The airline was facing increasing competition, rising fuel costs, and falling demand which had led to financial losses. To address this, the airline planned to cut unnecessary costs through consolidation, improve efficiency, focus on the profitable business travel market, and boost revenue through cargo and tourism while also finding other marginal business opportunities. The airline believed that through these changes and by working together, they could recover from their financial difficulties and once again become profitable.

2. We were healthy, profitable com- pretty match agreed on how we
pany for 17 years. would share the increasingly
Business boomed, year after year. abundant bag of goodies.
In IATA, we and other airlines In was a secure and orderly world.

3. Who was to know there were storm clouds beyond the horizon?

4. NEW AIRLINES
SHARPEN INCREASED
FUEL RISING HIGH
NORTH ATLANTIC COSTS PRICES
COMPETITION PRICES
DWINDLING
DEMAND
NEW PRICE
FLAG CAREERS WARS
FIND THEIR OWN
WINGS
AIRLINE
DEFICITS
Suddenly, bad weather stuck…

5. We are in bad shape. But we haven’t
reached the crisis point yet.
If we were, we wouldn’t know how
to get our nose up again.
But we can. If we are ready to fight
for our jobs and our future, we can
recover.

6. It won’t be easy. from our comfortable days under
We are bearing a lot of IATA’s protection. Now we have to
unnecessary costs originating trim the fat.

7. We’ve got some tough competition. domestic market. Efficient. In shape.
Like the “street fighters” from the Like Delta…
rough-and-tumble American

8. Our European companies which have And who keep making money, hard
pursued more consistent and times or not.
purposeful policies than we have.

9. Look at the differences:
Key figures* Swissair SAS Delta has:
INTERNATIONAL INTERNATIONAL
o 40% more revenue tonne-kms
Cabin Factor 63.6 59.3 per employee
Load Factor 59.2 57.8 o 120% more passengers per
employee
Passenger revenue
0.09 0.08 o 14% more available tonne-
(USD)/RPK
kms per pilot
Cargo revenue
0.37 0.31 o 40% more passenger-kms per
(USD)/RFTK
cabin attendant
Total revenue
0.79 0.73 o 35% more passenger-kms per
(USD)/RTK
passenger sales employee
Operating cost
0.45 0.42
(USD)/ATK It is difficult to make similar comparisons in the
technical and maintenance fields, but even in
these areas Delta has a substantially high
Revenue Cost productivity than SAS.
Relationship 103.5 99.7
(Over 100…
Average flight leg/km 1051 967
*USD – US Dollars RPK - Revenue Passanger-kilometres. RFTK – Revenue Flight Tonne-
kilometres. RTK – Revenue Tonne-kilometres. ATK – Available Tonne-kilometres.
Exchange rate: one USD = 485 Swedish krones.

10. This is what we have to do:
Right now, we look like this: Next year, we should look
at least this good:
Income $1.505 million Income $1.517 million
Expenses $1.517 million Expenses $1.505 million
____________________________ ____________________________
Deficit $ 12 million Profit $ 12 million
And in just a few years that profit
should be 120 million at least!
We’ll be in bad shape if we don’t make it.

11. After my first
few months
in the company,
I am convinced:
o we have the
will to work
o we want to
assume
responsibility
o we have the
know-how
Our new management-by-objective,
result-oriented organization will let
these forces loose.

12. The new organization won’t solve any
problems itself.
It is merely a prerequisite if we are
to work more efficiently.
The organization will open the vents
and let responsibility and authority
take off all over the company.
And liberate initiative and
determination. So we can all take off.

13. No more friction!
The new organization is designed to time and money from
get results. important business.
This requires efficiency. The repair job is
To eliminate friction. We have to starting now, and the
pitch in and do away with the kind of wheels will be ready to
work we no longer need. roll in September.
The kind that diverts our energy,

14. This is how we are going to do it!
We have to consolidate.
We have to be more efficient. We have to be market-oriented.

15. We are going to consolidate!
o With fewer aircraft types
o With a “cleaner” network
o With more profitable routes
This will help cut our costs.

16. We are going to be much more soon. It’s going to give everyone a
punctual. Everyone can help. chance to help us one of Eu-
“Operation Punctuality” is starting rope most punctual airlines.

17. We are going to zero in on the
business travel market.
o It’s big.
o It’s demanding.
o It’s where the money is.
Above all, we are going to
capture the business travel
market in Scandinavia – our
home market.
Half of it today is
in the hands of our
competitors.

18. Separate Cabin.
Improves seating comfort.
Enclosed hat racks.
Improved meal service.
Free beverage service.
More personal service from cabin
attendants (freed from collecting for
drinks).
New, more informative in-flight
announcement.
Improved newspaper service.
Tax-free sales always starting in
Business Class.

19. This is what we’re going to do for Business Class
Ticket Offices. Service Lounge at Kastrup
Special phone numbers. Telephone, telex services (debited).
High level service at ticket counters. Ticketing (Help with rebooking).
Office space.
Coffee shop.
SAS News Bulletin Board.
Wardrobe for winter clothes.
Message Service.
Embarkation
Economy Class passengers board first.
Check-in. Business Class passengers board last.
Simplified check-in for passengers Gate manager to assist passengers.
with carry-on baggage only.
Separate check-in counters for Debarkation
Business Class. Business Class first.
Seat selection.
High service level, shorter lines.
Quicker check-in procedures.
Special baggage racks.

20. Increased cargo revenue will beef up pleasure-travel revenues as well.
the bottom line. Cargo marketing We’ve got some attractive
will be more efficient as a result- proposals up our sleeves for the
oriented sector all its own. holiday market.
We are going to raise our

21. We are also out for better mar-
ginal business, like more profitable
charters…

22. When we put it all together…
o We are slashing unnecessary costs.
…that should do it.
o We are improving our efficiency.
o We are consolidating our opera-
tions and cutting even more costs.
o We are tailoring our products and
service for the needs of the big
business travel market, to
increase our income.
+2%
A 2% improvement means some
o We are boosting our profitability $30 million. With much in our
with cargo and tourism. pockets, we’ve taken the first step
towards a new, profitable SAS.
o We are grabbing every opportunity
for marginal business.
o We are going to find it’s
more fun to work.

23. We’ve got to help each other.
If anything goes wrong, the customer If we help each other, we can put just
doesn’t care whose fault it is. He’s about anything right and spare our
the one who’s going to suffer customers a lot of grief.
anyway. But we’ve got to work together!

24. Don’t wait. Start Now!
We’ve got a lot of projects and ideas in
the works. Some will start right away, and
others may take half a year to materialize.
Don’t wait. Make it happen, now!
o Sell SAS. Don’t miss a single chance.
o Bend over backwards for our passengers
at our stations.
o Help your colleagues. If you don’t have Bear in mind:
any personal contact with our custom- The only really valuable
ers, see that you help those who do. asset we have is a truly
o On board, give your utmost in service. satisfied customer.
Don’t let off a single unhappy pas-
sengers. Your friends on the ground will
back you up!
o Do whatever you can to load and un-
load baggage on time, so we can main-
tain our timetables.
o Plan maintenance and overhaul so our
aircraft will be ready to go on schedule.
o Start today!

25. We have to fight in a stagnating we are in figuring out the best
market. deals.
We have to fight competitors who We can do it. But only if we are
CLEANED, RETYPED AND CONVERTED TO PDF: KIRA KONONOVICH
are more efficient than we are. prepared to fight. Side by side.
And who are at least as good as We are all in this together.
Jan Carlzon