SAS earnings hit by Spanair bankruptcy

Scandinavian airline SAS said Wednesday it improved its operating profit last year but that it was dragged into loss as its former subsidiary Spanair filed for bankruptcy.

SAS earnings hit by Spanair bankruptcy

The airline, struggling to cut costs to remain competitive, said even despite the exceptional items it trimmed its losses last year to 1.69 billion kronor ($253 million) from 2.22 billion kronor in 2010.

Operating profit before exceptional items, such as the 1.7 billion kronor charge for the stake it still had in Spanair, came in at 94 million kronor, compared to an operating loss of 444 million kronor in 2010.

In the fourth quarter alone, during which the Spanair charge was booked, the airline suffered a loss of 2.2 billion kronor.

Sales increased 0.8 percent in 2011 to 41 billion kronor.

Excluding the effects of Spanair “we delivered marginally positive earnings,” CEO Rickard Gustafson said in a statement.

He said that despite increasing competition and weakening economic trends, SAS managed healthy growth and record cabin loads during the peak summer months while scoring its highest customer ratings in over a decade.

Gustafson said that given the current economic weakness plus uncertainty over fuel prices, SAS would accelerate its cost-cutting programme and was seeking five billion kronor in savings and new revenue in 2012.

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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.