SAS disappoints as losses mount

Scandinavian airline SAS on Wednesday posted larger than expected losses for the final quarter 2010, although said that it hopes to return to profit in 2011 as the market recovers.

SAS disappoints as losses mount

“Assuming continued recovery in the home market… and that no unexpected events occur, favorable conditions are in place for the SAS Group to achieve positive income before tax for the full-year 2011”, the company said in a statement.

SAS posted a fourth quarter pre-tax loss of 464 million kronor ($72 million), in comparison to a loss of 1.52 billion in the corresponding period of 2009. The airline put the disappointing figures down to non-recurring items and the impact of the Icelandic ash cloud.

Analysts had forecast an average loss of 174 million kronor for the period, according to a Reuters survey.

Turnover amounted to 10.60 billion kronor, compared to 10.32 billion kronor a year earlier.

Adjusted for various forms of non-recurring items and the impact of the Icelandic ash, SAS full-year earnings was a positive 265 million kronor.

“By putting these non-recurring items behind us, we can now devote our energy to looking forward and to focusing on core business,” the firm wrote.

Results for the first quarter, normally the firm’s weakest period, are expected to be negative, but better than in the corresponding period of 2010.

The company underlined that cash flow from operating activities has improved considerably, which is seen as confirmation that the Action Core SAS austerity programme has created “a good starting point for the future”.

Core SAS will be completed in 2011 and the programme is expected to provide an additional, positive effect on earnings of 1.5 billion kronor for the year with restructuring costs expected to be 400-600 million kronor.

SAS expected the market to expand overall at around 4-6 percent in 2011, and the company plans to expand capacity in line with the market.

The company warned however that the development of the market remains uncertain in terms of both yield (revenue per passenger-km) and jet fuel prices.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


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