SAS scraps busi­ness class in Europe

The Pak Banker - - COMPANIES/BOSS -

SAS Group (SAS), the largest Nordic air­line, be­came the first ma­jor Euro­pean net­work car­rier to scrap its busi­ness class in fa­vor of a model po­si­tion­ing it closer to dis­count op­er­a­tors such as Ryanair Hold­ings Plc. (RYA)

SAS will elim­i­nate its busi­ness cabin, in which the mid­dle seat of three was left empty to give more room and pas­sen­gers were served a three-course meal, in fa­vor of a uni­form seat­ing plan and a trol­ley-based food ser­vice. Peo­ple will be able to pay ex­tra for faster air­port tran­sit and an ex­tra checked bag.

SAS will elim­i­nate its busi­ness cabin, in which the mid­dle seat of three was left empty to give more room and pas­sen­gers were served a three-course meal, in fa­vor of a uni­form seat­ing plan and a trol­ley-based food ser­vice.

"We've torn ev­ery­thing up and started from scratch," SAS spokes­woman Elis­a­beth Manzi said by tele­phone. "Busi­ness class was the right thing in the 1980s, when we helped pioneer it, but the mod­ern trav­eler has dif­fer­ent needs. The high­est pri­or­ity now is time and af­ford­abil­ity, not lux­ury."

SAS's plan is the most rad­i­cal yet as former flag-car­ri­ers in­clud­ing Air France (AF) and Ibe­ria shrink Euro­pean op­er­a­tions to cope with high fuel costs and com­pe­ti­tion from dis­count car­ri­ers in­clud­ing Ryanair and Nor­we­gian Air Shut­tle ASA. The com­pany said it will re­tain a pre­mium of­fer­ing on long-haul flights, where more peo­ple are pre­pared to pay for ex­tra com­fort.

SAS fell as much as 1.8 per­cent and traded 0.4 per­cent lower at 14.05 kro­nor as of 12:23 p.m. in Stock­holm, where the com­pany is based. The stock has added 79 per­cent this year, giv­ing a mar­ket value of 4.62 bil­lion kro­nor ($706 mil­lion).

The de­ci­sion to elim­i­nate busi­ness class on Euro­pean flights came about fol­low­ing a study that fo­cused on "cus­tomer needs rather than on in­dus­try stan­dards," SAS Chief Ex­ec­u­tive Of­fi­cer Rickard Gustafson said in a state­ment.

SAS is unique in scrap­ping short-haul busi­ness class among peers in­clud­ing Bri­tish Air­ways, Ibe­ria, Air France, KLM, Swiss and Lufthansa, de­spite hav­ing led its in­tro­duc­tion in 1981. Its EuroClass prod­uct of­fered more legroom, up­graded meals, lounge ac­cess and other perks aimed at lur­ing cor­po­rate trav­el­ers, all at a full-fare econ­omy price that re­placed first class.

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