ATW Daily News

SAS reports first net profit in two years

Friday November 6, 2009

SAS Group posted its first quarterly profit since the 2007 third quarter, a SEK152 million ($21.5 million) surplus in the three months ended Sept. 30 that represented a reversal from the SEK1.99 billion deficit suffered in the year-ago period.

The company credited cost and capacity cuts achieved through its Core SAS program, rising load factor and a SEK427 million gain from the sale of its stake in bmi to Lufthansa (ATWOnline, Oct. 2). Income before nonrecurring items in continuing operations fell 87.7% year-over-year to SEK37 million.

President and CEO Mats Jansson said that Core SAS, launched in February, contributed SEK1.3 billion to SAS's bottom line through September and that the company is "continuing the implementation. . .with full vigor." The total impact over 2009-10 is expected to be SEK3.9 billion, and 1,884 fulltime employees have left the company so far, he said.

Group revenue fell 16.6% to SEK11.08 billion and operating income rose 38.5% to SEK259 million from the SEK187 million reported in the 2008 third quarter. Its airlines transported 6.2 million passengers, down 14.7%, while RPKs fell 16% to 6.87 billion. Capacity declined 18.4% to 8.96 billion ASKs and load factor rose 2.2 points to 76.7%.

SAS Scandinavian Airlines suffered a SEK531 million operating loss, widened from a SEK77 million deficit in the year-ago quarter, as revenue fell 19.5% to SEK6.89 billion. Traffic slid17.3% to 6.32 billion RPKs on a 20% cut in capacity to 8.14 billion ASKs, lifting load factor 2.6 points to 77.6%. The Blue1 subsidiary reported a SEK56 million operating loss before nonrecurring items while Wideroe was SEK6 million in the black. The group had 257 aircraft on Sept. 30--212 with SAS, 30 with Wideroe and 15 with Blue1.

Nine-month loss of SEK1.64 billion was 54% improved from the SEK3.57 billion deficit reported in the first nine months of 2008. Operating loss, however, deepened to SEK1.67 billion from SEK414 million.

SAS said that "the existing cost gap relative to relevant competitors will diminish but not close completely" as a result of Core SAS and that a "large part" of the remainder "is associated with collective agreements." Yesterday it said negotiations with cabin crew in Sweden and Norway and ground staff in Denmark have produced SEK130 million in savings. It has not reached agreements with its three pilot unions or Danish flight attendants. "A number of counter demands have been made in the final stages of negotiations, which the SAS management and board. . .cannot accept," it said.

by Brian Straus

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