Scandinavian Airline SAS Nears Regional Jet Order With Eye on Post-Covid Travel
(Bloomberg) -- SAS AB is closing in on a regional jetliner order, as the Scandinavian carrier repositions its fleet for post-pandemic competition with a greater focus on fuel efficiency and leisure travel.
The airline, which said before the pandemic it was considering models from Airbus SE and Embraer SA, is nearing the end of its analysis and is likely to come to a decision in early 2022, Chief Executive Officer Anko van der Werff said on a conference call with fourth-quarter results.
While he declined to comment on specifics, van der Werff said the aircraft would be used in two new short-haul operations, Connect and Link, a low-cost brand akin to KLM Cityhopper or Iberia Express.
“We will start those more serious conversations I think fairly soon,” van der Weff said. The company is considering newer aircraft platforms that offer fuel efficiency and flexibility given the size of the market -- “something that really will fit our future network needs,” he said.
Former CEO Rickard Gustafson said in February 2020 that SAS could order Airbus A220s or a rival model from Brazil’s Embraer.
The A220 offers seating capacity ranging from about 100 to 140 passengers, depending on model and configuration. It competes with various Embraer models, including the E195 E2, which seats up to 146 people.
An Airbus spokesman declined to comment. Embraer representatives didn’t immediately respond to requests for comment.
SAS survived the downturn caused by the coronavirus pandemic only through a recapitalization involving its biggest shareholders, the governments of Sweden and Denmark and the Wallenberg family, as well as government loans backed by Norway.
The company has made sustainability a priority as it looks to address a competitive landscape that’s shifted coming out of the pandemic.
A restructured Norwegian Air Shuttle ASA and Finnair Oyj are presenting heightened competition on regional routes, while a greater share of business is based on leisure travel. SAS said Tuesday that it was “evaluating fleet options to handle thinner flows of passengers in our network.”
Some older Boeing 737 aircraft will be phased out within the next year, Chief Financial Officer Magnus Ornberg said in an interview. SAS needs to consider how to cover secondary cities in the most efficient and sustainable way, he said, adding that the company is looking broadly at aircraft options and hasn’t come to any conclusion yet.
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