Scandinavian airline SAS on Tuesday announced a major cost cutting plan, as the ailing carrier faced further heavy losses.

Under the new plan the company will reduce costs by 7.5 billion Swedish kronor (€710 million) annually.

“Absent fundamental change”, the current situation in the airline sector, which is plagued by the economic fallout of the pandemic, “will quickly exhaust SAS’ cash resources,” the carrier said in a statement. The “full transformation” of the business will affect “its network, fleet, labour agreements and other cost structures,” the company said.

Called “SAS Forward”, it will notably result in a “redesigned fleet” which included a “refocusing” on long-haul flights, the company said. 

SAS, which already cut 40 per cent of its workforce, 5,000 staff, in 2020, did not mention new job cuts.

SAS, which already cut 40% of its workforce, 5,000 staff, in 2020, did not mention new job cuts

The group did not specify when it expected to achieve the 7.5 billion Swedish kronor annual reduction in its costs.

Last year, SAS widened its losses after an already disastrous 2020, with a net loss of just over 2.4 billion kroner, with rebounded turnover of about 5.5 billion. 

At the current price of SAS shares, the company is only worth about €800 million.

SAS has benefited from several aid and recapitalisation plans since the start of the pandemic, mainly funded by Sweden and Denmark, which each own 21.8 per cent of the company.