SAS Struggles in Wake of Government Ban on Miles

SAS Struggles in Wake of Government Ban on Miles

Even though the SAS group transported a total of 3.1 million passengers in September of 2002, an overall increase of 40 percent, a ruling from the Norwegian Competition Authority that the SAS group could no longer grant frequent flyer miles on domestic flights within Norway may be taking its toll.

According to Anders Bjorck, director of marketing, “September was not a good month.” While the full impact of the ban remains to be seen, Bjorck says revenues are down 28 percent. Part of the problem, Bjorck says, is that a new domestic carrier, NAS, may be encroaching on market share and is “certainly not helpful” in promoting domestic Norwegian traffic on SAS.

With regard to the Norwegian Authority’s decision, Bjorck is adamant. “We are not happy. We are far from satisfied with the decision.” Still, “it is tough to fight them — they are the government.”

Simple comparisons of last year’s traffic with this year’s are not accurate, Bjorck claims. When comparing September 2002 with 2001, it is important to take into account the weak traffic following the events of Sept. 11 of last year. What’s more, the figures released on Oct. 9 include passengers flying on the recently acquired Braathens Airlines, and thus are not an accurate indication of the effect of the miles ban in Norway.

Norway is the only Scandinavian nation to have completely banned miles on domestic flights, though Bjorck says Sweden has also prohibited miles on flights where SAS has competition.

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