Scandinavian airline SAS expects its Irish subsidiary to begin flying between Spain, Britain and the group's northern European home market next November. SAS is establishing an Irish-registered airline to fly European routes on its parent's behalf using nine new Airbus A320 Neo aircraft, priced at $3 billion (€2.82 billion), which the group is purchasing through a leasing company that it has which is also based in the Republic.
The carrier's vice-president of external production, Mikael Wangdahl, confirmed on Tuesday that SAS intends to have the Irish operation "up and running by November 1st". Airbus is due to deliver the nine A320s that the new airline will operate in the autumn.
“The first destination will come out of the UK, from London Heathrow to Scandinavia,” Mr Wangdahl said. “We are also looking into leisure flights from Spain.”
SAS will own the Irish airline, which will be a separate entity to its parent but will carry its brand. It will fly the Spanish and British routes on a “wet lease” basis, that is, providing the aircraft and crew.
The Irish subsidiary is applying for an Irish Air Operator's certificate – an airline licence – that will entitle it to fly anywhere in the European Union. It began advertising for executives and administrators to run the business on Tuesday. It has hired CAE Parc Aviation to recruit staff.
Mr Wangdahl said that SAS hopes to tap into the existing pool of airline expertise here. "In Ireland you have a good knowledge of the aviation industry," he said. "You have a lot of experience here."
About 40 staff will be based here initially. The airline will begin hiring pilots and crew later in the year. Mr Wangdahl explained that the group chose the Republic because its regulator, the Irish Aviation Authority, has a strong record and because it has signed up to the Cape Town Convention, which gives extra security to aircraft lessors and financiers.
SAS was also attracted to the Republic because of lower costs. Labour is expensive in Scandinavian countries. The group hopes that basing an operation in the Republic will help cut these costs. Its vice-president stressed that its unions recognised that SAS had to respond to developments in its industry through wet lease deals and other arrangements.
Other airlines already operate 37 routes for SAS under a lease arrangement. These include Irish carrier, Cityjet, which recently bought one of the group's bigger contractors, Denmark-based Cimber.
As SAS focuses on serving the Scandinavian market, there are no plans for the Irish subsidiary to fly long-haul services. However, Mr Wangdahl acknowledged that it could be used for the group’s existing services from the Republic.
SAS flies from Dublin to Copenhagen in Denmark, Oslo in Norway and Stockholm in Sweden. It also plans to serve the Swedish capital from Shannon this year.
The airline's rival, Norwegian Air Shuttle, set up an Irish subsidiary three years ago to operate its long-haul network. That carrier has just announced 24 new transatlantic routes from Irish airports. Mr Wangdahl said that SAS's decision to locate here had nothing to do with its competitor's move.