Business | Aviation
Copenhagen-Dubai service expected to bolster SAS's financial recovery
Scandinavian Airlines' new service between Copenhagen and Dubai will help strengthen the carrier's economic recovery following years of post-9/11 losses, officials said.
- By Ivan Gale, Staff Reporter
- Published: 23:51 October 3, 2007
Dubai: Scandinavian Airlines' new service between Copenhagen and Dubai will help strengthen the carrier's economic recovery following years of post-9/11 losses, officials said.
SAS is returning to the Gulf after more than a 10-year absence with its inaugural flight to Dubai on November 1. It will fly three times a week during an initial four-month winter season.
The airline's UAE manager said there was great potential in rekindling its ties with the booming Gulf region, especially Dubai, where the aviation industry has experienced years of double-digit growth.
"We see Dubai as a very up-and-coming market," said Magnus Engstrom, the airline's UAE general manager. "There has been a big increase in traffic from Scandinavian countries in the last four to five years."
SAS suffered five years of negative earnings from 2002 to 2006, a fate shared by many airlines as air travel plummeted following the events of 9/11. After years of restructuring, SAS produced a profit of 500 million Swedish crowns ($77 million) for the first half of 2007, Engstrom said. Long before 9/11, though, SAS had suspended its service to the Gulf. Until the early 1990s, SAS flew regularly to the Gulf. But then route profitability issues forced it to halt its Jeddah, Riyadh and Kuwait flights.
With the new Dubai flights, SAS is expecting strong demand from leisure travellers, but also hopes business travel will pick up as Scandinavian businesses make inroads into Gulf economies.
"They're growing, and we think this can contribute to our route," Eng-strom said.
Operating a 245-seat Airbus A340, the airline is aiming for an 80 per cent load factor or roughly 4,700 passengers carried per month with its thrice-weekly service.
Soon after it begins the Dubai service - SAS' ninth intercontinental destination - it will face off against Qatar Airways, which launches direct service from Doha to Stockholm four times a week from November 30.
Asked whether SAS was late in addressing the Gulf aviation market, Engstrom replied, "For us, it's just the right point. We now have the capacity."
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