SAS - chocks away - FT.com Santa's elves, facing the logistics challenge of getting goods out of Lapland, may be relieved. SAS, the Sweden-based airline whose service includes the Finnish province, stepped back from a financial precipice on Monday when its unions agreed cost-cutting deals. These are vital if a new $500m credit facility is to flow. Shares in the carrier - half-owned by Scandinavian governments and where pre-tax losses have topped SKr12bn ($1.8bn) over the past decade - rose 25 per cent to SKr7. Whether investors elsewhere in Europe's airline industry feel thankful is another matter. Despite four years of economic turmoil, consolidation in the sector has been painfully slow. That can be attributed partly to European merger policy, which focuses on individual route overlap. This doomed a merger between Greek carriers Olympic and Aegean and bodes ill for Ryanair's latest effort to take over Aer Lingus. True, severe financial problems have grounded a few players - such as Malev and Spanair. But the big flag-carriers - including Lufthansa and Air France-KLM - have only become serious about politically-sensitive cost-cutting in the past 12 months. Lufthansa, for example, expects to increase capacity by only 0.5 per cent in its passenger airline business this year, with winter timetable cuts. In 2011, there was a 10 per cent increase, group-wide, in available seat kilometres. With leading low-cost carrier Ryanair also remaining disciplined - it will park 80 aircraft this winter - short-haul yields (ticket prices) have generally benefited. But the big flag-carriers have more resilient long-haul business to help them through tough restructurings. SAS less so. Even after Monday's gains, its enterprise value is below SKr10bn ($1.5bn), or less than one-quarter of estimated 2012 revenues. That suggests scepticism about SAS's long-term flight path. The elves may not be out of the woods just yet.