SAS posts deep losses after cartel fine

Beleaguered Scandinavian airline SAS posted deep losses for the third quarter, with results weighed down by legal fees and a €70 million fine ($96.38 million) for being part of a global cargo cartel.

SAS posts deep losses after cartel fine

From July to September, SAS posted a net loss of 1.05 billion kronor ($155.5 million) compared with a profit of 152 million kronor for the same period a year earlier, the company announced in a statement on Wednesday.

Following the news, the airline saw its stock shed 6.02 percent to 24.80 kronor a share in afternoon trading on a Stockholm stock exchange down 0.31 percent.

Acting CEO John Dueholm stressed that SAS had seen “sharp improvement in underlying earnings,” but that its results had been “negatively affected by substantial non-recurring items in the period.”

Such items amounted to a whopping 1.41 billion kronor in the third quarter, including 982 million kronor linked to legal penalties connected with its activities in Europe and the US. A court dispute with low-cost rival Norwegian also cost 218 million kronor in the third quarter.

SAS announced on Tuesday that it planned to appeal the European Commission’s ruling

to fine it and 10 other airlines for creating a global cargo cartel.

The 11 cargo carriers were found guilty of coordinating their action on surcharges for fuel and security without discounts over a six-year period on cargo flights to and within the European Economic Area.

At an operational level, SAS swung to a 488 million kronor loss from a profit of 259 million a year earlier. The airline, which is 50-percent owned by the Swedish, Danish and Norwegian government, saw its sales slide 3 percent to 10.7 billion kronor

during the three-month period.

However, it stressed that the situation in the hard-hit airline industry was improving.

“The recovery in the airline industry is continuing and this is particularly evident in the growth reported in intercontinental travel and the general trend in business travel,” the company said, adding “the positive market trend is expected to continue.”

In the second quarter, SAS had seen its results dragged down by the flight chaos caused by a cloud of volcanic ash from Iceland in April and May.

SAS, which has been hard-hit by the rise of low-cost airline Norwegian and by plunging passenger traffic numbers in the wake of the global economic crisis, launched a major restructuring plan, Core SAS, last year aimed at saving nearly eight billion kronor, entailing more than 5,000 layoffs.

Mats Jansson, the CEO who spearheaded the restructuring plan, stepped down on October 1st and will be replaced by Rickard Gustafson no later than March. In the meantime, vice chair Dueholm is filling in as acting CEO.

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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