Tuesday 26 September 2017

SAS to set up Irish division as it competes in leisure traveller market

An SAS plane takes off at dusk from Tegel airport in Berlin, October 12, 2010 (Photo credit should read ODD ANDERSEN/AFP/Getty Images)
An SAS plane takes off at dusk from Tegel airport in Berlin, October 12, 2010 (Photo credit should read ODD ANDERSEN/AFP/Getty Images)

Independent.ie Businessdesk

SAS has announced that it will register planes in Ireland as the airline plans to set up hubs in Spain and London to offer services to more leisure travellers at a lower cost.

The move by the Scandinavian Airlines parent has been made in an effort to compete with discount carriers including Norwegian Air Shuttle ASA who have been offering a mix of European and trans-Atlantic routes.

An air-operator certificate is being sought in Ireland - with sites in London and Spain - that will provide a small number of departures, “a handful of aircraft", at first.

According to the a statement from the Stockholm-based company, the additional service is expected to begin next winter.

However, while trying to compete in the leisure travel markets, SAS said it will continue to focus on frequent travelers and the bulk of its operations will remain in Scandinavia.

The airline's cost base is estimated to be 20pc to 25pc higher than at rivals.

It is understood that the Irish unit will hire locally - and cost advantage is more likely to come from lower social security expenses and taxes rather than from reduced wages, spokesman Fredrik Henriksson said.

Last month, CityJet confirmed its acquisition of Danish carrier Cimber, a subsidiary of Scandinavian carrier SAS, and placed an order for up to $467m (€434m) worth of Bombardier aircraft.

Following an announcement in December 2016 that job cuts are planned, SAS reiterated that it will scale back operations elsewhere.

Additional reporting from Bloomberg

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