Professor Siri Pettersen Strandenes at NHH says that airlines have no choice but to engage in a constant costs in order to keep the company in the air .
Norwegian conflict with pilots assumes that the company will cut their costs. Strandenes has a number of years followed Norwegian and international aviation close.
– Kjos can not sleep in class, otherwise harbors company quickly in trouble. Whoever needs a picture of how it may turn out, you look at what happened with large and important international companies like Nokia and Kodak. Nokia was the leader in mobile telephony, until Apple came with your smartphone. Now Finns almost gone. Kodak would not adopt digital technology early enough, therefore disappeared their market position. The same could soon happen to English if it does not provide for developing both technologically and economically, says Strandenes.
Competitors can get ahead
She also recalls that English has become a major player in European aviation and have established bases in a number of countries around Europe.
– They are in a tough international competition, and must cut costs all the time because it makes the competition too. SAS is a good example of this process is not something you are doing sometimes, but all the time – otherwise you will quickly discover that the competitors will have a head start, says Strandenes.
Therefore, she believes it is vital that airlines are looking with light and magnifier for new places to save money.
– The company has been the highly skilled to stay ahead with high productivity and efficient operation. If it should continue to have this beneficial basically the company must also make sure to keep costs in check and then see eg the cost of pilots, says Strandenes.
Many companies are experiencing strike
Associate and aviation expert Espen Andersen at BI notes that airlines face tougher competition on at least two fronts:
The major European network companies like Lufthansa, KLM, Air France and Iberia have all formed their own subsidiaries with employees on favorable terms than in the parent companies. Therefore there has also been many strikes in these companies, because employees have objected to lose wages.
Besides fighting airlines against other cheap companies like Ryanair and EasyJet, as they meet on all fronts in Europe.
SAS in with lower wages
Also, SAS is in a similar process. The company has acquired a bankrupt Danish company, Cimber, who will fly SAS routes with weak traffic base. In this company tries SAS hiring people on lower wages than elsewhere in the company. The result has been fierce strikes and numerous cancellations.
– There is a parallel to what is happening in English. Here said Chairman Bjorn Kise as late as Monday that the company relies on to grow to survive. I think he’s right, and therefore the company can not live with having employees who are so relatively costly as in Scandinavia. It would be “game over” for Kjos, says Andersen.
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