Scandinavian airline SAS unveiled plans on Wednesday to lift profits by cutting costs and spinning off units such as Spanish airline Spanair. The airline, half-owned by the governments of Sweden, Denmark and Norway, said it aimed to raise annual pretax profits to about 4 billion Swedish crowns ($565 million) and cut costs by 2.8 billion crowns by 2011.
SAS, which has said it needs to boost earnings to cope with investment in renewing its passenger jets in the coming years, reported a pretax profit of 292 million crowns in 2006.
"SAS is to concentrate on its core business - flying to, from and within Northern Europe, the home market of our most important customer groups and where SAS' market position is also the strongest," the firm said in a statement. "Through the new direction, SAS will create over a four-year period the preconditions for growth in all markets and increase the number of passengers by a total of 20 percent."
The firm declined to provide any further details regarding its planned cuts, saying the route to achieving the financial goals was "not yet fully mapped out". The carrier, which has been hard hit by fierce competition from low-cost carriers and higher fuel costs in recent years, said it would sell off units that did not fit with its core business - including Spanair, bmi and Air Greenland.
SAS owns 95 percent of Spanair, Spain's second biggest carrier with 3,570 employees. SAS owns 20 percent of British operator bmi and 37.5 percent in Air Greenland.
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