FlyNonstop announced (29-Oct-2013) it filed for bankruptcy and ceased commercial operations as of 06:00 CET on 29-Oct-2013. The carrier's official website stated: "We have received help from SAS that will provide our customers with ticket reference in FlyNonstop, the opportunity to purchase new tickets at a special price with the company, provided that there are available seats on the desired travel date. SAS has many frequencies, large network and flies to all our destinations so the possibility that the majority will make a good alternative to the original itinerary will be present." The carrier added: "We once again lament the burden placed on you passengers, but FlyNonstop could unfortunately no longer meet its obligations and must therefore we must lay down our business. This is a sad day for our customers and for us FlyNonstop." [more - original PR - Norwegian]
FlyNonstop files for bankruptcy, ceases operations
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SAS' new foreign bases in London & Spain show rare innovative thinking for a legacy airline
On 01-Feb-2017 SAS announced that it is to establish a new AOC in Ireland, with operational bases in London and Spain. It has yet to specify the airports that will become its first bases outside its three Scandinavian home countries. SAS is following a course established by Norwegian, apparently forgetting its previous objections to its LCC rival's approach.
Indeed, it seems that SAS' move is a pragmatic response to intense competition from LCCs, particularly from Norwegian. According to SAS' 2016 Annual Report, 65% of its ASKs compete with LCCs. Scandinavia's high labour costs are a significant handicap in competing with airlines that have bases outside the region.
Spain and UK are its two biggest markets outside Scandinavia, with London Heathrow its biggest non home airport. After years of cost reduction programmes – also years of initiatives aimed at enhancing the appeal of SAS' product and brand to its core target market of Scandinavia's frequent flyers – a bolder step is needed. SAS will be a very rare example of a European legacy airline with bases outside its home market, more than 20 years after market liberalisation presented the opportunity.
SAS eyes lower labour cost bases outside Scandinavia as the airline's margin starts to fall again
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In particular, it is assessing whether or not to establish operations outside Scandinavia for some of its European traffic. The European airline market includes a fast-growing and price-sensitive leisure segment, where SAS tries to compete against much lower cost operators that are not weighed down by Scandinavia's very high labour costs.
Even Scandinavia's most significant LCC, Norwegian, has established bases in the UK and Spain, and many other LCC competitors have bases across the continent. Indeed, it would seem that SAS, once an opponent of Norwegian's plans to use Ireland as a trans-Atlantic base in search of lower labour costs, has borrowed a page from its rival's book on how to re-write airline strategy.