The chief executive of Scandinavian carrier SAS said the airline industry will see really challenging times this year and next due to high oil prices and overcapacity problems.
"There will be short-term rescue actions, drastic measures," SAS chief executive Mats Jansson told Norwegian daily Dagens Naeringsliv about the airline industry as a whole.
He said a "deadly cocktail" of factors were combining to weaken the airline industry. "This is worse than after 9/11, worse than during the oil crisis of the 1970s," he said.
"There is no direct bankruptcy threat to SAS anymore, but measures must be taken," he said, adding that trade unions were beginning to understand the seriousness of the situation.
SAS, which had a net loss of SEK973 million kroner (USD$162 million) in the first quarter, has embarked on a strategy to cut costs and boost profits, including grounding 11 aircraft in 2008.
"The fleet must be renewed over time. A result of seven percent of sales is needed for us to manage the necessary investments and secure our future independence," Jansson said.
He said airlines which had ordered more planes during the industry's upswing several years ago and were only receiving them now, were living dangerously.
"Most of the low cost airlines have not hedged against higher oil prices. (This is) a serious problem, a complete catastrophe," he said without specifying SAS's hedging strategy.
