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Recent speculation to create a Nordic air giant if Finnair and SAS merge

Monday, 24 June 2013
Finnair feels that there are potentials if it merges with SAS, according to Finnair CEO Pekka Vauramo.
SAS and Finnair know what hard times means, and in an industry that has made itself notorious for having difficulty of providing some profits to their owners, some other ways of designing strategy to change that somewhat characteristic is being considered. Thus, talks of a possible merger between SAS and Finnair, something which is not a new idea is taking hold on the streets Stockholm and Helsinki.

The most obvious benefit would be to Finnair's interest on long-haul routes to the Far East. With the support of SAS that route could see a proper boost in likely direct flights.
A merger would mean that there would be a suddenly giant aviation company with an extensive network eastwards and in Europe, where the old SAS also could invest in long lines to the west. It would also be an effective way to meet the increasingly tough competition from budget airlines such as Norwegian, which started long hauls to both the U.S. and Asia.
Finnair sees potential: "I see the potential of a merger. A lot of such considerations is coming from our largest shareholder right as they more towards that direction," says Finnair CEO Pekka Vauramo to Danish business newspaper. Borsen. The biggest shareholder referred to could be the Finnish state, which owns 57 percent stake in the company.
What sounds like a serious merger talk, forced SAS shares leap faster than any other share in the Danish bourse share this morning. SAS rose 8.5 per cent in the early morning trades on the stock exchange at a price of Dkr11.50.  Also after the interview with Vauramo SAS shares stepped up on an otherwise sour Stockholm Stock Exchange. At lunchtime, the shares were up three percent.
Previous attempts to merge the two companies have fallen, partly because of differing views on the extent to which companies would truly complement each other.
After the interview, Finnair has downplayed Vauramos statement somewhat and said that he also pointed out some problems with a merger. Maybe the whole thing is seen as a test balloon or an attempt to raise the question again. Continuation will probably follow.
by Scancomark.com Team

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