Sweden’s LFV Group reportedly plans to sell six of its 16 airports following government directives and the group’s plans to cut costs (Swedish Wire, 20-Nov-2009). Jönköping, Skellefteå, Örnsköldsvik, Sundsvall, Karlstad and Ängelholm airports will be placed up for sale. LFV stated it would attempt to sell the airports to their respective regions and countries before considering private investors. The company also plans to undergo reorganisation, splitting the group into two separate entities, one to control air traffic and one to manage its remaining airports.
LFV Group reportedly planning to sell six of its 16 airports
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SAS: 2Q losses widen after six quarters of improving results. LCCs & SAS growth depress unit revenue
After improving its underlying profit in FY2015 and narrowing its losses in the seasonally weak 1Q2016, SAS suffered a widening of losses in 2Q2016. This was the first year-on-year deterioration in its underlying result for six quarters. It benefited from lower fuel prices and from its own cost savings programme, but experienced plummeting unit revenue.
This reflects the ongoing growth of LCC competition in short haul markets, but is also the result of its own capacity increase. SAS' growth is led by rapid expansion on long haul, where Norwegian is also providing LCC competition. SAS is investing in its network and product and growing its revenue from higher-yielding loyalty scheme members, but these measures do not appear to be giving sufficient support to unit revenue.
These trends are unlikely to dissipate any time soon, and there is now the real prospect that its FY2015 result represented a cyclical peak for SAS. The company recognises the need for further change in order to improve its competitiveness. Strategies to seek labour cost reform can be expected, in spite of a strike call by Swedish pilots.