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SAS losses fall sharply

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11:00 CEST+02:00
Scandinvian Airlines System (SAS) said Thursday it had sharply narrowed its losses in the first quarter on increased sales and cost-cutting measures and predicted favourable trends in passenger growth for the rest of the year.

The airline reported a first quarter net loss of 47 million kronor ($7.0 million) from 1.06 billion in the same period last year.

"Seasonally this is the weakest quarter of the year," said SAS chairman Mats Jonsson, "but we have adjusted our capacity to lower demand levels."

First quarter sales rose 6.6 percent to 13.839 billion kronor, just shy of 14.283 billion foreseen by analysts at SME-Direkt.

The number of passengers carried by SAS in the first three months of the year jumped 6.3 percent to 9.1 million, the company said, adding that its cost-cutting goal of 2.5 billion kronor in 2006-2007 had been 85 percent achieved by March.

SAS had come close to bankruptcy several years ago amid a global crisis in the airline sector following the September 11, 2001 attacks in the United States, the war in Iraq and the SARS epidemic.

But thanks to several drastic savings measures it managed to return to profit last year.

Looking ahead, SAS said in a statement Thursday that "there are currently no indications of a slowdown in the economy or the airline market."

"However, uncertainty remains regarding the strength of growth, the future competitive situation and the trend for jet fuel prices. The trend in the first quarter was in a positive direction and continued favourable passenger growth is expected in most of the SAS Group's markets for the full-year 2007."

But the company added that competition in all its markets "is expected to remain intense."

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