Airline SAS expects limited economic impact from coronavirus

Airline SAS expects limited economic impact from coronavirus
A SAS plane is refuelled at Oslo Gardermoen airport. Photo: Lefteris Karagiannopoulos/Reuters/Ritzau Scanpix
Scandinavian airline SAS said on Wednesday that its net loss widened in the first quarter as a result of currency effects and a change in accounting standards, and forecast that the economic impact from the novel coronavirus would be limited.

SAS said in a statement that it booked net loss of 861 million Swedish kronor (81.5 million euros) for the three months to January, compared with a bottom-line loss of 469 million kronor a year earlier.

In late January, the carrier had said it was suspending flights to Beijing and Shanghai following the outbreak of the coronavirus COVID-19.

It subsequently announced that the suspension would remain in place until the end of March.

Presenting its first-quarter earnings, the company estimated that the cancelled flights would result in a loss in revenues of 200 million kronor.

“As long as the COVID-19 outbreak is contained in scope and the suspension of flights is isolated to the winter season, this should only have a marginal impact on our earnings,” said chief executive Rickard Gustafson.

First-quarter revenues increased by 3.2 percent to 9.7 billion kronor, driven primarily by an increase in passenger numbers.

However, the strong revenue growth was offset by negative currency effects, caused by weak Swedish and Norwegian currencies.

READ ALSO: Why Norway’s krone could keep losing value

In addition, the results were affected by the adoption of IFRS 16accounting standards, which resulted in asset writedowns and some expenses no longer being taken into account.

Shortly after the start of trade on the Stockholm stock exchange, SAS shares were showing a loss of 6.3 percent.

 


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