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Background of Scandinavian Airlines System SAS Scandinavian Airlines System SAS began in 1946 from the merger of the Danish airline DLL Norwegian airline DNL and the Swedish airlineABA to operate overseas services for Sweden Norway and Denmark Company mission Offer competitive air connection within between to and from each of the three Scandinavian countries Sweden Norway and Denmark partly using its own aircraft and partly together with selected partners Critical issues facing up until 1981 1Highest operating costs in the industry compared with US carrier and Asian airlines 2Distribution system still not competitive 3Not sufficient traffic system which were not meet customers needs 4International recession higher interest rates and fuel costs 5Overcapacity and less regulated competition 6Reputation going in declined stage both service and punctuality eg 5 down on on-time performance 90 to 85 which indicate a major drop by airline standards 7Kastrup airport became less attractive for traveller due to old fashion terminals compared to Amsterdam Frankfurt or Zurich 8Moving toward product driven rather than service-driven one 9Misused of the right services to custiomers by obtained unsuitable type of airplane 10Change of services style which become customer oriented in term of travel plan SWOT analysis Strength 1Brand name and SAS logo is recognised in Europe 2Gained a strong foothold in European market 3Worldwide Route network 4Close relationships with other airlines Swiss Air and KLM after forming KSSU agreement 5Formed under tri-national airline 6Large traffic base 7Member of EEC 8Cooperative with other airline outside Europe eg Thai Airways International 9Up-to-date aircraft Weaknesses 1Highest operating cost 2Not fully competitive distribution system 3Geographic location 4Considerable losses in profit since 1979 5Kastkrub airport became less attractive 6Reputation for service and punctuality had deteriorated 75 drop of on-line performance 8Fleet mix and route network did not meet market needs 9Moving in the wrong direction product driven instead of service driven 10Continuing loss of market
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