INDIVIDUAL ASSIGNMENT

SCANDINAVIAN AIRLINES

Name: Shameena Kunnel

ID: P19193

Introduction:

Scandinavian Airlines is an aviation industry and operates in Sweden, Europe and the world. SAS
is the national airline of Denmark, Norway and Sweden with its headquarters in the Frosundavik
office building in Solna, Sweden. Star Alliance was founded in 1997 and is the world's largest
airline alliance, of which SAS is a founding member. The airlines are leaders in the aviation
industry, carrying 30 million passengers to, from and within Scandinavia every year. National
airlines also serve more than 125 destinations in Europe, the US and Asia. The airline is
committed to reducing its total carbon emissions by 25% and using Sustainable Aviation Fuel
(SAF) as a biofuel on all SAS domestic flights by 2030. In addition to all flight operations, SAS
offers ground handling and technical maintenance and air freight services. . It is the fourth
largest in Europe and plays an important role in the global airline market. The airlines have the
first pioneer and also the first airline in the aviation industry to offer business class.

The challenge was that the fleet development team tried to convince the SAS management
team to spend the additional 5 million kr per aircraft on the twin combustion engine. As a
company facing increasing pressures related to greenhouse gas emissions and climate change,
this case study provides an opportunity to discuss and analyze various environmental concepts,
including strategic environmental management, adopting the best environmental technologies
available, and the role of internal environmental leadership in a large company and the effect of
market-based mechanisms to improve the environmental performance of a sector.

SAS decided to buy 55 Boeing-737s as a decision was made by an executive for one engine. The
purchase of the "green" engine grew along with the company's growing environmental
reputation. The decision making process in SAS is taken into account and must include financial,
cultural and political aspects.

Green engine:

The aircraft and engine director Bengt-Olov Nas bought the green engine after he was
convinced by the management team. There was a two-stage double ring combustion (DAC) that
was developed in the 1970s but was not commercialized. The decision was to proceed with the
purchase of a new aircraft and meet the legal requirements. They also cause lower NOx
emissions, which is a strong commitment to the environment. The "green" engine added about
$ 2 billion to the entire fleet, and there are no specific numbers on the company's economy.
SAS had paid the carbon emissions tax, but SAS's director of aircraft and engine analysis said the
emissions cap could become a potential problem. The B-737 had never been manufactured or
sold with the dual combustion engine before. Technical hurdles had to be overcome before the
manufacturer could finally offer the SAS product. Nas also had to convince management to use
technology that had never been used on the B-737 aircraft, knowing that using new technology
could lead to unforeseen complications and additional costs.

There are two types of purchasing Green Engine technology:

1. Deterrents:
- High costs of the technology
- Opportunity costs
- Potential of technical complications
2. Incentives:
- Upholding brand image
- Anticipation of market demands and emission caps

Environmental Management at SAS:

SAS has been recognized as a leader in the environmental field by its suppliers and other
airlines, as well as representatives of international organizations such as the Air Transport
Action Group and IATA. They looked for ethical principles, economic efficiency gains and a
better corporate image for the benefit of passengers for better environmental performance. An
online emissions calculator for passengers that provided a specific calculation for the target of
the CO2 generated. The environmental goals were revised and an “eco-political vision”
expanded in order to achieve better production and satisfaction and to achieve qualitative
success. The airline had an environmental management system that was integrated into the
entire operation and management of the airline (TQM - Total Quality Management). There was
a positive environmental image to boost the company's overall motivations to improve the SAS
brand and maintain the Scandinavian standard. They cultivate a positive image of
environmental commitment and performance by responding to increasing pressure from
corporate customers seeking ISO certification and by taking a leadership role in environmental
regulation.
Problem statement:

SAS has been recognized as a leader in the environmental field by its suppliers and other
airlines, as well as representatives of international organizations such as the Air
Transport Action Group and IATA. They looked for ethical principles, economic efficiency
gains and a better corporate image for the benefit of passengers for better
environmental performance. An online emissions calculator for passengers that
provided a specific calculation for the target of the CO2 generated. The environmental
goals were revised and an “eco-political vision” expanded in order to achieve better
production and satisfaction and to achieve qualitative success. The airline had an
environmental management system that was integrated into the entire operation and
management of the airline (TQM - Total Quality Management). There was a positive
environmental image to boost the company's overall motivations to improve the SAS
brand and maintain the Scandinavian standard. They cultivate a positive image of
environmental commitment and performance by responding to increasing pressure
from corporate customers seeking ISO certification and by taking a leadership role in
environmental regulation.

What are the various options available?

Option 1 - Purchasing a Green Engine

Option 2 - go for classic engines

Option 3 - postpone the decision to the future

Criterion to be selected

Finances - unlike cars and two-wheel aircraft engines, enormous financial resources are
required and this is indeed the deciding factor in choosing an engine. If the desired level of
performance is not achieved, the company may be financially vulnerable
Technology - There would almost certainly be additional implementation and maintenance
costs, as well as security concerns. With branding, however, the risk is worth it. SAS can use it in
a number of different ways. They can even put pressure on others with their environmental
marketing study for the year. Other airlines that are not equipped with this equipment and gain
a strategic advantage

Brand - SAS has always chosen to use eco-efficiency in doing business. They are considered to
be one of the best environmentally friendly and sustainable companies in the world. Hence, for
this reason, they cannot lose

Analysis

Buy a green engine

Progressive option that matches the company's environmental reputation. Financial, cultural
and political factors must be considered when making a decision. The aircraft and engine
director Bengt-Olov Nas bought the green engine after he was convinced by the management
team. There was a two-stage DAC (Dual Annular Combustion) system that was developed in the
1970s but never commercialized. The decision was made to buy new equipment to meet legal
requirements.

Choose conventional engines

The decision here is to buy the widely used engines that are effective, efficient, have a lower
financial burden, but have a higher environmental footprint. That decision is actually on the
radar as the benefits of that decision are measurable, immediate, and certain.

Postponing the decision

Postponing the decision means doing nothing and waiting for the situation to get serious. This
decision is crucial as the future is uncertain and there is time for various aspects to be
considered when making a decision. However, the groundbreaking advantage is lost.
Decision:

The new DACs were B-737s, which were tested against a weighting of the company's core
values. SAS 'ability has been to survive in an increasingly competitive market. Until the DAC
engines in the 737 fleet have been properly tested, he will not make any further decisions in
light of the Council's proposal. The safety and reliability of the new aircraft fleet are of
paramount importance.

The decisions are implemented on the basis of:

- Technology
- Emissions
- Brand

Decision grid

Finance technology brand

Purchasing a green 3 1 1
engine

Going for classic 2 2 3

Postponing the 1 3 2
decision
From the analysis of decision grid, its evident that purchasing a green engine is the optimal
solution

Action Plan:

The decision would be the same even after 20 years. The management team would agree to
spend more on modernizing the fleet with fuel-efficient engines. The choice of the current
engine would be more technologically advanced and would also reduce emissions and noise
levels. The justification for green light lies in the current climate and makes the environment
environmentally conscious when choosing the engine.

SWOT Analysis:

Strengths:

- Diversified portfolio with quality products and offerings.

Weaknesses:

- Split services covering most of the routes.

Opportunities:

- SAS to double its capacity with 30 more

Threats:

- Laying off of permanent workforce due to slumping demand.

Given the past financial results of SAS, the world's largest environmental corporate citizen. The
more SAS differs from the multitude of other airlines, the more it will grow. Stakeholders like to
support safe but innovative companies. In this case, security comes from high quality service.
SAS 'environmental model has already saved money at Stockholm Airport, where fees are
charged for emissions. s.SAS has the advantage of comparing the Stockholm experience with
the direction that the entire industry has taken. SAS is more focused on its assets, i.e. its
customers, rather than paying the investors. SAS cannot ignore the people buying the tickets in
making this decision. The new fleet doesn't matter if there are no tramps on the seats. SAS has
worked hard to build its reputation and commitment to the environment. It is a bold promise
and if it is not kept the public will not forget it. The media won't let him forget! Nobody likes
dishonest business and in today's competitive climate there is no need to choose one of these
types. SAS is in the process of making a decision that is right for its customers. It is not a gamble
to assume that they are increasingly aware of the environment. It's a fact and SAS wants to stay
on the radar as a green champion.