SAS to slash costs as profits nosedive

Troubled Scandinavian airline SAS reported a sharp fall in net profits for the fourth quarter on Thursday and announced further cost-cutting measures to meet increasing competition from budget airlines.

SAS to slash costs as profits nosedive
SAS profits took a dive in the fourth quarter. Photo: TT
The company posted a net loss of 303 million kronor ($39.4 million) from August to October compared to a profit of 1.47 billion in the same period last year.
Sales fell slightly to 10.97 billion kronor from 11.06 billion in the same period last year, when two months included revenue from a former subsidiary, as cheaper tickets cut into margins with a 3.1 percent drop in the average earning per passenger.
"SAS has delivered the promised efficiency measures, with declining unit costs as a consequence," SAS chief executive Rickard Gustafson said in a
statement, adding however that "earnings were impacted by intense competition and strong price pressure."
The airline increased its passenger numbers by 8.4 percent and succeeded in lifting its load factor — which measures how full planes are — by 2.3 percent.
SAS has come under increasing pressure in recent years from low-cost rivals including Ryanair and Oslo-based Norwegian, Europe's third-largest budget airline.
The company announced a "final call" recovery plan in November 2012 which has included job cuts, salary reductions and administrative cutbacks.
Further savings worth 2.1 billion kronor would be put in place by 2017 to meet "changing competitive conditions for European aviation" chief executive Rickard Gustafson said.
SAS, which is 50-percent owned by the Swedish, Danish and Norwegian states said it has the "potential" to report a pre-tax profit for the 2014-2015 fiscal year "provided that the economy does not weaken", and that there is no change in falling jet fuel prices or other unexpected events.

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Airline SAS reports gigantic loss due to coronavirus

Scandinavian airline SAS says it has registered the biggest loss in the company’s history, due to a loss of trade resulting from the coronavirus.

Airline SAS reports gigantic loss due to coronavirus
Photo: Martin Sylvest/Ritzau Scanpix

The company’s results from November 2019 to October 2020 show a loss of 9.3 billion Swedish kronor (6.8 billion Danish kroner or 907 million euros).

The results were published early on Thursday.

In the previous accounting year, from November 2018 to October 2019, SAS posted a profit of 0.6 billion kronor (0.4 billion kroner or 58 million euros).

Covid-19 is the primary reason for the disastrous annual result, CEO Rickard Gustafson said.

“SAS is naturally no exception (from the coronavirus crisis), and our revenues in the current quarter and accounting year were badly affected by the ongoing pandemic,” Gustafson said.

Although demand improved during the summer, the return of high levels of infection spread in September and October and subsequent travel restrictions impacted the company.

READ ALSO: Sweden and Denmark dig deeper to save SAS