SAS battling demand and capacity challenges

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The imbalance between demand and capacity is proving troublesome for Scandinavian Airlines (SAS) Cargo, which joins other carriers across the globe facing the same challenge.

SAS Cargo Group president and chief executive officer, Leif Rasmussen, tells Air Cargo Week that this issue is proving to be the biggest headache for the airline right now.

“Capacity is growing more than demand and consequently negatively affecting yields. Other challenges are the increasing costs related to the different parties controlling parts of the value chain and the lack of digital innovation within the industry,” he says.

Rasmussen explains that, generally, SAS Cargo is performing well; however, general market conditions are impacting results in comparison to expectations.

“The strongest region is the Nordic one, but we see growth in almost all regions in terms of tonnages. We see some lanes above average growth and others performing just average. Market trends are generally weak,” he explains.

Demand for cargo caapcity has been inconsistent, Rasmussen says, and he notes that SAS Cargo is finding there are big differences depending on country, region and seasonality.

“In general we are focusing on pharmaceuticals and other high yield products. From some countries we are transporting textiles, perishables and from others computers, furs, etc – and of course it depends on seasonality,” he adds.

Route development is also on the agenda for SAS Cargo, which has added a bellyhold service from Stockholm to Hong Kong, and will soon sell capacity on flights from Stockholm to Los Angeles (US), as well as from Copenhagen and Oslo to Miami (US).