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UPDATE 1-SAS inks deal with Swissport in latest turnaround move
March 7, 2013 / 2:16 PM / 5 years ago

UPDATE 1-SAS inks deal with Swissport in latest turnaround move

* SAS to offload ground handling to Swissport

* Eventually to sell ground handling business

* SAS aims to cut costs, slim down

STOCKHOLM, March 7 (Reuters) - Troubled Scandinavian airline SAS took another step on Thursday in its long-term survival and cost cutting plan by agreeing to offload its ground handling business to Swissport.

SAS, half owned by the governments of Sweden, Norway and Denmark, in November agreed salary cuts and working arrangement changes with staff to reduce costs and take on cheaper rivals Ryanair and Norwegian.

The airline also intends to slim down, including by outsourcing and selling its ground handling business.

It said Swissport, which provides airport ground and cargo services around her world, would own 51 percent of a ground handling joint venture and take over operational and management control.

“SAS will successively transfer full ownership of the company to Swissport,” it added.

It said its ground handling business in Denmark, Sweden and Norway, which employs 5,000 staff, would be transferred to the new company. It gave no financial details.

SAS also wants to sell its Norwegian regional airline Wideroe.

SAS shares were down 2.4 percent on the news at 14.25 crowns but have risen from the 5 crowns level they were trading at last November. The broad Stockholm index was up 0.1 percent by 1346 GMT.

Swissport, owned by private equity company PAI partners, said on its website that it has around 40,000 staff and is active at 192 airports in 38 countries on five continents.

SAS is to report first quarter earnings on Friday covering the period November to January after changing its financial year. It said in December that it expected to make a full-year 2012/2013 profit.

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