Cost Cuts Cushion Quarterly Loss for Airline SAS

By Anna Ringstrom

The pandemic has seen air travel collapse, plunging the industry into crisis. SAS, whose biggest owners are the states of Sweden and Denmark, in 2020 agreed a 14 billion Swedish crown ($1.7 billion) recapitalisation plan to help keep it going.

SAS fiscal second-quarter loss before tax was 2.36 billion crowns ($284 million) against a year-earlier 3.72 billion loss. Costs were 54% lower than a year ago, limiting the loss as sales tumbled to 1.93 billion crowns from 5.26 billion.

“Infection, delayed vaccinations and continued stringent travel restrictions have led to a slower than hoped for recovery,” acting Chief Executive Karl Sandlund said in a statement.

“However, SAS is ready to welcome our customers back on board as travel restrictions ease ahead of the important summer season.”

SAS said that for the summer it was opening 180 direct routes and increasing capacity on domestic routes in Scandinavia.

“The uncertainty around the pandemic means many customers book their tickets with shorter notice, which makes it a bit harder for us to predict the summer. But we do see higher forward bookings than we did earlier in the spring,” Sandlund told Reuters.

The company on Wednesday said it had secured loan guarantees totalling 3 billion crowns from Sweden and Denmark as a liquidity buffer complementing ongoing activities to lower costs and strengthen liquidity.

Sandlund said in an interview that SAS has enough liquidity and that the new guarantees constituted extra security ahead of potential further waves of the pandemic.

SAS has appointed Anko Van der Werff as new chief executive from July after its previous CEO resigned in January. Van der Werff leaves the top job at Colombias struggling Avianca Holdings.

Shares in SAS were up 1.5% at 0740 GMT, taking a year-to-date rise to 6%. ($1 = 8.3048 Swedish crowns)

(Reporting by Anna Ringstrom, editing by Simon Johnson and Keith Weir)