SAS's Loss-Making Unit Blue1 Cuts Routes

June 17, 2011

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SAS Scandinavian Airlines on Friday said its loss-making Finnish unit Blue1 will phase out five aircraft earlier than expected, close routes and cut jobs due to falling ticket prices and fierce competition.

Helsinki-based Blue1 will close its routes to London, Paris, Amsterdam, Berlin, Munich and Tallinn, and focus on Nordic flights with its Boeing 717 planes, Blue1 spokesman Tom Christides said.

"The passengers are back, but prices have come down permanently in this business. Our competition has changed dramatically, and fuel prices have risen," Christides said.

Blue1 faces increased competition in Finland from budget airlines such as Norwegian and airBaltic.

The phasing out of the fleet of five small Avro planes, now expected to finish about two years ahead of the original schedule, means Blue1 is looking to cut 85 jobs.

(Reuters)