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SAS cuts more jobs

Aug 13, 2009

STOCKHOLM — Scandinavian airline group SAS AB on Wednesday said it will cut between 1,000 and 1,500 more jobs to reduce costs after posting another large loss for the second quarter amid falling demand for its services.

The Stockholm-based company, whose net loss more than doubled to 1.05 billion kronor ($144 million) from 422 million kronor a year earlier, said the job cuts will be part of a new program to lower costs by 2 billion Swedish kronor ($274 million).

To implement the savings it will also start negotiations with trade unions to demand a 10-20 percent reduction of salaries and pensions for flight deck and cabin staff.

Shares in SAS rose 2.7 percent to 3.8 kronor ($0.5) in early Stockholm trading.

"SAS must compete on the same basis as its competitors and completely close the cost gap which ultimately is a matter of survival," SAS Chief Executive Mats Jansson said in a statement, adding that the effects of the global recession are being felt "extensively throughout the aviation industry."

SAS said the result for the second quarter was weighed down by falling demand and restructuring costs. Sales for the period fell to 12.2 billion kronor from 14.4 billion kronor in the second quarter 2008.

The new savings program adds to a massive overhaul of the company announced in February, which included a 40 percent staff cut, a reduction of the aircraft fleet, divestments of stakes in some subsidiaries and a new share issue of 6 billion kronor ($720 million).

At the end of the second quarter, SAS had 18,000 employees.

SAS cuts more jobs
Source: AP

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