Q&A with SAS CEO Rickard Gustafson

SAS CEO Rickard Gustafson chats with crew in the galley. (Photo: SAS)

SAS CEO Rickard Gustafson chats with crew in the galley. (Photo: SAS)

Last week SAS inaugurated flights to San Francisco International Airport  from its main hub in Copenhagen.  A large Scandinavian contingent included SAS CEO Rickard Gustafson, who agreed to a lively Q&A with The Bay Area Traveler-TravelSkills!

Our warm spring weather was a big hit for the shivering Scandos, who have endured a longer-and-colder-than-normal winter. SFO welcomed the first SAS A340 with a water cannon salute on a bright warm Monday afternoon.

There was also an elegant dinner at the Asian Art Museum where former San Francisco mayor Willie Brown offered his frisky and fun perspective to a crowd of consular and international business types. Word at the dinner was that the active Gustafson (with his  teenage kids in tow) took several sweaty morning runs to soak up the sun and scenery.

TravelSkills: Why did SAS decide to come to San Francisco? What is it about our city that drew you here? 

Gustafson: SAS has for almost two years experienced increasing interest from our clients towards this destination. Thus, opening this route is obviously a response to the demand from our customers. Then, taking a closer look at the city and the possibilities of the region, we realized that this was a good opportunity to return to the West Coast. [SAS had previously flown to Seattle and Los Angeles, but no more.] When you look at topics like innovation, ambience and the spirit of this large – and somewhat small at the same time – West Coast city it’s clear that San Francisco has plenty to offer.

TravelSkills: Why should a business traveler from San Francisco choose SAS over United or Lufthansa when traveling to Europe– all are Star Alliance, so what’s the difference? 

Gustafson: There are many good reasons for flying with SAS. We offer a convenient and time saving solution with good connections in our Copenhagen hub. [SAS departs SFO at 5:35pm and arrives in Copenhagen-CPH at 1:15pm. At around 2-3 pm, a large bank of SAS flights departs CPH for major cities in Northern Europe] SAS is renowned for our high service level and also the authentic Scandinavian product and experience on board.

TravelSkills: Why did SAS choose SFO over the other gateways (like LAX or SEA)? Because it’s a big hub for Star Alliance partner United? Were incentives involved?

Gustafson: We chose SFO primarily due to good connections with United. Then it turns out that we have a really good time slot at SFO which makes both transfer and customs extremely smooth compared to what our customers can experience in other US airports. Avoiding two-hour lines in immigration is definitely a good selling point. Regarding incentives. SFO offered SAS the normal incentives such as marketing support and reduced landing fees.

Copenhagen Airport has gorgeous, functional stained wood flooring throughout. Nice! (Photo: Chris McGinnis)

Copenhagen Airport has gorgeous, functional stained wood flooring throughout. Nice! (Photo: Chris McGinnis)

TravelSkills: How is Copenhagen as a connecting hub? 

Gustafson: The airport offers fantastic connection times and close proximity from intercontinental gates to European gates. Furthermore, SAS has many connecting routes out of Copenhagen to Scandinavia and Europe making it seamless and easy for the traveler.

In business class, SAS offers an "angled lie flat" seat. (Photo: Chris McGinnis)

In business class, SAS offers an “angled lie flat” seat. (Photo: Chris McGinnis)

TravelSkills: SAS currently has “angled lie flat” business class seats compared to other airlines like United with true lie-flat seats– are there any plans to change this? 

Gustafson: We are looking at new solutions for upgrading our cabin on long haul, but we can’t be more specific than that.

SAS economy extra offers larger coach seats with more legroom (Photo: SAS)

SAS economy extra offers larger coach seats with more legroom (Photo: SAS)

TravelSkills: Does SAS offer a premium economy product? How is that? How does it compare to business… and to regular economy? 

Gustafson: Yes on long haul we have economy extra, which will be renamed SAS Plus starting this June, where are changing our service concept completely on short haul flights. As a matter of fact our premium economy product was awarded as the best in 2012. On long haul we’ll rename our premium economy and regular economy to SAS Plus and SAS Go. With SAS Plus we offer better seats and legroom, an upgraded service concept and two meal servings. Passengers get access to SAS lounges and fast track immigration lines. In SAS Go we also offer two meal servings, free luggage and all our online check-in services. We say that SAS Go is for those who want much, and Plus is for those who want even more. [SAS adds that there are three meal services on longer hauls, such as CPH-SFO]

During business class meal service, flight attendants done chef uniforms, which adds to the flight's "hygge" (Photo: Chris McGinnis)

During business class meal service, flight attendants don chef uniforms, which adds to the flight’s “hygge” (Photo: Chris McGinnis)

TravelSkills: What is inflight service like in business class on SAS? How does it differ from what a traveler would get on a US carrier? Is it Scandinavian-style service? What does that mean? 

Gustafson: Obviously, it’s an experience that one needs to acquire personally. We offer individual service with a warm, friendly and charming Scandinavian atmosphere. We serve modern Scandinavian food and our staff act sincere and true in their relation with the travelers onboard. [See “hygge” below]

TravelSkills: Is SAS owned or supported by Scandinavian governments? How does that work? 

Gustafson: SAS is listed on Stockholm, Oslo and Copenhagen stock exchanges. The Swedish government owns 24% of shares, the Danish government owns 14%, the Norwegians own 14%, and 7% is owned by the Knut och Alice Wallenberg Stiftelse Foundation. The other 41% is on the open market.

TravelSkills: If I have a three-day business trip to Copenhagen with a little free time on my hands, what are the TWO things I must do when I’m there? 

Gustafson: Experience the concept of Danish “hygge” (means have a good and cozy time) by visiting different town parts: Nyhavn, Tivoli, the Carlsberg grounds as well as parks and places around the town. And going to Copenhagen you must try many different restaurants – the city is known for premium food (new Nordic cuisine) with the world’s best restaurant Noma and several Michelin restaurants.

Chris McGinnis

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Comments

  1. Bernice Zhang says:

    Dear Rickard(CEO):
    I am your one of the SAS clients. I have a very serious issue need to discuss with you.
    Could you please give me a call at 510-725-5801 or pass your contact information?
    Thank you very much
    Bernice

  2. petermjensen says:

    It’s all about competition. SO if your competitors (EG United and Lufthansa) do this, then you’ll lose travelers like me purchasing 5-10 overseas tickets (in business class for the company and economy class when traveling with the family) = Approx $15K per year. You may think that SAS is doing the right thing, the stock market, investors, and others seem to think differently after years and years of losses. MAybe they aren’t doing the right thing after all? MAybe they COULD learn a thing or two from the competition. Or even from customers like me and others who travel A LOT over the Atlantic and are trying to help them by telling them what they’ll need to do to earn my business. My assessment is that their processes and rules are optimized for their primary business and market which is travel within Europe. That makes sense. BUt what also makes sense is to adjust the business model when serving/entering into a new market like the US.

    Thanks for a lively discussion, my hope is that someone within SAS reads this and learns a different perspective. I once wrote an email with me suggestions/feedback to their customer service department. It was returned telling me that because I live in the US, they could not accept my feedback in Danish, I had to rewrite and resend in English. They could have copied into Google Translate and forwarded. Says a bit about their desire for customer feedback.

  3. I think SAS are doing the right thing.

    If it were possible to buy a Business ticket your
    way for 2,5 then very few would book business and pay the correct price.

    If you want to sit in business pay the price and all are happy, if you think that some
    people are entitled to business for a reduced fee just because they fly frequently it´s ridiculous.

    Pay the price or sit in monkey class.

  4. petermjensen says:

    Because an upgrade to business from economy is around $300-$600 each way depending on what you paid for your economy ticket. So when I fly the family to Europe on vacation, I end up paying approx $1500 for the economy ticket + $1,000 for the upgrade = $2,500 for a roundtrip fare. That’s cheaper than the $4-6K for the business class ticket. It may seem silly, but saving $10,000 on the family vacation matters to my economy. And it works for both parties: I get better comfort and the airline fills the unsold business class seats and makes extra revenue (unless you’re SAS of course who’d rather fly with the empty seat).

  5. I still can not understand why you´re not booking a seat in the class you want to be in if you want to pay for it anyway?

  6. If you pay for the upgrade anyway why not book in the class you want to pay for? That way you are sure to be seated where you want to be. Your way seems silly.

  7. petermjensen says:

    Because I don’t have to. I just book in economy with United or Lufthansa and get upgraded. And so will all the other Star Alliance customers who live in the US. And that’s a pity because I’d rather support SAS. They don’t even have to be better than United, they just have to be close.

  8. If you are such a hotshot why don’t you book a seat in the class you want to be in so you do not have to beg for upgrades?

  9. petermjensen says:

    THis is exactly the attitude that’s causing SAS to be almost bankrupt. “YoU’re a great customer but you have the wrong card so I’ll treat you like shit”.

    If you fly a lot, you don’t have two cards, you put all miles on one card, ie the airline you fly most with. SO for business people in the Bay Area, that’s mostly United. By requiring a SAS Eurobonus card in order to get good service, they’re effectively limiting their market to Scandinavians and saying that the US market is not important to them. And that’s a pity because with a few changes to address some of the issues above, they COULD be a very attractive airline for the many Star ALliance customers living here and other large US cities that SAS flies from.

    WHich other company would treat a customer who has spent $15K on 5 trips across the atlantic so poorly? In my company, if I saw a new customer that spent that much money, I’d be happy and next time I saw him, I’d try to give him good service (like take his $500 for an upgrade instead of flying with empty seats). BUt no SAS will rather give better service to Ms Svensson who traveled 3 times to Nice on a cheap flight and twice overseas with Lufthansas (total revenue $600) because she has a Eurobonus card. Who cares what card we have. What should matter to SAS is who flies most with them, not what card they have.

    As the article points out, SAS is owned by the Scandinavian governments. That meant that the management didn’t have to worry about running a profitable business, they just keep asking the governments for more money. SAS is one of the last state run companies in Scandinavia. THere’s a reason we privatized Telcos, energi, and more. It’s sad that SAS has to go down because it has a lot of great employees.

    They keep focusing on cutting costs to survive. If they instead focused on finding (and keeping) new customers outside Scandinavia who already fly and pay a lot (by fixing the issues above), they would see impact on the top line instead.

  10. swedendamon says:

    United and SAS have no business together. If you want the perks, get eurobonus

  11. Former SAS EBG says:

    I think the lack of lie-flat seats in business is the biggest issue. Most carriers offer this on long haul.

  12. petermjensen says:

    Re 2: Non premier members won’t be assigned a seat at reservation in Economy plus. These are left for premier customers. At the date of departure, non premier members will be assigned a seat. This ensures the best seats for premium members.

    Great that you’ve received Fastrak in CPH. Maybe you flew business class? I’ve never gotten it in economy. They say you need a SAS EUrobonus Gold card to use Fastrak in CPH if you fly economy. But hey, good for you. At best it’s spotty and inconsistent.

    You cannot use United miles to upgrade at the gate from economy to business. I tried twice last week. ANd I’ve called United to ask about vouchers / certificates. They say you can only use them on Lufthansa, SAS doesn’t recognize them.

    And I don’t agree with your comment re classes. Regardless of which ticket class I am on, United will always upgrade me for $$$ if there’s room in business class. They want the $$$.

    I tried option town twice last week to CPH. DIdn’t get an upgrade. Asked at the gate. No, you’re not SAS Eurobonus, so we won’t upgrade with $$$ even though we have room. Bottom line: They fly with empty business class seats when people want to upgrade for $$$ on option town or at the gate.

    Yes, it’s very much a US thing with free upgrades. That’s exactly my point. YOu get better service with United. SO instead of taking SAS to Berlin via CPH and not having a chance of getting upgraded, take United to Berlin via one of their hubs and have a chance to get upgraded.

    God for you that you haven’t had problems getting full milage credit. But three years ago when I flew back to CPH on SAS and needed the 5K miles to reach 1K, I was PISSED that I only got 50% and din’t make 1K. Yes, it said so in the fine print on page 495867, but who reads that.

    We’re at least 5 Danes here in the Bay Area who have avoided SAS for the 20 Years we’ve been here. Not because we want to but simply because United has been better for us.

  13. I’ve flown SAS on about a dozen flights this year, including two across the Atlantic.

    1. I’ve had no problems with the recognizing Gold status. Specifically I’ve received, lounge access, premier check-in, premier security, and exit row seating.

    2 and 7. United don’t “reserve their best seats” or specifically leave seats free next to elites. Yes, they do have Economy Plus which may make it seem like there are more seats free, but that’s all. UA used to block middle seats next to elites, but they stopped that about 4 years ago.

    3. As *Gold I’ve received Fastrack access several times this year when flying SAS in multiple airports, including CPH.

    4. You *can* use miles for upgrades, via the Star Alliance Upgrade Awards. However like with most airlines, these are restrictive and require you to purchase a specific class of fare (on SAS, that’s C, D, Y, B or S)

    5. They don’t do upgrade for cash at the gate, but they DO do upgrade for cash in advance via Option Town, http://www.optiontown.com

    6. You can upgrade to Economy Extra via Optiontown.

    8. This is true for all European airlines. Free “domestic” upgrades are very much a US thing.

    10. I’ve never had problems getting mileage credit, even on very cheap flights. (eg, $800 from SFO to Europe, booked into a class that gave 100% miles). However, you do not get elite bonus miles like you would if you flew UA/LH/etc.

  14. petermjensen says:

    Many SFO based travelers are United Miage plus members. I am UAL Gold and have flown three times to Europe with SAS in the past 4 months on both Economy and business incl the new direct route to CPH. SOme of the perks you’ve become used to with United won’t be available to you on SAS.

    1. They won’t recognize your gold status. THis means getting the last row seat in economy.

    2. No priority for Security (Fastrak in COpenhagen).

    3. YOu can’t use your miles to upgrade.

    4. They won’t let you upgrade for cash at the gate unless they’re oversold in economy. This means they’d rather fly with empty business class seats than take your approx $500 ech way and make a gold customer happy.

    5. Only regular economy seats, no economy plus with extra legroom. Their economy extra is nice with wider seats but also considered a higher class that you’ll have to purchase or upgrade to. Which you can’t per the above.

    6. I’ve gotten used to United placing empty seats next to their best customers. SAS won’t do that.

    7 No automatic complementary upgrades on connecting flights in Europe. They’ll rather fly with empty business class seats.

    8.If your plans change and you don’t need the ticket, United will issue a credit for one year (minus a fee) with any ticket. If you buy the lowest fare on SAS, your money is lost.

    9. SAS doesn’t always provide full milage credit on the lowest fares. SO if you thought your trip to Europe was going to get you to your next level with United, you might get a surprise. I did.

    10: No true lie flat seat in business class.

    If you’re going to CPH, the direct connection may outweigh the disadvantages. BUt now you know.

    As a Dane, I am sad that SAS can’t compete. You’d think that they’d want travelers like me who buy 5-10 tickets per year to Europe for myself and my family. But no, if you don’t have a SAS Eurobonus card, it doesn’t matter how much you fly with them, they still treat you as if it’s your first time with them.

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