SAS is a partly state-owned airline network with a focus on business travelers in the domestic market in Scandinavia and Europe. The airliner business is generally characterized by overcapacity, which has historically made it difficult for the world's airlines to create value for its shareholders. Like most other network carriers, SAS has been hard hit by declining demand, and the increased price sensitivity among travellers are favouring low-cost carriers. SAS is still working on the implementation of the Core-SAS strategy which includes a fleet reduction of 13%, a route reduction of 38% and a capacity reduction (ASK) of 18% compared to the end of the 2008 level. The company has divested a number of non-core operations and is working on other cost reducing initiatives (union agreements etc.) to bring down the unit cost to a competitive level (vs. Finnair and Norwegian). Furthermore, SAS has large unfunded pension liabilities as a result of accumulated actuarial losses which may affect the need for a future capital increase.