SAS Looks to Lower Costs by Opening Irish Subsidiary

Feb 2, 2017

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

In order to keep up with increased competition for international travel, Scandinavian Airlines (SAS) is planning to open a new air operator certificate (AOC), but not to open a new low-cost carrier. The triple-flag carrier announced that the new AOC would be based in Ireland, with operating bases in London and a to-be-determined location in Spain.

The new AOC would not operate as a low-cost carrier for SAS, and would not directly compete with Norwegian Air or other carriers on international routes. Instead, the airline noted that the new AOC will allow the carrier to lower its internal costs, while maintaining the current safety standards and passenger experience. Using a similar strategy as Norwegian Air and other low-cost carriers, by opening the Irish company SAS will enjoy the advantage of lower labor and international flying costs between Europe and Scandinavia.

Using its 20 daily departures from Great Britain as an example, SAS noted in an interview with The Points Guy that it could reduce overall costs while retaining a high level of service. Operations would begin with up to eight new Airbus A320neo aircraft split between the two air bases. SAS currently has 30 A320neo aircraft on order.

“We are always offering competitive prices… and our customers are expecting really good prices, while expecting a really good network and time schedule,” Fredrik Henriksson, head of media operations for SAS, told TPG. “We need to offer that to our Scandinavian customers… this is one way to keep growing SAS and building a stronger SAS for the future and continue our expansion for the next few years.”

This is a calculated move for the carrier. At the end of 2016, FlightGlobal reported SAS would consider opening operating bases outside of the Scandinavian countries in order to take advantage of savings opportunities that would put its costs on par with competitors’. Although the lower operational costs may not necessarily be passed on to customers in the beginning, the internal moves allows SAS to work toward a path of higher profitability.

The new operations for SAS are expected to be fully implemented by the winter of 2018. SAS noted to The Points Guy that passengers would not see a difference in their experience on aircraft operating under the Irish AOC and those flying under the traditional SAS AOC issued by Denmark, Sweden and Norway.

Featured image courtesy of Shutterstock .

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.