It’s an exciting time at Scandinavian Airlines (SAS). The airline has just emerged from bankruptcy protection, and now has an investment from Air France-KLM, and has also left Star Alliance and joined SkyTeam.
Coinciding with this, the airline is making a bunch of changes, ranging from launching flights to Seattle, to introducing business class on flights within Europe. The company has now revealed a more fundamental strategy shift, which I think makes a lot of sense.
In this post:
SAS will be more focused on Copenhagen hub
Historically, SAS has had major bases in Copenhagen, Denmark (CPH), Oslo, Norway (OSL), and Stockholm, Sweden (ARN).
While I can appreciate the concept behind this — SAS was the de facto global carrier for all those airports — the reality is that it has made SAS’ network pretty fragmented. I’ve often searched online for itineraries on SAS, only to find that a double connection would be required, and then I ended up booking a different airline.
Clearly SAS has identified this as a problem, and the airline now has a new strategy. SAS will now use Copenhagen as its main hub and as a key international gateway to and from Scandinavia and Northern Europe.
SAS describes Copenhagen as having an attractive location for efficient same-day travel across Northern, Central, and Western Europe, and states that the hub will also serve as a key transit point for long haul travel, connecting Europe with North America and Asia. Indeed, Copenhagen has the benefit of being a bit further south than both Oslo and Stockholm, and that’s a major advantage given the closure of Russian airspace.
While Oslo and Stockholm won’t fully lose long haul flights, the plan is that these hubs will primarily offer connectivity focused on regional and European travel. It’s probably also no coincidence that the Danish state is also the second largest shareholder of the airline, and that the Norwegian and Swedish governments no longer have a stake in the airline.
Here’s how SAS CEO Anko van der Werff describes this strategy development:
“Following new ownership and the successful completion of our restructuring, SAS is emerging as a competitive and financially strong airline. By enhancing Copenhagen as our main hub and expanding our network, we are boosting connectivity and driving economic growth not only in Denmark but across Scandinavia. As we focus on building a global hub in Scandinavia, Copenhagen will become a central gateway, bringing the region even closer together.”
“For our passengers, this means more travel options, improved convenience, and a seamless experience across a growing number of destinations.”
SAS is looking a whole lot more like Finnair
When you look at Northern Europe, Finnair and SAS are the two global airlines. It’s interesting how SAS is essentially trying to follow in Finnair’s footsteps:
- SAS hopes to join the SkyTeam transatlantic joint venture (with Air France-KLM, Delta, and Virgin Atlantic), while Finnair is part of the oneworld transatlantic joint venture (with American, British Airways, Iberia, and Aer Lingus)
- SAS is finally introducing business class on flights within Europe, just as Finnair has had for years
- SAS will use one primary hub for its flights, taking advantage of its strategic geography in Northern Europe (in fairness, Finnair has always only been associated with one country, so the historical strategy difference there isn’t surprising)
Admittedly airlines in Northern Europe don’t quite have the geographic advantage that they used to have. Back in the day, the Northern Europe hub was ideal geography for providing the most direct connectivity to Russia and to other parts of Asia, given the routings that were possible.
With the current Russia conflict, that advantage has largely turned into a disadvantage. There aren’t many places you can fly east from Northern Europe, and for that matter, routings are now much longer than they used to be. I will say, Copenhagen has much better geography than Helsinki does for most long haul connectivity.
For example, take Finnair’s flight from Helsinki to Tokyo, which requires quite the detour.
Meanwhile SAS’ flight from Copenhagen to Tokyo still requires a detour, but it’s a bit more direct.
Bottom line
SAS is trying to become more competitive with other network carriers in Europe. The airline will increasingly emphasize its Copenhagen hub, due to its strategic geography, to enable efficient connections, and presumably also because the Danish state is the company’s second biggest shareholder.
This strategy makes sense, and when coupled with the carrier’s other plans, it should set the airline up for (more) success.
What do you make of SAS shifting its strategy to prioritize Copenhagen?
Flew ZRH to SIN last year - and we flew right through IRAN and over Tehran - and then Afghanistan and Pakistan. I guess Swiss are neutral with all nations.
not all countries follow the guidance of western countries but I still wouldn't want, even as a Swiss, to have to divert to Iran. You fly over a country and there is a risk of that happening.
and the US does not allow foreign carriers to put US airline codes on flights that overfly countries that the US does not allow its own carriers to overfly. Probably doesn't matter for LX but those are still the rules.
Lots of good points here.
With the Swedish and Norwegian governments out, and thus hopefully no more politicians trying to run a business, the choice for CPH is a logical one. Also from an operations perspective: the long haul fleet of SAS is tiny, so it makes sense to concentrate it at one hub. And, in the current geopolitical climate, ARN is a bit locked away in a faraway corner of Europe. OSL will...
Lots of good points here.
With the Swedish and Norwegian governments out, and thus hopefully no more politicians trying to run a business, the choice for CPH is a logical one. Also from an operations perspective: the long haul fleet of SAS is tiny, so it makes sense to concentrate it at one hub. And, in the current geopolitical climate, ARN is a bit locked away in a faraway corner of Europe. OSL will not see long haul traffic 'as there is no market for it', as has been a stance taken by SAS decades ago (meanwhile about a dozen other carriers operate long haul flights there).
I'm very worried about CPH though. They had to close one runway for maintenance for a few months last year, and it resulted in massive amounts of flights being cancelled and delayed. They had some pre-Covid plans about expansion, and I'm not sure if they actually will proceed. Expansion of capacity (and runways) will be essential for CPH to succeed as a main hub, as the airport is nearly always very crowded these days.
I won't be too worried about AMS and The Netherlands. For what I understood, the Dutch just got a new right wing government which doesn't really have any ambitions to do weird things with their main airport or airline. Besides, we're talking SAS here, not KLM. KLM won't open a hub at CPH.
What I'm really hoping for though, is a clear vision of the route network. Adding a few flights is nice, but quite many smaller European airlines have a vision in their (long haul) route network. Brussels has a focus on Africa, TAP on Brazil, Finnair on Asia. What does SK want to do, who do they want to be? Now that there's no longer an indecisive Rikard in the lead, but an Anko who actually dares to take decisions, I'm hoping for (rather: expecting) more SK news in the near future...
I think AF/KLM will move some connecting traffic from AMS to CPH due to the Dutch government's greenie shenanigans regarding Schiphol capacity. This shift will provide the passengers to help SK grow its CPH network.
So the danish unions finally fucked norway and sweden
There is a lot to unpack here. Let's start with the Nordic comparisons.
Finnair had remarkable advantages. A geographic position allowing them to provide the quickest gateway to Asia via Helsinki. They had cordial relationship with their big neighbor in the East. With the location, they could roster one (1) A330/340/350 on each route to Asia. This is an incredible advantage, because your fleet make money in the air. They could serve two segments +...
There is a lot to unpack here. Let's start with the Nordic comparisons.
Finnair had remarkable advantages. A geographic position allowing them to provide the quickest gateway to Asia via Helsinki. They had cordial relationship with their big neighbor in the East. With the location, they could roster one (1) A330/340/350 on each route to Asia. This is an incredible advantage, because your fleet make money in the air. They could serve two segments + two turn-arounds in 24 hrs with one aircraft to Asia, or put it in an optimal sling with US destinations. The aim then was to bring UK, German and rest of Nordic traveler to HEL with an optimal hub and spoke. Simply look at the ratio of long-haul vs. short-haul aircrafts of AY vs, SK and it explains a lot of the business.
Two things killed this: first Covid, then the invasion of Ukraine. AY has been extremely nimble with their fleet since. Signing wet lease agreements with both QR and QF.
Iceland Air runs a similar idea for North America via KEF.
SAS on the other hand, has tried to be all things to everyone. Which turns into nothing to nobody. If I am not mistaken, the singles biggest SAS operation is domestic Norway. So for Norway, SAS is a part of infrastructure and national security by enabling population in remote areas. In Denmark, Copenhagen Airport is the largest private employer. And the company has HQ in Stockholm, with vested local interest. This is bound to create issues.
SAS failed IMHO because of this. Too many stakeholders, too many conflicting needs, too little focus. SK was left out of the lucrative Star Alliance North Atlantic Joint Venture whilst a puny airline like SN was in (as a part of LH-Group).
CPH has about 100M people within 60min flight from Poland in the East to most of Northern Germany. I would argue a Berliner or Hamburger should connect in CPH over FRA or MUC. I live near ARN, and everyone here is up in arms. But they don't get this.
For AF/KL it makes a ton of sense as they plan to increase their 19.9% share to create a third hub with the Dutch government's current position. I can also say that the current yields from CPH seems higher compared to ARN/OSL. The DKK is pegged against the EUR, the SEK/NOK is not. Therefore, DKK based income is better for SAS.
I think it's only a matter of time before SAS changes domiciliation and HQ from Sweden to Denmark.
In terms of SAS not investing in Asia. Pre-covid it was TYO. PEK, HKG and PVG. Like many, they have not returned to PEK and HKG. BKK reopened after 12 years.
It makes sense to fly to the US for geopolitical reasons. And it's easier to create good aircraft utilization which they need.
I think there is nothing inherently problematic with trying to be an airline for all of Scandinavia. The issue is the Swedish government dropping out after COVID. They lost ARN as a hub, and they'll probably lose the HQ in Stockholm. They're also about to lose traffic to Bromma, as well as all the revenue from the national aviation tax.
SAS costed a lot of money to the taxpayers, but it filled a social purpose...
I think there is nothing inherently problematic with trying to be an airline for all of Scandinavia. The issue is the Swedish government dropping out after COVID. They lost ARN as a hub, and they'll probably lose the HQ in Stockholm. They're also about to lose traffic to Bromma, as well as all the revenue from the national aviation tax.
SAS costed a lot of money to the taxpayers, but it filled a social purpose and a public service, and had really good prices and customer experience. Now all there is left is profits for the new owners (private equity).
CPH is a surprisingly dated and unappealing airport. God forbid one has to deal with its baggage claim.
As FNT noted, this new strategy appears driven by Danish government ownership. It will create an odd situation for Stockholm. Will Norwegian and Ryanair become its principal carriers?
It will be interesting to understand what this means for the recently announced BRA-SAS partnership, given that BRA just agreed to move all of its flights from Bromma to...
CPH is a surprisingly dated and unappealing airport. God forbid one has to deal with its baggage claim.
As FNT noted, this new strategy appears driven by Danish government ownership. It will create an odd situation for Stockholm. Will Norwegian and Ryanair become its principal carriers?
It will be interesting to understand what this means for the recently announced BRA-SAS partnership, given that BRA just agreed to move all of its flights from Bromma to Arlanda to feed SAS.
It will also be interesting to see what might happen with the TG relationship, given that SAS set up TG for the Thai government back in the day.
They should rename the airline too. SAS is no longer relevant.
DAS would be better fit for the new strategy.
Copenhagen is so underrated. A better Amsterdam IMO.
Both a nice cities worth visiting, but actually quite different. It depends what you want to do and see.
Copenhagen is nicely located with lots of water. Is has nice buildings and excellent (though quite expensive) dining.
For the time being, SAS should focus on North America and EMEA. Leave Africa, South America and Asia to AF/KL. CPH OSL ARN are well positioned to serve Canada and northern US via polar routes.
Emma is Europe middle east africa.
This is not a Danish hub, but a Scandinavian one.
Remember, ties between the Nordic are super strong. The same pax who fly short-haul from Stockholm or Bergen **will** be the same pax who fly from CPH (and soon AMS/CDG) to get to where they need to go.
Or in other words, Skyteam can tap into a population over 27 million and an economy worth over $1 Trillion USD.
Also since the completion of the Oresund Bridge Copenhagen and southern Sweden are more integrated than ever. CPH makes more sense as the hub airport to travel to from Malmo than ARN, and numerous other Swedish cities nearby.
Air France invested in SAS in order to create a stronger SAS and SAS knows that the fragmented network they had minimized their potential.
Even without a joint venture, they are growing closer to Delta hubs in the US and Delta's route announcement expected on Friday is likely to fit hand-in-hand with SAS' network refocusing. CPH is a strong mid-size local market and has the potential to carry much more connecting traffic not just...
Air France invested in SAS in order to create a stronger SAS and SAS knows that the fragmented network they had minimized their potential.
Even without a joint venture, they are growing closer to Delta hubs in the US and Delta's route announcement expected on Friday is likely to fit hand-in-hand with SAS' network refocusing. CPH is a strong mid-size local market and has the potential to carry much more connecting traffic not just to northern Europe but to Eastern and Central Europe.
The A321NEO will help offset the sting that Sweden and Norway will feel by allowing SAS to keep some routes from ARN and OSL that otherwise would be cut if only widebodies were left for international flights.
Interestingly enough (unrelated to the above), today marks exactly 5 years when SAS launched its current livery with a big ‘SAS’ on the fuselage — 19/9/2019, and on the same day of the week as well! How much has changed in the last few weeks… and SkyTeam has increased its lead as the alliance with the most non-white liveries, while the Star Alliance now has none, at least until ITA Airways enters.
The thing is, SAS never had that much of an Asian focus — serving just NRT and PVG until relaunching BKK in late 2023 (all Star Alliance hubs, by the way, which no longer applies) — while Finnair went all-in on Asia, but that strategy cost it heavily between the closure of Russian airspace and the absolute lack of postpandemic demand from China in particular. There’s only so much cooperation Finnair can do with JAL,...
The thing is, SAS never had that much of an Asian focus — serving just NRT and PVG until relaunching BKK in late 2023 (all Star Alliance hubs, by the way, which no longer applies) — while Finnair went all-in on Asia, but that strategy cost it heavily between the closure of Russian airspace and the absolute lack of postpandemic demand from China in particular. There’s only so much cooperation Finnair can do with JAL, given how hard it has become to fly betwee HEL (which JAL also serves) and HND/NRT.
As such, SAS would be better off flying to ICN, given its SkyTeam partner Korean Air’s base there — though I presume BKK will remain, given Scandinavian travellers’ love for Thailand (and indeed TG relaunched OSL recently). However, given that SAS is now in SkyTeam, cooperation with TG is off the table — and even though SQ is the one Star Alliance member SK maintains a partnership with, flying to SIN is simply not feasible for SK, as SQ serves CPH as well.
I believe they served HKG pre pandemic? It would be nice to see this come back, especially with CX no longer serving CPH, although maybe it's less likely now that they're in SkyTeam and both AF and KLM fly there.
They served PVG, NRT, PEK and HKG pre-pandemic and recently picked up BKK again after a hiatus of a few years. Oh, and BEY actually also counts as Asian. :)
I don't think they'll return to HKG, as the city is changing rapidly in a certain direction. PEK was mostly as a feeder for/from Air China, which now has the advantage of being able to fly over Russia, and additionally, SK is not longer in...
They served PVG, NRT, PEK and HKG pre-pandemic and recently picked up BKK again after a hiatus of a few years. Oh, and BEY actually also counts as Asian. :)
I don't think they'll return to HKG, as the city is changing rapidly in a certain direction. PEK was mostly as a feeder for/from Air China, which now has the advantage of being able to fly over Russia, and additionally, SK is not longer in *A. PVG was mainly due to lots of Scandinavian business interests in Shanghai, and Tokyo was a bit of an odd one, as the main hub of ANA is at HND, not NRT. Nevertheless, they seemed to have a full business class most of the times and that's what matters.
BKK was also a *A hub and lots of Scandinavian men have imported a bride from over there, meaning good traffic for family visits. I guess old times sentiments about SK helping to start Thai some decades ago don't really matter.
I don't know if ICN would be a logical choice right now, as they'd have to make a long detour to get there. Perhaps Xiamen, Taipei, Hanoi or Ho Chi Minh would make more sense? They're also SkyTeam hubs and would open up for traffic to both (South) East Asia and Australia/Oceania.
We'll see. It seems that SK is finally daring to make some decisions and that was about time. I'm sure there'll be more route network news to some.
I'd be surprised if this development leads to SAS becoming significantly more of a "player" than it was before.
For many Swedes on the west coast and in the south, Copenhagen has long been a preferred hub to Stockholm. So much so that at times I've heard announcements at Copenhagen airport made in English and Swedish, rather than Danish!
It is high time for the restructured SAS to show its true potential.
Dr. Güntürk Üstün
Merhaba Gunturk'cum. Seni burda gormek ne guzel. Uzun zaman oldu. Umarim iyisindir.
It seems like a well-analyzed, very appropriate decision.
Dr. Güntürk Üstün
In what sense is SAS a global airline? It has three hubs (Copenhagen, Stockholm and Oslo) but a very poor network and their fleet does not even compare to that of Finnair. These three countries combined have a population 4 times bigger than Finland's.
The only reason this is happening is because the Danish government owns 25.8% of SAS.
As if joining skyteam wasn’t bad enpugh… but As a Swede from Stockholm this is such a slap in the face for all the money swedish taxpayers and private foundations (the wallenbergs) have poured into the airline. Not to mention how SAS golden years were all under swedish leadership… the danes are coming for us yet again!