SAS First Quarter Loss Doubles
SAS Scandinavian Airlines reported first quarter results showing a doubling of net loss to SEK556 million kronor (USD$61.4 million).
The operating loss rose to SEK577 million, from SEK186 million the previous year period, primarily due to higher jet fuel costs and increased price pressure. Revenue in the quarter to end January was up 8.2 percent at SEK8.96 billion, with expenses of SEK9.5 billion.
A bright spot was the number of passengers carried, 6.4 million, a 9 percent increase, in what is a seasonally weak quarter.
Revenue in revenue passenger km terms was up 18.2 percent on an available seat km capacity increase of 11.2 percent. Load factor was up 4.3 percentage points at 72.7 percent as a result.
Passenger yield, adjusted for currency fluctuation, was down 11.6 percent, however.
Chief executive Rickard Gustafson said that the quarter “as expected, was worse than the preceding year.” He said “the inadequate profitability emphasises the importance of SAS mobilising to address the cost disadvantages that we have compared with more recently established competitors.”
SAS will establish an air operator certificate in Ireland to take advantage of lower staffing costs outside Scandinavia. It will also add operational bases in London and Spain during the year.
SAS sold its Cimber subsidiary to CityJet in January, with the Irish carrier operating flights on SAS’ behalf. With the sale of Cimber and its CRJ900 aircraft, SAS has now reduced its European operating fleet to Boeing 737s and Airbus A320-family aircraft.
Looking forward, SAS said it will increase capacity in Scandinavia in 2016/2017, but at a slower rate than in the previous fiscal year. It expects competition and yield pressure to continue and jet fuel costs to increase.
“Despite market uncertainty and a weak start to the fiscal year, SAS expects to be able to deliver a positive income before tax and non-recurring items for the 2016/2017 fiscal year,” the airline said.