New union contracts strengthen SAS Group

New union contracts strengthen SAS Group The new union agreements within the SAS Group are now concluded and as a result the Turnaround 2005 action program can be implemented as planned. Concurrently, work is proceeding with incorporating Scandinavian Airlines by establishing independent national companies within the SAS consortium. The international flight operations will become a business area within the SAS consortium. The Turnaround 2005 action program will give the SAS Group long-term competitiveness and profitability. Savings of about SEK 14 billion are required for the program to succeed. Decided and defined actions currently amount to SEK 12.5 billion and the remaining portion of about SEK 2 billion related mainly to renewed union contracts for all personnel groups. "We have succeeded in achieving the savings required and thanks to the responsible actions of the unions we now have the conditions to become Europe's most competitive network company," says SAS CEO Jørgen Lindegaard. There is still no agreement with the Swedish Transport Workers' Union, nor have the parties conducted any negotiations in this contract round. Within the framework of Turnaround 2005, work continues to establish independent airlines in Denmark, Norway and Sweden. In Norway, Scandinavian Airlines will be integrated with Braathens and the combined operations will become a subsidiary in the SAS consortium under the name SAS Braathens. Based on the new contracts, the merged company SAS Braathens gains a competitive cost level. In Denmark and Sweden, new limited liability companies will be established and the personnel transferred to the new companies with the union contract terms signed in this year's contract activities. The intercontinental flight operations will be organized as a business unit in the SAS consortium. Economic effects of the renewed union contracts Compensation in the form of salaries and remuneration levels in the union contracts yields a positive effect of about SEK 1.5 billion, with full effect in 2005. The effect during the current year is estimated at SEK 800 M. The contract with the pilots is calculated to provide SEK 700 M, the cabin contract about SEK 400 M and the other contracts the remaining amount. This means that the SAS Group achieves the savings goal of SEK 14 billion in 2005. In addition, there are possibilities for further savings of about SEK 500 M in selection of business and distribution models. The contract with the cabin personnel also includes simplifications in the salary increment structure, which will also provide for further savings even after 2005. In addition, there are synergy effects of about SEK 200-300 M as a result of the merger of SAS Braathens in Norway and a changed organizational structure. For further information, please contact: Hans Ollongren, SVP, Corporate Communication and Public Affairs, SAS Group, +46 8 797 19 50 or +46 709 97 19 50 Simen Revold, Director Corporate Communications SAS Group Norway, +47 957 16310 Troels Rasmussen, Director Corporate Communications SAS Group Denmark, +45 23 22 4675 SAS GROUP CORPORATE COMMUNICATIONS ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2004/03/24/20040324BIT00130/wkr0001.doc http://www.waymaker.net/bitonline/2004/03/24/20040324BIT00130/wkr0002.pdf