Why Is SAS Airlines So Cheap? A Deep Dive Into Nordic Carrier

Flying across the Nordic countries or jetting off to your next European holiday doesn’t have to cost a fortune. SAS Airlines, also known as Scandinavian Airlines, is known for having some of the cheapest airfares around.

But how exactly does this full-service carrier manage to undercut its competitors while still offering a quality onboard experience?

Read on to learn all about the factors that allow SAS to keep its prices so appealing for budget-conscious travelers.

Reasons For SAS Airlines Being So Inexpensive

Here is a list of those reasons why it’s so cheap:

• Older, Fully Depreciated Fleet
• High Daily Aircraft Utilization
• Concentration on Short-Haul Flights
• Major Bases in Low-Cost Nordic Countries
• High-Density Seating Configurations
• Ancillary Fee Revenue Strategy
• Scaled Back In-Flight Service
• Strategic Route Network Mix
• High Passenger Load Factors
• Low-Cost Competition in Nordic Markets
• Brand Power in Nordic Markets
• Digital Marketing & Distribution Efficiency

Let’s talk about them in detail!

Reason 1: Older, Fully Depreciated Fleet

One of the biggest reasons SAS is able to offer low fares is thanks to their aircraft fleet. The average age of their planes is around 12 years old. While not ancient, it is older than the fleets of competitors like Lufthansa and British Airways who are phasing in brand new models.

SAS saves a substantial amount on aircraft ownership costs by operating fully depreciated planes that were acquired second-hand. Buying used planes, as opposed to brand new, provides massive savings that SAS passes along to customers.

In addition, maintenance and repair costs are lower on older airframes that are fully paid off. With no aircraft loans or leases to pay off, SAS isn’t pressured to charge higher fares to recoup these expenses.

While SAS’s older planes may lack some modern cabin amenities, the trade-off is that travelers get to fly for less.

Reason 2: High Daily Aircraft Utilization

In addition to an older fleet, SAS maximizes the usage of their aircraft with efficient scheduling and quick turnarounds. Their planes spend up to 11 hours in the air each day ferrying passengers between destinations.

High aircraft utilization allows SAS to operate more flights per day from the same fixed costs. For example, a single SAS A320 likely performs 6-8 short-haul flights daily versus only 4-5 for carriers with longer ground time between flights. Thisscheduling efficiency is a key factor in reducing costs.

The SAS fleet is like a factory machine churning out flights and moving travelers 24/7. By keeping their planes constantly zipping across Northern Europe, SASwrings every ounce of value from their assets.

Their aircraft work overtime so SAS can sell more tickets from the same fixed fleet costs. More tickets sold means the costs are spread across more passengers. Thus, SAS can offer reduced fares and still turn a solid profit from their hard-working fleet.

Reason 3: Concentration on Short-Haul Flights

Most of SAS’s network consists of short-haul flights within Europe. Focusing on quicker routes of just 1-2 hours airtime helps SAS reduce costs in a few key ways. First, shorter flights consume less fuel compared to long-haul journeys.

They also require less maintenance to airframes since take-offs and landings wear the most on planes. Short-haul aircraft can make multiple trips per day, multiplying these per-flight savings.

Furthermore, airport fees are lower for short-haul routes, providing additional savings over longer flights. With their network concentrated on shorter hops around Northern Europe, SAS can genuinely save on these recurring flight costs.

With short-haul operations optimizing their efficiency, SAS is able to provide bargain ticket prices, especially when booked well in advance.

Reason 4: Major Bases in Low-Cost Nordic Countries

Headquartered in Stockholm, SAS maintains major hubs and crew bases across Scandinavia including Copenhagen and Oslo.

Operating out of Nordic countries provides notable cost savings versus basing their operations in Western European hubs like London or Frankfurt.

Parts, labor, airport fees, catering, and pretty much everything else costs less in this part of the world.

The Nordic countries have very high living standards, productivity and worker skills. Yet the lower taxes and public charges help airlines keep down operating costs. SAS can pass these lower expenses to customers through cheaper fares since they aren’t saddled with the higher overheads of other bases.

This geographic advantage has played a key role in SAS’s budget-friendly pricing for decades.

Reason 5: High-Density Seating Configurations

Getting more specific, another way SAS controls costs is by configuring aircraft with additional seats. SAS crams more rows into economy class than many competitors. By maximizing seating capacity, they can accommodate more passengers per flight.

For example, a typical SAS A320 squeezes in 158 passenger seats versus 150 seats on an EasyJet A320. More seats mean more travelers flying from the same costs. This increase in efficiency lowers the cost per available seat mile, a key metric for airlines.

While cramped legroom and narrower seats may compromise comfort, the trade-off is SAS can offer much lower fares from the revenue boost of added capacity.

For the budget-conscious crowd, sacrificing some personal space is willingly accepted to get a good deal. SAS relies on packing in value-seekers willing to get cozy in exchange for cheap tickets.

Reason 6: Ancillary Fee Revenue Strategy

Another commonality SAS shares with low-cost carriers is generating substantial ancillary revenue from fees. SASunbundles services like checked bags, seat assignments, onboard meals, etc. from the base ticket price. By separating these costs as optional extras, SAS can reduce the core fare.

Travelers only pay for the amenities they actually want. This à la carte pricing shifts revenue from airfare to ancillary fees. It’s proven very successful for SAS.

In 2021, SAS collected nearly 14% of total revenue from ancillary fees, on par with the ultra-low-cost carriers. By monetizing things that used to be included, SAS boosts the bottom line.

This lets them profitably offer bargain base fares to attract passengers. The result is a win for SAS and for customers who get cheap flights plus pay for just the services they value.

Also Read: Reasons For Frontier Airlines Being So Inexpensive.

Reason 7: Scaled Back In-Flight Service

While SAS still offers complimentary soft drinks, coffee, tea and basic snacks to all cabin classes, they have scaled back the in-flight service compared to other full-service flag carriers.

For example, complimentary alcohol and premium meals are only offered to business class passengers. In economy, food and beverages are available for purchase. This ancillary revenue model helps SAS recoup costs instead of giving amenities away for free.

There are also fewer flight attendants staffed on each SAS flight compared to the employee rosters of other legacy airlines. Keeping the in-flight service efficient but scaled back enables SAS to save substantially on labor and catering supplies.

SAS focuses resources on core safety instead of over-the-top pampering. For most travelers, saving money on airfare is preferable over an indulgent free meal or extra attention from the crew.

Reason 8: Strategic Route Network Mix

Examining SAS’s route network also provides clues into how they offer low fares.

SAS flies to over 100 destinations including major cities and airports across Europe.

This includes giant hubs like London Heathrow, Paris CDG and Amsterdam that feed long-haul connecting traffic.

It also provides point-to-point nonstop flights between key cities in the Nordic countries.

This route mix means SAS can operate busy, high-volume routes that have the economies of scale to lower per-passenger costs. Flying between major hubs provides a steady pipeline of passengers that enables SAS to run frequent flights and fill planes.

Point-to-point flying caters to Nordic business traffic with a propensity to travel. High route frequency and passenger loads are key ingredients to profitable low fares.

Reason 9: High Passenger Load Factors

Building on the previous point, SAS has achieved high passenger load factors across its network in recent years. Load factor measures the percentage of airline seats filled by paying passengers.

In 2022, SAS reported a load factor of 77.5%. This means their flights operate over three-quarters full on average. When planes consistently fly nearly full, revenue is maximized while costs are spread across more passengers.

SAS has honed its capacity to ensure strong demand along its routes. By reliably filling planes, even at cheap fares, these high load factors are instrumental to SAS’s low-cost pricing. Essentially, filling more seats allows lowering prices.

SAS has mastered operating high-volume routes where demand supports bargain fares.

Reason 10: Low-Cost Competition in Nordic Markets

Being based in Northern Europe, SAS faces intense competition from the likes of Norwegian Air, Ryanair, and EasyJet. These ultra-low-cost carriers operate large bases across Scandinavian cities.

To stay competitive, SAS has to closely match the rock-bottom pricing of budget airlines. SAS manages this by keeping their own costs in line with discount rivals.

Lower labor costs in Nordic countries combined with SAS’s other operating efficiencies give it one of the lowest cost bases among full-service flag carriers. This allows SAS to get much closer to the incredibly cheap fares of no-frills airlines.

Matching budget airline pricing is crucial for SAS to avoid losing short-haul market share across Northern Europe.

While SAS cannot attain the same hyper-efficiency as budget carriers, the competitive pressure forces SAS to enhance its own cost discipline. This competition ultimately benefits customers who get a greater choice of cheap fares in the region.

Also Read: Here Is Why Spirit Airlines So Cheap.

Reason 11: Brand Power in Nordic Markets

As the Nordic countries’ flagship airline, SAS enjoys strong brand recognition and loyalty across Scandinavia. SAS’s long history in the region imbues it with a sense of national pride.

Nordic travelers are often keen to support SAS over foreign carriers. This brand power means SAS can attract passengers even without having the lowest fares all the time.

The propensity of Nordic flyers to actively choose SAS provides the airline with solid baseline demand. SAS taps into this brand leverage to maintain higher fare premiums in local markets than in other European markets.

The airline can earn sufficient revenues from Nordic routes to subsidize lower fares elsewhere. In a sense, Nordic travelers’ affinity for SAS allows the airline to offer cheaper tickets in more competitive, price-driven markets.

Reason 12: Digital Marketing & Distribution Efficiency

An additional factor enabling SAS’s budget fares is the company’s proficiency in digital marketing and distribution.

With a strong online presence and user-friendly booking tools, SAS makes it easy for tech-savvy Nordic travelers to find and book its cheap fares. Travelers can conveniently search for SAS deals via mobile apps and social media.

SAS has also optimized online search to ensure their cheap fares appear prominently in flight search engines. Travelers actively seeking deals will come across SAS.

By selling a high proportion of tickets directly via its website and mobile app, SAS avoids hefty travel agent commissions. Lower distribution costs translate into cheaper fares compared to less digitally adept competitors.

In summary, SAS manages to offer low fares by:

• Operating older planes that are cheaper to maintain
• Scheduling aircraft for maximum daily utilization
• Concentrating on short-haul flights up to 2 hours
• Basing operations in lower-cost Nordic countries
• Configuring economy cabins with additional seats
• Generating substantial ancillary fee revenue
• Providing efficient but scaled back in-flight service
• Mixing major hub and point-to-point routes
• Achieving high passenger load factors
• Facing low-cost competitor pressure
• Leveraging brand loyalty in Nordic markets
• Selling tickets directly via digital channels

While SAS has hallmarks of a full-service airline, implementing the right mix of cost-savings measures and commercial strategies has allowed it to undercut flag carrier fares. The airline has impressively managed to straddle the line between low cost and premium service.

For Nordic travelers and visitors to the region, SAS provides an affordable way to hop around Northern Europe in comfort.

Also Read: Why Is The Rio Hotel So Inexpensive?

Frequently Asked Questions About SAS Airlines

To summarize key facts about the Nordic carrier, here are concise answers to common questions travelers have about SAS:

Wrapping Up

In summary, SAS provides an affordable way for budget-minded travelers to fly within Northern Europe and beyond. The airline manages to keep prices low through a combination of cost discipline and leveraging brand loyalty in Nordic markets.

While not a 5-star airline, SAS offers a quality experience with the bonus of cheap fares.