SAS profits beat expectations

Scandinavian Airlines System (SAS) on Wednesday beat market expectations with a 14 percent jump in net profit in the third quarter on the back of strong sales and continued cost cutting.

For the July to September period the carrier reported a 14.17 percent increase in net profit to 604 million kronor compared to 529 million for the same period last year, the company said in a statement.

Sales climbed to 18.035 billion kronor, up 8.86 percent on the year, and exceeded the 17.786 billion expected by analysts, according to a survey by forecasting and analysis service SME Direkt.

Pre-tax profit was 969 million kronor up 56.54 percent from the same period last year and above market forecasts of 940 million.

“The earnings trend is positive, but the strong economy is a significant contributory factor,” SAS acting chief executive Gunnar Reitan said.

A cost savings program aimed at saving 2.5 billion kronor by the end of 2007 was being implemented and had been achieved to 68 percent, the company said.

“It is necessary to continue focusing full energy on cost cutting measures,” Reitan added.

The number of passengers carried by SAS in the nine months to September was up 7.2 percent to 29 million on the previous year. In the third quarter passenger numbers had risen by 4.4 percent on the year to 10.1 million.

In early afternoon trade on the Stockholm stock exchange the airline’s share price had dropped 2.09 percent on the day to 105.25 kronor.

Steven Brooker, aviation analyst at Enskilda Securities, said he saw Wednesday’s share price fall as profit-taking after a recent strong run.

“I think this is short-term profit-taking in the share, with SAS’s unit costs under control and sales surprising on the upside,” Brooker told financial news agency AFX.

Reitan, the group’s former deputy chairman, was named as SAS interim chairman in August after the resignation of Joergen Lindegaard.

In October the carrier announced that 54-year-old Swede Mats Jansson would take over as the group’s CEO on January 1.

Jansson currently heads Swedish industrial and consumer giant Axel Johnson AB.


SAS announces reduced loss and pins hopes on summer flights

Scandinavian airline SAS narrowed its losses in the second quarter, the company said Thursday, as it set its hopes on an easing of coronavirus restrictions this summer.

SAS announces reduced loss and pins hopes on summer flights
A SAS aircraft taking off in Paris. Photo: Charles Platiau/Reuters/Ritzau Scanpix

The earnings report came a day after the governments of Sweden and Denmark announced another round of aid to the ailing carrier.

From February to April, SAS booked a net loss of 2.43 billion Swedish kronor ($292 million, 240 million euros) — 30 percent smaller than in the second quarter last year.

The company also reported an improved operating profit “for the first time since the pandemic’s outbreak, both year-on-year and compared with the previous quarter,” pointing to its cost cutting efforts.

However, the number of passengers in the period declined by 140,000 compared to the first quarter, to 857,000.

This caused revenue to fall to 1.93 billion kronor, a 15 percent drop from the preceding quarter and 63 percent from a year earlier.

“The increase in vaccination rates provides some hope for the relaxation of restrictions, and an increase in demand ahead of the important summer season,” chief executive Karl Sandlund said in a statement.

However, the CEO also noted that “many customers are now increasingly choosing to book their tickets much closer to their travel dates, which makes it difficult to predict demand during the summer.”

SAS also said it expected claims from passengers of up to 150 million kronor after a European court ruled in March that customers should be compensated over disruptions due to a pilots’ strike in 2019.

After cutting 5,000 jobs last year — representing 40 percent of its workforce — SAS announced Wednesday an additional credit line of three billion kronor from the Danish and Swedish governments, its main shareholders, to get through the crisis.

The airline received a similar loan and a capital increase last year.

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