs and landings and increased wear and tear. Moreover, the cost of preparing an aircraft for another flight was incurred more frequently. There was, therefore, an economic incentive to operate “long haul” flights to more distant destinations.
During this period, SAS also suffered from “overcapacity” - too many aeroplanes. A solution to these problems arose when SAS was approached by officials from Thailand who wished to establish their own international airline services. SAS was chosen over other airline companies because Thailand regarded the Scandinavian countries as politically neutral.
SAS began a limited diversification in 1960 when it purchased the Royal Hotel in Copenhagen. Later SAS established a catering subsidiary and a charter airline called Scanair. Furthermore, in 1965, SAS created the first Europe-wide computerized reservation service (or “CRS”), providing the company with a significant advantage over its larger European competitors and combined “internal” and “external” expansion programs made SAS a primary international air carrier by the end of the seventies.
"The 2020 global lockdown has given SAS new challenges after having to park most of its fleet for over two months."
Jan Carlzon era After nearly two decades of profitability, SAS suffered its first loss in 1980. It was threatened by increased competition from the recently deregulated American airline companies and low-cost operators.
The SAS Board placed the Swede Jan Carlzon in charge of a strategic turnaround with a new focus on SAS as the Business Airline. Copenhagen and Bangkok became the two hubs between Europe and Asia and punctuality became an integral part of its marketing and the SAS staff became known as “Carlzon’s Soldiers”.
Post Corona challenges
The 2020 global lockdown has given SAS new challenges after having to park most of its fleet for over two months.
As a consequence of the broad mobility bans imposed due to the outbreak of COVID-19 pandemic, SAS has announced a reduction of its workforce by up to 5,000 full-time positions; 1,700 of those in Denmark (approximately 1,900 full-time jobs will be cut in Sweden and 1,300 in Norway). The airport in Copenhagen will be most affected by the restructuring.
SAS sent 4,000 of its 4,300 employees in Denmark home on paid standby during the temporary termination of airline traffic in Denmark in March and April 2020. In a press release on 28 April 2020, the CEO announced the restructuring programme of the hard-pressed Scandinavian airline company. The management assured that the redundancy plan will be implemented following the labour law practices in each affected country.
Consequently, like many other airlines, SAS is forced to adapt its business model to survive the new challenges created by the glocal lockdown.