SAS proposes structural changes in home markets - could establish a
joint company in Norway
As part of the “Turnaround 2005” program of change and work to create
the necessary competitiveness, the SAS Group is evaluating various
production structures for its airlines in the three Scandinavian
countries.

In the Danish, Norwegian and Swedish markets, operations must undergo
significant changes to form a competitive low-cost platform. In Denmark
and Sweden the changes will be carried out within the framework of the
organizations existing in each country, but in such a manner that both
the low-price and full-service segments can be served efficiently.
Structural and market conditions demand more extensive changes in
Norway. Wideröe is not included in the proposed changes.

Group management in SAS will present to the Board of Directors a
proposal for a new structure for the operations in Norway. The trade
unions in Braathens and Scandinavian Airlines were informed about the
proposal today. The proposed realignment of jet aircraft operations in
Norway will create a cost level that provides the increased
competitiveness required in the market.

Group management considers that the best business solution is to
integrate the entire organization of Braathans and Scandinavian Airlines
in Norway into a joint company that will serve the Norwegian market in a
competitive manner. Such a company could mean that all operations are
gathered either into one of the existing companies or into a new
company. The solution is conditional upon efficiency enhancement efforts
and that new agreements are reached with employees on reduced salaries
and work terms to create the necessary profitability and
competitiveness. An integration with these conditions fulfilled will
then be carried out through a transfer of operations, with the rights
this entails for the affected employees. The managements of Braathans
and Scandinavian Airlines will continue discussions and negotiations in
the future with the trade unions.

Many questions of a business and operative nature remain and these must
be resolved before Group management presents its proposal, as planned,
for SAS`s Board for final decision in March. The proposed changes will
ensure the SAS Group`s ability to compete in all segments of the market,
in terms of price and products, which as planned will be offered to
customers as of May this year.

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