SAS posts new loss after ‘horrifying’ year

Scandinavian Airlines (SAS) saw its troubles deepen on Wednesday as it reported a loss for the sixth quarter in succession.

The company, which had described 2008 as a “horrifying” year after experiencing technical problems with its fleet and a deadly crash in Madrid, predicted a difficult 2009 as passenger numbers dwindle amid the global economic crisis.

The airline posted a full-year loss in 2008.

But in the January-March period this year, Scandinavian Airlines System, majority owned by the Danish, Norwegian and Swedish states, reduced its net loss to 748 million kronor ($91 million).

In the same period a year earlier, it registered a loss of 1.16 billion.

SAS’ operating loss widened, however, from 513 million a year ago to 747 million.

The company’s share price was down by 5.75 percent at 3.44 kronor in mid-afternoon trading on the Stockholm exchange, as the overall market was down by 4.75 percent.

The carrier completed a six-billion-kronor share issue in April.

“The entire aviation industry, which is one of the global industries that is most sensitive to economic fluctuations, is experiencing major problems, one of the consequences of which has been extensive losses,” SAS chief

executive Mats Jansson said in a statement.

In a bid to reduce its costs, SAS, which is divided into three national entities (SAS Denmark, SAS Norway and SAS Sweden), has been focusing on its Nordic operations.

In January, it sold its subsidiary Spanair to a consortium of Spanish investors for the symbolic sum of one euro.

Under its restructuring plan, dubbed “Core SAS,” the company has announced 3,000 job cuts and reduced its workforce by another 5,600 when airBaltic and Spanair were sold.

The restructuring plan unveiled in February is aimed at saving 4 billion kronor by 2011.

Since the start of the crisis last year, the airline has cancelled almost 40 percent of its routes.

In the first quarter, it had 5.7 million passengers, compared to 6.8 million a year earlier.

Established in 1946, SAS has a 40 percent share of the northern European civil aviation market.

The company has regularly been the target of takeover rumours, with Germany’s leading airline Lufthansa long mentioned as a possible rescuer.

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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.

READ ALSO: Virus-stricken airline SAS secures new public loan from Denmark and Sweden