SCANDINAVIAN AVIATION

Scandinavian aviation has problems. A week or so ago cabin personnel went on strike at SAS. The strike was illegal, something which the courts duly confirmed. But it still took a couple of days for talks to break down, writs to be issued, opinions to be drafted and so on. And every day that an international airline doesn't fly means a big loss of revenue and an even bigger load of disgruntled passengers.

Then it was the turn of Norwegian, the low-cost carrier that is doing to Scandinavia what Ryanair has done to the rest of Europe. This time it was the pilots, and the strike went on for longer. The only people happy about the new development were SAS; with many routes within Scandinavia a duopoly, SAS were able to recoup the revenue that they had lost the week before.

In both cases, the fundamental issue was the same. In what is increasingly becoming a global industry, can Scandinavian airlines continue to pay Scandinavian wages and benefits when the competition is paying much less? Transport businesses are essentially fixed cost, so if your costs are higher, then you are less competitive. True, the Gulf carriers (and Chinese airlines) don't - yet - want to fly around Scandinavia. But SAS and Norwegian can't survive as regional players, and on the long-haul routes which are more profitable, they compete head-on.

The result of the two strikes was that the Scandinavian labour model in the aviation industry has survived for now. However, I am not convinced that it will survive much beyond 2020.

Walter Blotscher