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SGS best result ever 2004
SGS result for 2004 was MSEK 279, SGS best result ever. All SGS regions have contributed to the positive development, which is MSEK 352 better than plan. The positive result is due to volumes and products, activities transferred from SAS Technical Services as well as some major one-off financial effects.
SGS revenue increased to MSEK 6 211, which is 11 percent better than 2003. The unit cost continues to decrease in all SGS regions: by 9 percent during the last two years. Productivity is also better than planned.
The volume of weighted landings was at 545,343 slightly over budget.
Full Time Employees were 7,028, which is 179 less than plan.
Price pressure on the market
The ground handling market has been under severe price pressure during 2004. A trend is appearing where airline alliances choose a common ground handler.
All agreements with SK/BU were handled regionally within SGS, with support from the central KAM organization. In connection with the negotiations it was established that the three Scandinavian SGS companies should establish joint projects with SK/BU to identify savings that can give SK lower prices. A first phase of these projects shall be ready during the first quarter of 2005.
Many customer contracts were renegotiated during the year. There were also a number of new customer airlines, of which the larger contracts were with Pakistan Airlines in Manchester and with Virgin Atlantic for CDC services in Bangkok.
A hectic 2004
In the beginning of 2004 a number of tasks within aircraft servicing were transferred to SGS from SAS Technical Services, including staff, equipment and customer contracts.
SGS established own ramp handling in Helsinki August 25.
SAS Ground Equipment was transferred to SGS from SAS Technical Services July 1. In connection with the incorporation October 1, SGE was formed into regional companies in Scandinavia, with the Danish one as holding company.
SGS was legally made into a Group within the SAS Group October 1. By the end of the year it contained SAS Ground Services AB as a holding company and eight subsidiaries: SGS Denmark AS, SGS Norway A/S, SGS Sweden AB, SGS Finland Oy, SGS UK Lt and the three SAS Ground Equipment companies.
IS/IT issues
PACS is SGS' common system for check-in. Due to instability, the introduction of the system caused operational disruptions, but by the end of the year these were eliminated considerably.
A revision was made of SGS IS/IT cost. A savings potential of MSEK 116 was identified, and more than half of it was achieved 2004. The rest will be achieved 2005.
Outlook for 2005
Since the airline market struggles, the demand for lower prices will continue in 2005.
MSEK 296 remains to be achieved in Turnaround 2005, in part together with the Scandinavian Airlines/Braathens companies through LCC+ projects.
In 2005, SGS is expected to make at least a 2004 financial "repeat performance".
If you have any questions concerning the information above, please do not hesitate to contact Ann Billberg <mailto:Ann.Billberg-Jonsson@sas.se>.
COPYRIGHT © 2002 Scandinavian Airlines System.
Created by Elaine Boivie
Published by Elaine Boivie
Last updated 2005-02-11
SGS result for 2004 was MSEK 279, SGS best result ever. All SGS regions have contributed to the positive development, which is MSEK 352 better than plan. The positive result is due to volumes and products, activities transferred from SAS Technical Services as well as some major one-off financial effects.
SGS revenue increased to MSEK 6 211, which is 11 percent better than 2003. The unit cost continues to decrease in all SGS regions: by 9 percent during the last two years. Productivity is also better than planned.
The volume of weighted landings was at 545,343 slightly over budget.
Full Time Employees were 7,028, which is 179 less than plan.
Price pressure on the market
The ground handling market has been under severe price pressure during 2004. A trend is appearing where airline alliances choose a common ground handler.
All agreements with SK/BU were handled regionally within SGS, with support from the central KAM organization. In connection with the negotiations it was established that the three Scandinavian SGS companies should establish joint projects with SK/BU to identify savings that can give SK lower prices. A first phase of these projects shall be ready during the first quarter of 2005.
Many customer contracts were renegotiated during the year. There were also a number of new customer airlines, of which the larger contracts were with Pakistan Airlines in Manchester and with Virgin Atlantic for CDC services in Bangkok.
A hectic 2004
In the beginning of 2004 a number of tasks within aircraft servicing were transferred to SGS from SAS Technical Services, including staff, equipment and customer contracts.
SGS established own ramp handling in Helsinki August 25.
SAS Ground Equipment was transferred to SGS from SAS Technical Services July 1. In connection with the incorporation October 1, SGE was formed into regional companies in Scandinavia, with the Danish one as holding company.
SGS was legally made into a Group within the SAS Group October 1. By the end of the year it contained SAS Ground Services AB as a holding company and eight subsidiaries: SGS Denmark AS, SGS Norway A/S, SGS Sweden AB, SGS Finland Oy, SGS UK Lt and the three SAS Ground Equipment companies.
IS/IT issues
PACS is SGS' common system for check-in. Due to instability, the introduction of the system caused operational disruptions, but by the end of the year these were eliminated considerably.
A revision was made of SGS IS/IT cost. A savings potential of MSEK 116 was identified, and more than half of it was achieved 2004. The rest will be achieved 2005.
Outlook for 2005
Since the airline market struggles, the demand for lower prices will continue in 2005.
MSEK 296 remains to be achieved in Turnaround 2005, in part together with the Scandinavian Airlines/Braathens companies through LCC+ projects.
In 2005, SGS is expected to make at least a 2004 financial "repeat performance".
If you have any questions concerning the information above, please do not hesitate to contact Ann Billberg <mailto:Ann.Billberg-Jonsson@sas.se>.
COPYRIGHT © 2002 Scandinavian Airlines System.
Created by Elaine Boivie
Published by Elaine Boivie
Last updated 2005-02-11
