SAS to implement a variety of result improvement measures

SAS to implement a variety of result improvement measures - capacity to be cut by 12% SAS has previously reported that the development in passenger mix worsened in July and August compared with previous months. Overall Business Class was lower than last year, which has put yields and revenues under pressure. The demand has continued to weaken significantly in the wake of the terrorist acts in the U.S.A., and put significant additional pressure on yields and revenues. "As a result of these events and the great uncertainties facing SAS and the whole airline industry, SAS has decided to implement a series of measures to prevent a loss in the Full Year 2001. SAS plans to replace its long-haul fleet is still intact, but we will adjust the pace of the replacement" SAS CEO Jørgen Lindegaard says. These measures can be divided into three parts: 1. Capacity adjustments 2. Result improvement measures 3. Price increases 1. Overall capacity (ASK) will be adjusted down 12% in 2002 compared with earlier planned production. In total, 5 destinations will be closed down. These destinations are Kaliningrad, Tel Aviv, Barcelona, Delhi and Stansted. In addition several frequencies will be cut to/from Budapest, Wroclaw, Prague, Zurich, Amsterdam, Tallinn; Berlin, Paris and Milan. SAS will also reduce several frequencies on Swedish domestic routes. The flights between Oslo- Newark, Gothenburg-Paris and Stockholm- Hamburg will be closed down. In addition to the above an additional intercontinental aircraft will be withdrawn from operations but the route and/or destination will be announced within a few weeks. The capacity reductions will be distributed as follows: Capacity adjustments 2002 vs. planned production 2002: Frequenci ASK es Intercontine -22% -20% ntal Europe -10% -10% Intrascandin -2% -3% avian Sweden -9% -8% Total -7% -12% A total of 16 aircraft will be taken out of traffic. These are 3 wide-body jets, 10 narrow bodies and 3 commuter aircraft. A total of 800-1100 in redundancies is expected as a result of the reductions. It is our ambition to handle the redundancies in Scandinavia through voluntary solutions and transfers. These reductions in capacity are expected to improve profitability in excess of MSEK 500-600 for 2002. 2. As recently advised, result improvement measures are now being initiated covering both income and cost. These measures will short term result in postponement and/or close scrutiny of projects and reductions in the number of consultants used. In order to achieve substantial and long- term result improvements all major areas within production, marketing, product and business development as well administration will be analyzed and revised for higher efficiency and accuracy. 3. In the view of the profitability problem within the airline industry and increased costs caused by significantly higher insurance premiums as well as tighter security measures and procedures, SAS will implement a price increase of 5% as from October 1, 2001. For further information please contact Jørgen Lindegaard, President & CEO +46 8 797 1361 Gunnar Reitan, Executive Vice President & CFO +46 70 997 2844 Marie Ehrling, Executive Vice President & COO +46 70 997 2156 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/09/26/20010926BIT01130/bit0001.doc http://www.waymaker.net/bitonline/2001/09/26/20010926BIT01130/bit0001.pdf