Pilots’ strike contributes to heavy losses for SAS

Ailing Scandinavian carrier SAS, which filed for bankruptcy protection in the United States in July, widened its losses in the third quarter after a pilot strike, the company said Friday.

Stock photo of parked SAS planes.
SAS said that a pilots' strike contributed to heavy losses for the firm. File photo: SAS planes are pictured at Arlanda airport, north of Stockholm. Photo by Jonathan Nackstrand/ AFP.

The airline posted a net loss of 1.84 billion kronor ($170 million) for the May-July period, compared to a loss of 1.33 billion kronor a year earlier.

Earnings were “severely affected” by the 15-day pilot strike between July 4-19, which led to the cancellation of some 4,000 flights affecting more than 380,000 passengers, the company said in a statement.

However, “overall underlying demand for travel was healthy during the summer quarter” and SAS registered an increasing number of passengers as Covid restrictions were lifted across the globe.

Revenue more than doubled during the quarter, to 8.58 billion kronor from 3.98 billion kronor a year earlier.

The company said it was “cautious” in its outlook for the coming quarter “due to the prevailing uncertainties around the world”.

“Traffic to and from Asia remains affected by Covid-19 restrictions as well as by the geopolitical situation”, it said.

READ ALSO: Airline Norwegian gets post-Covid boost to profits and passenger numbers

SAS management announced a savings plan in February aimed at ensuring the survival of the company, including cost-cutting of 7.5 billion kronor and dubbed “SAS Forward”.

The pilot strike, which cost the carrier between $9 million and $12 million a day, was a protest against salary cuts demanded by management as part of the restructuring plan.

SAS Forward was supplemented in June by a plan to increase capital by nearly one billion euros ($1.04 billion).

Earlier this month, SAS said it had secured a $700 million loan, entering into a debtor-in-possession (DIP) financing credit agreement with funds managed by Apollo Global Management.

Denmark and Sweden are SAS’ biggest shareholders with 21.8-percent stakes each.

SAS employs around 7,000 people, mainly in Denmark, Norway and Sweden. It has suffered a string of losses since the start of the coronavirus pandemic in early 2020.

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‘Weak numbers’: Scandinavian airline SAS files loss in latest result 

Economic headwinds are continuing for Scandinavian airline SAS, which has posted a loss of 2.7 billion Swedish kronor for the first quarter of this year.

‘Weak numbers’: Scandinavian airline SAS files loss in latest result 

Scandinavian airline SAS has posted a loss of 2.7 billion Swedish kronor (1.8 billion Danish kroner) for the last three months ending in January.

The loss is around 300 million kronor more than the one registered in the same period last year, Danish news wire Ritzau reports.

The result covers the period from November to January.

Although revenue increased by 2.3 billion kronor compared with 12 months earlier, profit did not keep pace due to higher costs.

SAS has been in a restructuring process since summer 2022 as part of its SAS Forward plan, and has applied for Chapter 11 bankruptcy protection in the US.

CEO Anko van der Werff cited an increase in passenger numbers by 48 percent compared to last year as a positive element of the result.

“We are happy that so many passengers are returning to SAS,” he said in the statement.

Around 4.5 million passengers flew with SAS in the last quarter. A year prior, travel was still largely restricted due to the coronavirus pandemic.

But SAS’ failure to raise its profit amid the increase in passengers is disappointing for the airline according to stock market analyst Jacob Pedersen of Sydbank.

“You would think that SAS would earn more money when their passenger numbers go up by almost 50 percent but they didn’t,” Pedersen told Danish news wire Ritzau.

“In that sense these are really weak numbers,” he said.

But the company is showing self-confidence by raising its economic forecast for this year, he also said.

“Especially when you consider that there’s an outlook for in recession in Europe later this year,” he said.

“Things don’t usually go well for airlines during periods of recession,” he said.

SAS expects its revenues next year to approach the level seen prior to the pandemic.

In 2025 the company expects to earn “more than 49 billion Swedish kronor” according to its latest financial report. That is an adjustment upwards from previous expectations.