SAS takes off on the low-budget vapour trail

Scandinavian airline group SAS is thinking of following in the vapour trails of Ryanair by transforming itself into a budget operation.

Should the carrier, which is 49 per cent owned by the Swedish, Norwegian and Danish governments, go ahead with the plan, flights to Scandinavia and most of northern Europe would be affected. Its long-haul operations would not be, however.

SAS launched a trial budget service, snowflake, just under a year ago. The group's president and chief executive, Jorgen Lindegaard, said the brand had been a success, appealing to holidaymakers seeking a cheap getaway and recent Scandinavian immigrants unable to afford return flights on a regular basis.

The onset of winter saw demand ease and routes scaled back. The plan is to relaunch them in the summer but Mr Lindegaard, who joined SAS in May 2001, said the group was considering dropping the snowflake brand and offering budget flights under the SAS banner instead. "For domestic travel, we will set up budget travel and we have to decide whether that particular product or service should fly as snowflake or not and how to brand that," he said.

He conceded that SAS's move into the low-cost market had been late. "We simply didn't realise how rapidly budget operations would happen in Scandinavia. We have been very busy just surviving."

SAS, which had a high reliance on business class travel, was rocked by the post-11 September slump.