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SAS expects poor summer season

Following the recent pilot strike, and with negotiations with cabin crew tabled, it will be hard for SAS to reclaim passengers’ confidence.

SAS is refusing to lower ticket prices as a summer season approaches that is expected to be poor, E24 news reports. But the airline’s chief executive acknowledges it may have to do this anyway.

SAS has already announced quarterly losses of SEK 650 million (€60.7 million), due to the recent pilot strike, high fuel costs and the weak Swedish currency against the US dollar.

But it has no plans to lower fares to attract customers, despite the fact that traffic forecasts to southern Europe this summer are negative, E24 writes.

SAS may in any case be forced to cut prices because the poor forecasts have already led to other airlines starting what CEO Rickard Gustafson called in an interview with E24 “aggressive campaigns”. “We cannot close our eyes to this, and we must adapt” he admits.

SAS CFO Torbjørn Wist, meanwhile, said he was fairly satisfied with the overall of booking levels, even though the demand for the Mediterranean was lower this year.

“One of the reasons for lower traffic to southern Europe this year may be that the Swedes simply think it is too expensive,” Wist commented.

Extremely frustrating
Professor of marketing Tor W Andreassen told E24 that, after large cost cuts, SAS saw a return to a profit last year. But following the recent pilot strike, the surplus was shaved away. And now the company is preparing for negotiations with cabin crew.

“It must be extremely frustrating for Rickard Gustafson to be CEO of SAS,” he said.

At the same time, he pointed out, if cabin crew go to strike it could mean that a large number of passengers who are flying away on holiday may have their holidays ruined.

But it is business travellers’ loyalty that SAS should be most concerned about, he added. “This is an important group for SAS. They are very loyal to SAS, and even a marginal decline in their loyalty will significantly affect its revenues.”

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