SAS to cut at least 3,000 jobs, raise capital

Special Report:Global Financial Crisis

STOCKHOLM, Feb.3 (Chinese media) -- Scandinavian Airlines System (SAS) on Tuesday

announced plans to cut at least 3,000 jobs and seek a six-billion-kronor (about

718.5 million U.S. dollars) capital increase.

"The airline is launching a Core SAS program of reorganizations which would

be supported by a new rights issue, supported by SAS's three government owners

and the airline's largest private shareholder, the Wallenberg Foundations," Mats

Jansson, CEO of SAS Group, said in a statement.

He added that J.P. Morgan, Nordea and SEB have also confirmed their

intention to participate in the deal.

"The reorganization will affect about 9,000 employees, including 3,000

outright redundancies," Jansson said. "An additional 5,600 positions are

expected to be eliminated through outsourcing or divestment, including 3,000

employees who left SAS when it sold Spanair on Friday."

Jansson said the plan would help streamline operations and save four

billion kronor (about 479 million U.S. dollars) between 2009 and 2011.

According to a 2008 year-end report also announced Tuesday, the

Stockholm-based company posted net losses of 6.32 billion kronor (about 757

million U.S. dollars) last year, after a profit of 636 million kronor (about

76.2 million U.S. dollars) in 2007. The group suffered a net loss of 2.77

billion kronor (about 331 million U.S. dollars) in the fourth quarter of 2008.

"Revenue of the fourth quarter dipped by nearly 100 million kronor to 12.9

billion compared to the same quarter in 2007," the statement said.

SAS, which is 50 percent owned by the governments of Sweden, Denmark and

Norway, has been hit by a series of problems such as weak profitability and

competition from budget airlines in recent years.