Tanzanian Association Oslo

SAS announces major

deficit and new cuts

Scandinavian airline SAS on Tuesday reported a deficit of NOK 5.3 billion for 2008, and at the same time announced that 3000 jobs will be cut, in addition to those who will leave in connection with the sale of Spanair last week.

SAS' goal for the next two years is to save NOK 2.2 billion. Union representative Asbjoern Wikestad says that although it is still unclear where the cuts wll come, it is certain that also employees in the Norwegian division of the airline will be affected.

In a comment by the SAS management it says hat 2008 will probably go down in history as one of the most challenging and turbulent years that the entire aviation industry has ever experienced.

- During the year, we saw a period of record-high oil prices, a financial crisis that heavily intensified during the final quarter and which led to an economic recession in many markets that has significantly reduced demand for goods and services. To address the global recession and our internal challenges, SAS management has launched a renewed strategic approach, "Core SAS," which contains five primary areas: focus on our Nordic home market, focus on business travelers, new efficient organization, improved cost base and a strengthened capital structure, the statement says.

To implement its strategy, SAS announces that a rights issue amounting to approximately SEK 6 billion will be conducted. It says the rights issue is supported by the three government owners and the largest private shareholder, the Wallenberg Foundations (FAM).

The Norwegian government will as its contribution to the issue grant NOK 800 million, according to Minister of Trade and Industry, Sylvia Brustad.

- The aim is to maintain the basis for secure jobs and a good network for travelers in Norway and Scandinavia, Brustad says.

Source: NRK/Press release