SAS report quarter loss

Dino D'Amore
By Dino D'Amore March 18, 2014 17:48

SAS report quarter loss

SAS Group has reported a net loss of SEK112 million ($17.5 million) for the quarter November 2013 to January 2014, marking a significant improvement from the SEK588 million net loss recorded for the same period in the previous year.

The airline said the results were “as expected,” with comparative figures for the year-ago period including the results of regional carrier Widerøe which was sold in September last year.

SAS president and CEO Rickard Gustafson said: “As expected, this has been a weak quarter in terms of earnings. The first quarter is seasonally the weakest, but this quarter was also marked by overcapacity and lower growth, which put pressure on margins across the entire market. Although the result is as expected, it is not satisfactory.”

He said SAS would continue its drive for long-term sustainable profitability by reinforcing three strategic priorities: establishing an efficient operational platform, winning the battle for Scandinavia’s frequent travelers, and investing for the future.

During the quarter, revenue fell to SEK7.9 billion from SEK9.6 billion during the same period in the previous financial year.  However, operating income was up to SEK132 million, reversing an operating loss of SEK525 million in the year-ago period.

Payroll and other operating costs were down to SEK1.5 billion from SEK3.2 billion and SEK5.5 billion from SEK6.1 billion, respectively. Unit costs excluding jet fuel fell 3.2%.

The total number of passengers carried (scheduled and charter) was down 0.4% year-on-year, to 5.61 million for the November to January quarter from 5.63 million during the year-ago period. RPKs were down 0.2% to 6.34 billion from 6.35 billion during the same period the previous year, while ASKs were up 2.8% to 9.3 billion in the first quarter of the current financial year from nine billion during the year-ago period. Load factor for the quarter fell two percentage points to 68.2% from 70.2% during the year-ago quarter.

In terms of scheduled traffic alone, RPKs and ASKs were both up 0.7% and 3.4%, respectively.  However, scheduled passenger numbers were marginally down (0.2%) to 5.42 billion from 5.43 billion. Load factor and yield were also both down, with load factor down 1.8 percentage points to 66.3% from 68.1% during the year ago period, and passenger yield down 5.6% for the quarter.

Gustafson said: “Our forecast for the full-year remains. During the year, the expected impact on earnings from the restructuring program is SEK1.2 billion, and bookings at the beginning of the second quarter were at the same level year-on-year. Provided that the market conditions, in terms of capacity, jet fuel and exchange rates, do not decline any further and that no unexpected events occur, potential exists to post a positive EBT, excluding the positive effect from the changed pension terms, also in the 2013/2014 fiscal year.”

Dino D'Amore
By Dino D'Amore March 18, 2014 17:48
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