August 21, 2008

Troubled Year of Pilot Strike Threat and Job Losses

By Lindsay McIntosh

SPANAIR, the airline which operated the plane that crashed in Madrid, has had a difficult year.

Just hours before the accident, its pilots threatened to go on strike, while its parent company, Scandinavian Airlines Systems (SAS), has been trying to sell the subsidiary since last year.

SAS has been struggling with high fuel prices and tough competition during the economic slowdown. It is laying off 1,062 staff and cutting routes to turn the airline around after losing about GBP 44 million in the first half of the year. Spanair announced separately that it will cut 1,000 jobs and ground 15 aircraft.

This summer, SAS admitted it could not get rid of Spanair for the price it wanted, "due to the challenging market conditions in the Spanish aviation market coupled with record oil prices and pressure in the financial sector".

Mats Jansson, the chief executive of SAS, said at the time: "Spanair is a company with a competitive cost position and is the second-largest carrier in the large Spanish market. We have done a very thorough evaluation and have concluded that we will abandon the current sales process and continue as a shareholder."

Spanair is based in Palma de Mallorca. It provides scheduled passenger flights within Europe, with an extension to west Africa. Its main hubs are Barajas international airport and El Prat international airport.

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