Blue 1 (Helsinki Vantaa) will phase out its remaining fleet of seven B717-200s before the end of 2015 replacing them with B737-600s parent SAS Scandinavian Airlines (SK, Copenhagen Kastrup) has said.
Announcing a fiscal fourth-quarter net loss of SEK719 million (USD92.95 million), SAS president and CEO Rickard Gustafson said the B717's high unit costs had lead to the decision to switch to the B737. From autumn 2015, SAS will move five Boeing 737 aircraft from bases in Oslo Gardermoen and Stockholm Arlanda to Blue 1.
In addition, the recent conclusion of a new Collective Labour Agreement (CLA) with Blue 1 flight crews will allow the Finnish carrier to complete its transformation from a commercial airline focused on Finnish domestic traffic to a production company offering flexible wet-lease services to SAS.
"The agreements make Blue 1 fully competitive compared with other wet-lease operators in the market. The exact type of production that will be carried out by Blue 1 moving forward is currently being evaluated," the carrier said.
Overall, structural changes at Blue 1 as well as at Cimber (Sønderborg), which SAS recently agreed to acquire for DKK20 million (USD3.3 million), are expected to generate SEK250 million (USD32.32 million) in savings for SAS Group as a whole.
In the medium term, SAS is aiming to make SEK2.1 billion (USD273.96 million) in cuts over the period 2015 to 2017 as pressure from European budget carriers such as Ryanair (FR, Dublin International) and local rival Norwegian (Oslo Gardermoen) continues to mount. Having focussed on making SEK3 billion (USD387.8 million) in cost reductions between 2013 and 2015, the new drive will likely encounter stiff opposition from unions who in 2012 accused management of bullying them into accepting job cuts and lower wages.
