[ eng ] Let's get in there and fight! by Jan Carlzon (SAS)
We were healthy, profitable com- pretty match agreed on how wepany 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.
Who was to know there were storm clouds beyond the horizon?
NEW AIRLINES SHARPEN INCREASED FUEL RISING HIGH NORTH ATLANTIC COSTS PRICES COMPETITION PRICES DWINDLING DEMAND NEW PRICE FLAG CAREERS WARSFIND THEIR OWN WINGS AIRLINE DEFICITSSuddenly, bad weather stuck…
We are in bad shape. But we haven’treached the crisis point yet.If we were, we wouldn’t know howto get our nose up again. But we can. If we are ready to fight for our jobs and our future, we can recover.
It won’t be easy. from our comfortable days under We are bearing a lot of IATA’s protection. Now we have tounnecessary costs originating trim the fat.
We’ve got some tough competition. domestic market. Efficient. In shape.Like the “street fighters” from the Like Delta…rough-and-tumble American
Our European companies which have And who keep making money, hardpursued more consistent and times or not.purposeful policies than we have.
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.
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 millionExpenses $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.
After my firstfew monthsin the company,I am convinced:o we have the will to worko we want to assume responsibilityo we have the know-how Our new management-by-objective, result-oriented organization will let these forces loose.
The new organization won’t solve anyproblems itself. It is merely a prerequisite if we areto 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.
No more friction!The new organization is designed to time and money fromget results. important business. This requires efficiency. The repair job is To eliminate friction. We have to starting now, and thepitch in and do away with the kind of wheels will be ready towork we no longer need. roll in September. The kind that diverts our energy,
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.
We are going to consolidate!o With fewer aircraft typeso With a “cleaner” networko With more profitable routesThis will help cut our costs.
We are going to be much more soon. It’s going to give everyone apunctual. Everyone can help. chance to help us one of Eu- “Operation Punctuality” is starting rope most punctual airlines.
We are going to zero in on thebusiness travel market.o It’s big.o It’s demanding.o It’s where the money is.Above all, we are going tocapture the business travelmarket in Scandinavia – ourhome market.Half of it today isin the hands of ourcompetitors.
Separate Cabin.Improves seating comfort.Enclosed hat racks.Improved meal service.Free beverage service.More personal service from cabinattendants (freed from collecting fordrinks).New, more informative in-flightannouncement.Improved newspaper service.Tax-free sales always starting inBusiness Class.
This is what we’re going to do for Business ClassTicket Offices. Service Lounge at KastrupSpecial 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 DebarkationBusiness Class. Business Class first.Seat selection.High service level, shorter lines.Quicker check-in procedures.Special baggage racks.
Increased cargo revenue will beef up pleasure-travel revenues as well.the bottom line. Cargo marketing We’ve got some attractivewill be more efficient as a result- proposals up our sleeves for theoriented sector all its own. holiday market. We are going to raise our
We are also out for better mar-ginal business, like more profitablecharters…
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 someo 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.
We’ve got to help each other.If anything goes wrong, the customer If we help each other, we can put justdoesn’t care whose fault it is. He’s about anything right and spare ourthe one who’s going to suffer customers a lot of grief.anyway. But we’ve got to work together!
Don’t wait. Start Now!We’ve got a lot of projects and ideas inthe works. Some will start right away, andothers 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 trulyo 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!
We have to fight in a stagnating we are in figuring out the bestmarket. deals. We have to fight competitors who We can do it. But only if we are CLEANED, RETYPED AND CONVERTED TO PDF: KIRA KONONOVICHare 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