SAS records heavy third quarter losses
Published: 05 Nov 2008 10:17 GMT+01:00
Updated: 05 Nov 2008 10:17 GMT+01:00
Scandinavian airline SAS faced mounting worries on Wednesday as the company posted heavy losses for the thirds quarter.
SAS said its results were weighed down by crises in the financial and airline sectors and a deadly crash involving its subsidiary Spanair.
The SAS group reported a net loss for the July to September period of 2 billion kronor ($260 million) compared to a profit of 701 million a year earlier, and reiterated that structural changes lay ahead for the group.
"Naturally, our result for the quarter is not satisfactory," chief executive Mats Jansson said in a statement, referring to a "three-dimensional crisis."
"The financial crisis has come top of the crisis in the industry and strengthens the negative economic trend. In addition to this, we have our own SAS-specific problems," he said.
The SAS share plunged on the news, shedding 5.41 percent in early trading on the Stockholm stock exchange which was down by 0.97 percent.
The crash of a Spanair plane in Madrid on August 20 that left 154 people dead was expected to cost the carrier 1.95 billion kronor, SAS said.
The group registered an operating loss for the third quarter of 1.66 billion kronor, compared to a profit of 529 million kronor in the corresponding period a year ago.
Sales rose slightly however, by 0.35 percent, to 16.3 billion kronor.
The group fell into the red in the second quarter, posting a loss of 411 million kronor.
Jansson said negotiations on structural changes were still ongoing.
Management was "focusing intensely on assessing various structural solutions and alternatives," he said.
The group in August announced it would step up its restructuring programme, reducing its fleet by 10 percent and cut 2,500 jobs.
The programme will be further widened with new cost savings of three to four billion kronor, the company said on Wednesday.
Media reports in September speculated that German carrier Lufthansa may be preparing a bid for SAS.