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SAS reports profits hike

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14:20 CET+01:00
Scandinavian airline SAS has reported a profit before tax of 114 million kronor ($16.2 million) for the third quarter 2009 up from 110 million kronor in the corresponding period of last year.

Turnover fell by 16.6 percent to 11 billion kronor in comparison to 13.3 billion kronor in the third quarter 2008.

Passenger numbers fell by 14.7 percent during the period.

The profits for the third quarter were unexpected with analyst expectations, compiled by Reuters, indicating an average pre-tax loss of 403 million kronor.

The report was received positively by stock markets on Thursday with SAS shares trading up eight percent by mid-afternoon.

The effects of the global recession have impacted all areas of the industry, CEO Mats Jansson concluded in the report.

SAS has pushed through savings cuts of 2.5 billion kronor during the year which have impacted on the first three financial quarters.

In total 1,884 full-time staff have left the company and capacity has been cut.

The airline's management and board spent Wednesday night working to secure an agreement with unions representing pilots and cabin staff and hope to present confirmation of a deal in the coming days.

Back in August Mats Jansson was explicit in his demands for pilots to agree to significant pay cuts and more flexible working conditions in order to secure the company's survival.

Over the next two years the airline plans to cut 4,500 staff and 21 aircraft will be grounded. Management have demanded staff pay cuts of up to 10-20 percent.

SAS pilots have agreed to pay cuts of 10 percent, but the company hierarchy has demanded larger concessions.

The Swedish state owns a 21.4 percent stake in SAS Group while Norway and Denmark own 14.3 percent each.

Both the Swedish and Danish governments have indicated a desire to sell their stakes in the airline.

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