SAS Scandinavian Airlines signed (25-Jun-2013) a MoU with Airbus for eight A350XWBs and four A330-300s worth USD3.3 billion at list prices, as part of its strategy to modernise its fleet with more fuel-efficient aircraft. The aircraft will join SAS' existing fleet of 30 Airbus aircraft. SAS Group president and CEO Rickard Gustafson said: "The great technological improvements of this extensive fleet renewal plan give SAS a long haul fleet that will be top of class in the industry. It will truly increase our competitiveness and strengthen our customer offering – both with regard to comfort, service and efficiency". The airline also selected Rolls-Royce Trent XWB and Trent 700 engines along with long term TotalCare services for the aircraft, in an order worth USD1 billion at list prices. In addition to the ordered aircraft, SAS will also upgrade the passenger cabins on seven A330 and A340 aircraft including installing new seats throughout the cabin with fully flat business class seating. The entire cabin will also feature new high definition full video on demand in-flight entertainment system. SAS expects to complete the cabin upgrade in 2015. [more - original PR - SAS Group] [more - original PR - Rolls-Royce]
SAS Scandinavian Airlines signs MoU for A350 and A330 aircraft
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Since 2010, additional route numbers from Western Europe to the US have been greatest from the largest markets – the UK and the US – and from the smaller countries, particularly Ireland, Iceland and Norway. Countries in between, including France, Italy, Spain and the Netherlands, have hardly added any new US routes at all.
SAS eyes lower labour cost bases outside Scandinavia as the airline's margin starts to fall again
A harsh truth for SAS is that improvements to its network and product, and its focus on Scandinavia's frequent travellers, have not isolated it from unit revenue weakness. Moreover, in spite of very creditable progress with unit cost reduction, it still has a high cost base. In FY2016 its operating margin started to turn down again. In addition to further targeted cost savings SAS is now considering further, more radical, changes to its production model.
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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.