SAS May Slash Overseas Routes - Report

SAS could scale back overseas flights if the Scandinavian airline is unable to persuade unions to cut costs or enter a joint venture, its chief executive said in a newspaper interview on Friday.

CEO Mats Jansson told Danish daily Borsen the loss-making airline hoped to keep its overseas network intact but that costs had to be brought in line with those of competitors.

"Regarding SAS' international operations, such a huge loss on such a small part of the (entire) business is unacceptable," Jansson was quoted as saying.

Intercontinental flights, most of which are on routes from Scandinavia to the United States, make up 13 percent of group sales but generated a loss of SEK500 million Swedish kronor (USD$65.51 million) in the first quarter, equal to half the group's net loss.

"If we can't fix this, speculation will begin. A close-down will be costly, around SEK1 billion - SEK2 billion ... In between comes a joint venture with another company," Jansson was quoted as saying.

Finnish airliner Finnair has said it wanted to buy SAS overseas operations in September last year. Borsen said the move was vetoed by SAS' Star Alliance partner Lufthansa as Finnair is a member of the competing oneworld alliance.