SAS incurs $69 million second quarter loss, blames April airspace closures

SAS A330. Photo: Courtesy, Airbus.

SAS Group's SEK502 million ($68.6 million) second quarter net loss, more than halving its SEK1.05 billion loss in the year-ago period, was attributable to the volcanic-ash-related airspace closures in April that cost it SEK790 million in lost revenue, the airline company said yesterday.

SAS said it would have earned a second quarter net profit of SEK464 million absent the airspace closures. "The ash cloud and the subsequent closure of airspace had a significant impact on net income for the second quarter and greatly affected our customers," said CEO Matts Jansson, who recently announced his intention to step down this fall (ATW Daily News, Aug. 11).

He said the company will be "well positioned to face the future" following his exit owning in part to the "Core SAS" cost reduction program that has achieved SEK5.6 billion in annual savings in the year and half it has been in effect.

He asserted that the airline must stay focused on cost control going forward: "We are experiencing intense competition, which entails continued pressure on yields. It is now vital that we continue our efforts to cut costs." He said that during the first six months of 2010, "we lowered unit cost by 6.7% despite reduced capacity and the [volcanic-ash-related] major disruptions to services."

Second quarter revenue lowered 18.3% to SEK9.98 billion while operating loss was SEK349 million, narrowed from a SEK942 million deficit in the year-ago period.

SAS Scandinavian Airlines posted a second quarter operating loss of SEK74 million, narrowed from a SEK941 million operating deficit in the year-ago period, on an 18.6% decline in revenue to SEK8.73 billion. Blue1's second quarter revenue fell 10% to SEK459 million while Wideroe generated SEK845 million in revenue for the period, down 3.4%.

Consolidated passenger traffic for the three months ended June 30 fell 6.3% to 6.61 billion RPKs on an 8.5% cut in capacity to 8.77 billion ASKs, producing a load factor of 75.4%, up 1.8 points.

SAS Group's fleet totaled 239 aircraft as of June 30 including 168 operated by SAS Scandinavian. Its mixed fleet is led by 67 737NGs.