Braathens further strengthens its competitiveness

Braathens further strengthens its competitiveness In the presentation of the SAS Group's third-quarter interim report, the measures to be taken within Braathens as part of Turnaround 2005 were specified at MSEK 500. These measures are being implemented. At a Board meeting of Braathens today is was decided to initiate additional measures amounting to MSEK 500, which means that Braathens' total savings within Turnaround 2005 amount to MSEK 1,000. The new cost reductions will further strengthen Braathens' competitiveness in relation to low-cost competitors in the Norwegian market. With this action, Braathens establishes the foundation for being able to compete at the price levels currently prevailing on the market and in the future with satisfactory profitability. The effects from the new measurements in Braathens will mainly take effect during 2004, and partly in 2005. Full effect will take place as from 2006. All airlines in the SAS Group are currently implementing actions to secure a strong position in the various markets with competitive prices. Scandinavian Airlines and Braathens have carried out several price reductions as a result of cost improvements. With the new measures, Braathens will achieve a total unit cost of about NOK 0.60 per available seat kilometer (ASK). As opposed to the purely low-cost companies, Braathens will retain some of the service elements such as transfers, transit check-in, baggage transfer and interlining with other airlines. These service elements are important to all of the passengers who travel with several connections. With a unit cost of NOK 0.60 per seat kilometer (ASK), Braathens achieves a cost level that is fully competitive with both Norwegian and international low-cost airlines and further strengthens Braathens' competitiveness in relation to other carriers. Compared with the current unit costs level of about NOK 0.76, this represents a unit cost reduction of about 20 percent. Unit costs are the base for airlines' competitiveness, price level and profitability. The additional measures now approved for implementation within Braathens comprise a broad number of activities such as increasing productivity of the aircraft, pilots, cabin crews and administration. Braathens will also focus on increased Internet sales and ticket-less travel. The measures involve improvements and efficiency enhancements within all parts of Braathens' organization. "The new measures will give Braathens a significantly improved competitiveness and strengthen Braathens' position on the Norwegian market as an efficient and inexpensive supplier of travel, both domestic and to Southern Europe, but with a full-service product that the low- cost companies cannot deliver," says Knut Solberg, President of Braathens. "We have noted that our largest competitor on the Norwegian domestic market via the media has steadily referred to Braathens and moreover stated that the costs between the companies differed considerably in 2003 and that this difference will be even greater in the future. This is incorrect. This year Braathens has a unit cost that is on par with the level given by Norwegian as its unit cost during 2003. As a result of the new measures, in the future we will be able to compare ourselves with any other carrier," says Solberg. For a more detailed presentation of the plans, Braathens is holding a press conference today - Monday, December 8, 3:00 p.m. at the Radison SAS Park Hotel at Fornebu. In addition to the management of Braathens, Board Chairman Gunnar Reitan will participate in the press conference SAS CORPORATE COMMUNICATIONS ------------------------------------------------------------ This information was brought to you by Waymaker The following files are available for download:

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