SAS Group launches restructuring plan to improve profitability and secure long-term finances
SAS Group announced (12-Nov-2012) the launch of a new restructuring plan, '4 Excellence Next Generation' (4XNG) to improve the Group's profitability and secure its long-term financial preparedness. 4XNG will target SEK3 billion (EUR349.5 million) of profitability improvements p/a from cost reductions and organisational restructuring. Also, the airline plans to increase liquidity by SEK3 billion (EUR349.5 million) from asset sales. SAS signed a new SEK3.5 billion (EUR407.7 million) revolving credit facility from seven banks and core shareholders (Denmark, Norway and Sweden) to secure the airline's financial preparedness. However this is conditional on signed union agreements and parliamentary approvals. 4XNG follows on from the airline's 4 Excellence plan which was announced in Sep-2011 to delivery SEK5 billion (EUR582.5 million) in EBT effect. Despite achieving success through this plan, SAS said it foresees the need for further improvements to secure the Group's long-term competitiveness. 4XNG plan includes:
- New union agreements for employees;
- Reduction of compensation to market levels;
- New pension terms;
- Centralisation of administration functions;
- Outsourcing of call centres and ground handling;
- Disposal of Widerøe, airport related real estate interest, ground handling, aircraft engines.
SAS expects to realise SEK1.5 billion (EUR174.7 million) in improved EBT in FY2013 with most of the remaining benefits to be realised in FY2014. The 4XNG plan is self-financing and will not require any new capital. The plan is aimed to make SAS less dependent on external lenders in the future. The SAS Group board plans to meet on 18-Nov-2012 to decide if the conditions for the implementation of the plan exist. [more - original PR - SAS] [more - original PR - SAS II]
SAS: "This truly is our 'final call' if there is to be a SAS in the future. We have been given this final chance to make a fresh start and to carry on these fundamental changes. I know that we are asking a lot of our employees, but there is no other way. I hope that our loyal and dedicated employees are willing to fight for the survival of SAS and for our jobs. If we do this, we will be able to invest in new aircraft in the long term and to further develop our operations. This will ensure that SAS will continue to play an important role for millions of people in Scandinavia in the future," Rickard Gustafson, president and CEO. Source: Company statement, 12-Nov-2012.