SAS back in profit after restructuring

Scandinavian Airlines System (SAS) said on Thursday that it had returned to profit in 2005 as targeted in an ambitious multi-year restructuring plan.

Full-year profit came in at 255 million kronor against a loss of 1.76 billion in 2004.

Pretax profit for the full year was 573 million kronor.

For the fourth quarter alone, net profit was 198 million kronor, compared with a loss of 627 million in the final three months of 2004.

“After five years of sweeping changes, the SAS Group posts positive earnings,” said chairman Jörgen Lindegård in a statement.

“‘Turnaround 2005’ comprising savings of SEK 14 billion was completed as planned,” he said, referring to the troubled airline’s recovery plan which has targeted improved competitiveness.

But despite “powerful measures”, the company was not yet out of the woods and had to cut costs further to find another 2 billion kronor, Lindegaard said.

“Further cost savings must be made to ensure long-term competitiveness in several of the Group’s units,” he said.

Investors welcomed the airline’s return to positive earnings, and the price of SAS shares rose by six percent on the Stockholm stock exchange to 106.50 kronor.