SAS Scandinavian Airlines has confirmed it will introduce another long-haul service to its network next year with the inauguration of a five times weekly link between Stockholm Arlanda and Hong Kong from September 2015. The new route will be the only non-stop offering in this market, which despite no scheduled link supports more than 30,000 passengers per year.
This will mark the return of direct flights into Asia for the Scandinavian flag carrier from Sweden’s capital city. In the past ten years it has previously offered links from Stockholm to both Beijing and Bangkok, the latter on a seasonal winter basis, but these were both suspended from spring 2009. However, SAS does offer links into Asia from Copenhagen with flights to Beijing, Shanghai and Tokyo.
Hong Kong is one of the most popular destinations in Asia that it is not currently served from Stockholm Arlanda Airport and around 160 Swedish companies are established in the Hong Kong region. "Swedish accessibility need to be strengthened to attract investment and visitors, create jobs and increase growth across the country. This type of investment is necessary for Sweden to compete internationally," said Torborg Chetkovich, chief executive officer of Swedish airport operator, Swedavia.
The strong point-to-point traffic between Stockholm and Hong Kong is currently mainly catered for by the operations of Finnair via its Helsinki hub, although there are also notable flows with Cathay Pacific Airways and Air China via their existing routes into Scandinavia and the Nordic region. There are also clear signs that the introduction of flights by Qatar Airways and Emirates Airline into Stockholm from November 2007 and September 2013, respectively, has impacted the dynamic of this market.
Our analysis of MIDT data, below, shows that over the past four years more than 30,000 bi-directional O&D passengers have flown between Stockholm and Hong Kong. The market has been relatively stable during this period after seeing a strong growth during the second half of the 2000s. Over the last ten years O&D demand has risen at an average annual rate of 7.8 per cent.
Over the first nine months of 2014 O&D demand on the Stockholm – Hong Kong city pair is up 7.5 per cent versus the same period in 2013. Interestingly, it is the arrival of Emirates into the Swedish market that has had the biggest impact on the travel trends between the two cities. The UAE carrier has secured a 10.2 per cent share of the demand during the nine month period, with the biggest impact of its arrival being felt by Gulf rival Qatar Airways whose share of traffic fell from 9.1 per cent in Q1-Q3 2013 to 2.8 per cent in Q1-Q3 2014.
SAS has made significant financial improvements through a revised business strategy, but this has not restricted its network growth. The airline introduced a total of 50 routes (many seasonal) into its system this year and has already announced plans to launch in nine new city pair markets during 2015.
The most notable operational savings have been achieved through a streamlining of the SAS fleet: a process that is due to be completed in the coming year. The Star Alliance member has recently confirmed its purchase of Danish airline Cimber Air and it intends to transfer its regional Bombardier CRJ900 operation to the company from winter 2015/2016.
This year SAS has already reduced capacity at its Finnish operation, Blue1, by about 40 per cent as a result of the decision to divest four Boeing 717s. The carrier’s five remaining Boeing 717s will be phased out in 2015 and will see the SAS aircraft fleet reduce to only four aircraft types compared to the nine it operated in 2012.