Returning to the skies

21 May 2021

The aviation industry took a hard hit when airlines saw travellers disappearing in a matter of weeks due to the pandemic. While many airlines struggled with cash flow and went under, SCC patron SAS was fast to adapt to the new environment and took the opportunity to introduce flexible solutions to its travellers and to update its fleet to one of the most sustainable and youngest fleets in the world. “There is no reason to believe we wouldn’t continue from where we were before the pandemic and become even stronger,” says Niko Ek, Head of Sales Europe at SAS.

 

Formed in 1946 from Det Danske Luftfartselskab, Det Norske Luftfartselskap and Svensk Interkontinetal Lufttrafik, SCC patron SAS has been connecting Scandinavia with the rest of the world for 75 years. With its routes between Scandinavia and the UK, the airline has been enabling trade, meetings, and interaction for decades. “The impact has perhaps not been direct, but indirectly, the impact has definitely been quite big,” says Niko Ek, Head of Sales Europe at SAS. “We enable the markets to become closer, both from a business and a private point of view.”

 

Part of the Scandinavian infrastructure
While many of its competitors fly to and from Scandinavia, SAS is one of the only airlines that have the strategy to serve Scandinavia by being part of the Scandinavian infrastructure. “We cannot forget that we are also committed to serve and develop domestic and intra-Scandinavian networks, that actually enable people to live outside the capital areas and still have access to global networks. That is something that definitely has been a key for the Scandinavian and UK markets, when we talk about connections.”

According to Niko, SAS has a wide range of different kinds of customers, when it comes to age, nationality, and purpose of travel. “Our main target group is what we call Scandinavia’s frequent travellers, whatever purpose of travel. But if you look at our travel mix, you will probably find a little bit more business purpose travellers, compared to especially new competitors in the market.” Not a one-size-fits-all experience To fly with SAS is not a one-size-fits-all experience. It is up to the customer to decide what they want to have included in the ticket. We have everything from a scaled-down more basic product to a full premium business product, and everything in between. “The key is to offer the flexibility on top of a high standard, basic product,” says Niko and continues: “We cannot always compete with price against the ultra-low-cost airlines, and we don’t even want, or need to be the cheapest on the market. The key is really that the product we offer and the value for money have to be in good balance, and that is what we deliver.”

 

Biggest and longest crisis in history
When the pandemic struck the world in early 2020, the aviation sector lost its passengers in a matter of weeks. While traditional business travel decreased the most to a practically nonexisting level, crucial trips and business-critical trips are still being made to some extent. “This was the biggest and the longest crisis ever for the aviation sector. We have had crises before, everything from terrorism to ash clouds, but these have been quite short crises. Now, the demand was more or less gone in a couple of weeks for most airlines.” Niko explains that the centre of the challenge was that cash flow disappeared from one day to another, which is why many airlines went under. “It is a capitalintensive industry, so it was a huge challenge that the cost was still there, but without income.”

 

Changing patterns of business travel
As vaccines are being rolled out and countries are preparing to reopen their borders, Niko believes that visiting friends and relatives will be one of the main reasons for travel during the first year and that shorter trips will be back faster than the longer ones. Even if business travel will be back, he foresees that it won’t be back to pre-pandemic levels anytime soon. “Remote working and digital meetings will change business travel, and we do not believe that all business travel will be back. It is better to be realistic and change the way we see the market.” Still, business travel will continue to be an important part of SAS’ business. “We are not going from being very much a business purpose airline to becoming full leisure. It is just the proportion between these that probably will change.”

 

Finding a balance
As we move into a ‘new normality’, Niko suggests that people will be finding a balance between what they want to do digitally and what they would do in person. And that is going to be different for different individuals, organisations, and businesses, which will translate into different travel behaviour. “I do believe that travelling for short over-day meetings will probably be reduced. Commuting very frequently between countries is probably also something that will be reduced now when organisations realise that you don’t actually have to be in the office every day. You can live somewhere further away, and then maybe visit the office fewer times a week.”

 

Flexibility is key
Rigorous safety measures were implemented at a very early stage at airports and onboard to prevent the spread of the virus, and according to Niko, there have been very few cases of transmissions, also thanks to the advanced clean-air systems onboard SAS airplanes. “For us it has been a lot about communicating with the customers and make them feel safe when travelling with us.” Another aspect of security is the possibility to rebook or cancel a trip on short notice.“ A key factor for us has been the flexibility that we offer our customers. For our most frequent travellers who have our SAS EuroBonus high-level tier membership, we have extended the validity, so that they are not affected by this time period that they actually have not been able to travel. At the moment we offer four times more qualifying points value for them to earn a status that they potentially didn’t have before.”

 

Part of the community
As a significant-sized employer with multiskilled staff on furlough, SAS has actively taken several initiatives that benefit society during the pandemic. “We really believe that we are all in it together. SAS’ staff is well-educated and prepared to meet unexpected and challenging situations, always with safety as the highest priority. In times of crisis and great stress, these qualities come in handy in many places in society. In cooperation with a number of partners, SAS employees are offered the possibility to temporarily, and on a voluntary basis, carry out work to take some load off the health care sector,” Niko says and adds that SAS has been flying rescue flights to bring Scandinavian citizens home from different parts of the world and flown cargo flights to bring crucial medical equipment to Scandinavia in cooperation with the governments. “Now, we are supporting in the big vaccination initiatives that are ongoing. We are a part of the community and we want to help where we can.”

 

Speeding up sustainability initiatives
One of the more positive outcomes from the pandemic is that SAS has been able to speed up the process of renewing its fleet. “We have worked with sustainability for several year years. The single biggest impact that you as an airline can make is having the right efficient aircraft. Something good has actually come out from the pandemic, as we have phased out the older aircraft faster than we originally had planned, which makes our average aircraft age much younger. On European routes, we will be operating the Airbus 320 Neo, which is the absolutely most fuel-efficient narrow body aircraft in the market. We are the biggest operator currently of this model and with phasing out the slightly older aircrafts quicker, we actually reach the best possible starting point in our sustainability efforts.” With sustainability as one of the main pillars of its strategic initiatives, SAS aims to reduce 25% of its co2 impact by 2025. “This is quite an ambitious target, but we are not far away from that goal.” Apart from updating its fleet, the airline co2 compensates all SAS EuroBonus member and youth tickets. “Also, the sustainable aviation fuel, or what you call biofuel, is an ancillary service that we offer both individuals and corporate customers. In the short term, for the next five to ten years, this is going to be key to reducing emissions.”

 

Emerging stronger after the pandemic
Apart from focus on sustainability, other success factors going forward include reducing the complexity in the company, in the cost basis and increasing the efficiency. “We need to maintain a high level of flexibility, so that we can meet seasonal adjustments even better than we could before the crisis, and to change according to demand.” Niko is certain that SAS will be the leader when it comes to market share and brand preference for its main target groups after the crisis. “We had a good momentum where we were both winning market shares and having record numbers of passengers before the crisis. With the recapitalisation that we have been through during the pandemic and all updates in the fleet and efficiency measures, there is no reason to believe why we wouldn’t continue from where we were before the pandemic and become even stronger. Our ambition is not to conquer the world, it is to focus on people who travel frequently to, from and within Scandinavia.”

 

Best and youngest fleet possible
The routes SAS has been flying between the UK and Scandinavia are well established and have been served for years – flights from London Heathrow and Manchester to Scandinavian capitals, as well as from Aberdeen to different parts of Scandinavia – all of which Niko predicts will be returning as soon as the crisis blows over. “I think all these routes will come back strong, and the frequencies will be added step by step when we get back to a more normalised demand.” And when travellers are returning, they will be met by a new and improved SAS. “We will continue to offer a safe and competitive product with personal service, but as a customer, you will meet an SAS with the best and youngest fleet possible.”

 

THE PATRONSHIP
The SCC patronship consists of a core group of SCC member businesses committed to supporting the Swedish-British business community. The patronship comes with a range of benefits – if you would like to know more, please contact membership@scc.org.uk.

 

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