In 2001 a single listed share was introduced through the establishment
of SAS AB, the new holding company of the SAS Group. In 2002 the SAS
Group introduced a clearer business structure with
five individual business areas. The structure is based on the concept of
decentralization, responsibility for earnings and transparency. The SAS
Group’s experience from the creation of SAS AB and the business
structure has been clearly positive from most perspectives.
However, the SAS Group legal structure has so far not fully reflected
the business structure. To improve conditions for profitable and
competitive growth the SAS Group has initiated a process to harmonize
the legal structure with the business structure through various steps,
beginning with the transfer of employees in Corporate Functions from the
SAS Consortium to SAS AB in November 2003, and continuing by the
transfer of a number of subsidiaries of the SAS Consortium to SAS AB, on
market terms, in December 2003, which is described in the Year End

As a natural step in this process, SAS AB has issued an irrevocable
undertaking to guarantee the interest bearing liabilities, leasing
obligations and other financial obligations of the SAS Consortium, as of
December 31, 2003.

Furthermore, the SAS AB board of directors has mandated the Group
Management to initiate a process for the transfer of the SAS Ground
Services, SAS Technical Services and SAS Trading business units of the
SAS Consortium into separate subsidiaries of SAS AB, and also to further
evaluate the future structure of Scandinavian Airlines.

The SAS legal structure as of December 2003, as well as the executed
“Irrevocable Undertaking” of SAS AB, can be downloaded from the SAS
Group’s homepage under Financial reports/ Presentation