SAS under growing pressure from local LCCs at Stockholm Arlanda

Sabine G Lauterbach of LFV and Captain Anna Sundberg of SAS cutting the ribbon that officially inaugurated the Stockholm – Tromso route.

SAS Scandinavian Airlines may be unique in being the national airline of three different countries (Denmark, Norway and Sweden) but this also leads to problems when it comes to optimising its route network. Its three biggest bases are, not surprisingly, at the capital city airports of its three owners, but Sweden’s Stockholm Arlanda has only around two-thirds the number of flights and weekly seats as Oslo and Copenhagen although the total number of destinations served is similar.

Of the 54 destinations served by SAS from Arlanda 13 are domestic destinations while a further five are to Norwegian destinations. Outside of Scandinavia the most popular country markets are Germany and the UK each with five destinations. Long-haul flights are currently limited to Beijing (six times weekly), Chicago and Newark (both daily).

Source: Derived from OAG Max Online data for w/c 16 June 2008

SAS operates 15 monopoly routes from ARN including five domestic routes and two to Norway. The remaining routes are to Bristol, Chicago O’Hare, Dublin, Geneva, London City, Manchester, Milan Linate and Zagreb. These routes represent around one-sixth of all flights and one-fifth of all ASKs. On around 40% of flights the airline faces competition from two other carriers, usually the flag-carrier at the downroute airport plus one of the local LCCs.

On flights to Dűsseldorf the airline faces competition from Lufthansa, FlyNordic and Norwegian though FlyNordic is now owned by Norwegian.

Combining the market shares of Sterling, FlyNordic and Norwegian reveals that these three local LCCs operate around 14% of flights and have a 19% share of the airport’s scheduled seat capacity. The average aircraft size at Arlanda for SAS is 128 seats.

Recent route additions for SAS at Arlanda

In the last few months SAS has started a number of new routes from Arlanda including a thrice-weekly long-haul service to Bangkok which appears to only operate during the winter season. Thai Airways, a fellow Star Alliance partner operates the route year-round. Low frequency (less than daily) services have also been started to Barcelona (where SAS subsidiary Spanair operates 10 weekly flights), Stavanger and Zagreb.

31 March, SAS introduced flights between Stockholm Arlanda and Zagreb.

A twice-weekly service to Milan Malpensa to complement the airline’s existing daily Milan Linate services was supposed to start on 16 April this year. However, no such service currently exists leaving the door open for easyJet to announce its first ever Swedish service between Milan Malpensa and Stockholm Arlanda earlier this week. Furthermore, Sterling has also just announced plans to connect the two airports starting this autumn with two weekly flights.

Earlier this week a new service to Tromso began operating. Initially the service will operate just for two months to see how much demand there is for services to Northern Norway. In December a new service to Kittila in northern Finland is planned which will also operate twice weekly. Flights will operate on Fridays and Mondays creating an ideal weekend break for ski enthusiasts.