SAS Unconcerned With Norwegian Air, Ryanair Growth

04.09.2023 - 14:37 / skift.com / Edward Russell / Carsten Spohr / Airlines

The CEO of bankrupt Scandinavian airline SAS, Anko Van der Werff, does not see the carrier’s position in the northern European market as “diminished” by recent market share grabs from the likes of Norwegian Air and Ryanair.

The discount competitors are growing in SAS’ home markets: Norwegian Air in its namesake country, including with a $106 million deal to buy regional airline Wideroe; and Ryanair in Denmark with plans for a new base in Copenhagen, SAS’ largest hub by flight numbers.

Van der Werff’s comments came Friday after the Stockholm-based Star Alliance carrier unveiled its highest passenger numbers and first quarterly profit since 2019 in its fiscal third quarter — May, June, and July. SAS posted a $143 million (1.6 billion Swedish kroner) operating profit on $1.2 billion in revenue. Passenger numbers came in just shy of 7 million. All but the profit number were below 2019 levels.

SAS is restructuring under U.S. Chapter 11 bankruptcy with an aim to significantly cut costs and debt, and raise new equity. It had hoped to complete the process by this summer but now expects to exit bankruptcy by the end of the year.

The airline’s results come amid a surge in travel demand across Europe. Executives at Air France-KLM, International Airlines Group — owner of British Airways and Iberia, among others — Lufthansa Group, and Ryanair have all said similar things about demand this summer. Planes are full, and travelers are paying more than they did four years ago.

“Demand remains extraordinarily strong,” Lufthansa Group CEO Carsten Spohr said in July. “This is true for as far as we have visibility.”

The same is true for SAS’ main Nordic rival, Norwegian Air. CEO Geir Karlsen described the market as seeing “record” travel demand in the April-to-June results. Norwegian Air reported a $61 million (651 million Norwegian kroner) operating profit on $644 million in revenue. It carried 5.6 million passengers in the period.

But Norwegian is in a strong position relative to SAS. It completed its own restructuring during the pandemic in 2021, and has flown from strength-to-strength in the two years since. That includes rebuilding its fleet, relaunching its loyalty program — Norwegian Reward — with new partnerships like one with Nordic hotels group Strawberry, and the deal to buy Wideroe.

Those moves, and more, have Norwegian Air actively positioning itself to be the preferred airline of Norway’s corporate travelers — a market dominated by SAS.

“There’s no doubt that we are … taking market share, and the number of passengers on the corporate side then deciding to travel with Norwegian,” Karlsen said.

Norwegian Air’s corporate travel revenues have already exceeded 2019 levels even as volumes — as pretty much