SAS shares slump despite rise in profits

Scandinavian airline SAS reported on Tuesday a slim third-quarter net profit, a switch from a deep loss in 2010, and maintained its positive outlook for all of 2011, but said uncertainty lay ahead.

SAS shares slump despite rise in profits

For the July to September period, SAS posted a net profit of 214 million kronor ($32.7 million), compared to a net loss of 1.05 billion kronor during the same period a year earlier.

Not including non-recurring items, the company’s income stood at 298 million kronor, which was an “encouraging but not satisfactory” amount, according to company chief executive Rickard Gustafson, who has been in charge since February.

Following the news, the airline saw its share price fall 7.59 percent to 10.85 kronor in late morning trading on the Stockholm stock exchange, which was up just over one percent.

The fall was expected, according to Nordea analyst Bjarke Petersen, who told the Dow Jones Newswires the SAS results were “all in all” negative.

The company meanwhile saw its sales slip 1.5 percent year-on-year to 10.6 billion kronor.

“While the assessment we made in conjunction with the report for the first quarter of 2011 remains valid, it should be noted that the risks involved with fulfilling this forecast have increased,” Gustafson cautioned, as SAS blamed soaring fuel prices and the global economic downturn.

However, the chief executive said, “on condition that nothing unexpected occurs, it is our opinion that there is still the potential for SAS to achieve marginally positive income before tax for full-year 2011.”

SAS, which was recently crowned the world’s most punctual airline, stressed that it had seen its passenger numbers grow four percent during the quarter to some seven million.

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‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers.