Scandinavian airline SAS posted a first-quarter loss, hurt by a weak economic environment and rocketing jet fuel prices.
SAS has been struggling for years with higher costs than no-frills competitors Ryanair and Norwegian Air Shuttle.
The airline, half-owned by Sweden, Norway and Denmark, made a pretax loss of SEK1.1 billion Swedish kronor (USD$163 million).
"The negative trend was due to sharp increases in jet fuel prices, the uncertain economic climate and the fact that the earnings effects of the 4Excellence programme will not be generated until the latter part of 2012," chief executive Rickard Gustafson said in a statement on Thursday.
The first quarter also tends to be seasonally weak for airlines.
Surging jet fuel costs and the bankruptcy of Spanair, in which SAS has a stake, have added to the airline's woes and it made a loss of SEK1.6 billion kronor (USD$238 million) last year.
With Europe's economy weighed down by the debt crisis and austerity measures, turning a profit this year will be challenging.
"2012 is difficult to assess due to the uncertain business climate, continued intense competition and high fuel prices," Gustafson said.
The group, in the middle of a SEK5 billion kronor savings programme, predicted passenger growth of 5 to 7 percent and said it expected continued pressure on its yield this year.
Its cost savings programme should start generating effects in the second half of the year while cash flow should also strengthen in the second quarter following a deal to sell six properties at airports in Sweden.