The financial problems for SAS risk continuing.
Every time the company was about to get its nose above water there was a strike. Or pandemic. Or messing with security controls. Or volcanic eruptions.
There was always some external factor that prevented SAS from making money, analyzes financial reporter Jens B Nordström.
Croatian music teacher Frano Selak has been marketed as the world’s most unlucky person. During his lifetime, he claimed to have been hit by buses, crashed into cars, fallen out of airplanes and followed derailed trains into the depths of rivers. Selak survived everything, but often showed off broken arms and burnt hair in the media.
SAS has sometimes felt like the airlines’ answer to Frano Selak. Every time the company was about to get its nose above water there was a strike. Or pandemic. Or messing with security controls. Or volcanic eruptions. There was always some external factor that prevented SAS from making money. The shareholders were forced time and time again to pocket more money.
SAS recurring headaches
The logical end point will now be Air France-KLM taking over. Twenty percent in the first step, and an option on the entire row in two years. This probably means big changes for SAS. A recurring headache has been that SAS’s state owner refused to concentrate operations on a single main airport. Instead, it was a reasoning solution where resources were invested in parallel at Arlanda, Kastrup and Gardermoen.
That time is now over. Presumably the new owners just want to see a Scandinavian hub, and it will be Danish Kastrup. There is the best population base there, and many of SAS’s long-haul routes are already located there. Arlanda and Gardermoen will be reduced to feeder airports, sending travelers to Copenhagen, Schiphol or Charles de Gaulle for further transport. SAS’s future is here and the message is: “Forget intercontinental direct flights from Stockholm.”
Is this enough?
Is this enough to get SAS’s nose above water? A cloud of worry is, of course, that Air France-KLM themselves have struggled with financial problems. The company has had negative equity for long periods, which means that the liabilities exceed the value of the assets. Air France-KLM, just like SAS, has had to ask the owners for more money. Since both the French and Dutch states are the main owners, this has led to political tensions. This is hardly a dream for SAS. The financial problems risk persisting. And the political problems risk just changing levels, from Scandinavian headaches to European ones.
But something had to happen to the ill-fated SAS. Perhaps this is the parallel to the Croatian music teacher coming back. At the age of 73, the unlucky Frano Selak suddenly won ten million kroner in the lottery. Overnight, the headlines changed, and music teachers were suddenly considered incredibly lucky. Selak also remarried with the words that his four previous marriages had probably also been real accidents.
The future will tell whether Air France-KLM is the lottery ticket SAS needs. But at some point the bad luck has to end for SAS too, right?