airborn

SK is loosing 160MSEK every day the volcano is active. With their existing budget we are talking about 2-3 weeks before they are bankrupt. In worst case the volcano activity can go on for years (and even wake up the even bigger sister volcano).

So being a bit pessimistic, I am doing damage control in case SK does go bankrupt:

I have 4 IC SK flight throughout the year, but fortunately I have bough a seperate year long insurance for bankruptcy as well as paid with credit card so I guess my money is secured.

My wife and I do, however have about 550.000 EB points that I need to transfer to another reliable airline. My thought is to call EB on monday and buy Star alliance award tickets on TG, SQ.

If things go bad, I still have my tickets. If everything solves, then I could cancel these flight and get my points back.

Any thoughts on this?

BHIL

The Scandinavian governments will never let SAS go bankrupt on a background like this. Same goes for the other countries and their major airlines. This is a very special situation where the economic stability of the whole EU region is at stake if this goes on for weeks.

bowman

The owners of SAS are unaware of the notion of sunk cost and will pour money indefintly into SAS in order to try to recoup their previous losses. Since the major owners have the ability to tax - they have very deep pockets.

The Swedish Minister of Transportation previously (before the latets cash infusion) said that she believed it would be a bad deal for the government if they sold their shares - since she though SAS had a great future.

jth

Quite intreesting that we have yet to hear her make any public statements regarding the latest developments. Guess she is sitting tight in her house up in the west botnia forests

GUWonder

I just don't see the European governments letting their national flag carriers go under right now due to circumstances like this. Either way, this will leave the carriers in even more economically strained conditions than they already are even as I am expecting that air fares are going to be jacked up for flights whenever airspace opens up to basically normal conditions.

another_shot

Saving national airlines? How about Norwegian, Wideroe, Malmo Aviation, Nextjet, Skyways, Blue1, Finncomm?

Someone83

It's a lot less. If all traffic stands, SAS is loosing around 120SEK daily in revenues. However they net losses is a lot less and they don't have to spend any money on fuel, maintenance and airport taxes.

They still have to pay their employees though, but at least in Norway, all their ground crews that are not needed will be put on temporary leave from Monday and the rest, inc. flying staff, will be placed on leave from Wednesday. That means that they won't have to pay around 6.000 employees any salaries from that they.

Don't know about the situation and labour laws in DK and SE?

RB_STHLM

Well, apart from maybe Norwegian these are not real National airlines so there is a huge difference.

Fredrik74

Unless the routes themselves are profitable it's less damaging to SAS finances to ground planes. That said, this can't go on for too long.

ramo

If SK really goes bankrupt, I doubt their award tickets are worth even the paper they are printed on. TG and SQ are not charities, and I don't think they are honouring award tickets, if nobody is paying for them.

neko

I think you may be overreacting.

I don't think the national and EU governments will (or should) let this situation push any reasonable-sized airlines (state-owned or otherwise) directly into bankruptcy.

Pretty much all European airlines have been seriously affected and I don't think the authorities will want to see a sudden surge of airline failures that would de-stabilize the industry, especially when it is precipitated by something so far out of anyone's control.

I'm not necessarily optimistic about SK's long term prospects, but so far this hasn't really affected my opinion.

airborn

doesn´t the partner arlines get paid at the time of reservation and ticketing (when points are deducted from my account?). I think this is the case and if so, I doubt that they will not honor a flight that I have a confirmed reservation on with their carrier.

I truly hope that all of you are right about the govenment/EU stepping in and saving the airlines. At this stage I rather overreact and have my points secured in tickets with asian carriers, rather than underreact and see my half a million points vanish in the air..

another_shot

Huge difference is exactly where? (By the way there is no definition of national airline).

Tell me any single reason, why SAS should be saved, and Wideroe or Nextjet not?

GUWonder

You may want to revise your thinking on this matter.

Generally operating carriers get paid from money collected by the ticketing carrier after the ticket coupon is used (i.e., flight flown) and processed by the ticket clearing/settlement entity.

GUWonder

Good reasons or not, it's about the likelihood of what will happen. The chances of the Scandinavian governments helping bail out Wideroe or Nextjet are less than the chances of these same governments helping bail out SAS -- something to do with government investors often preferring to protect their government investments or preferring to bailing out big players rather than small ones.