Scandinavian Airlines Airbus A321. By Rob Finlayson
Scandinavian Airlines (SAS) reported a fiscal first-quarter net loss of SEK630 million ($98.8 million), reversed from a SEK2.5 billion loss in the year-ago period.
SAS president and CEO Rickard Gustafson said strong progress had been made toward the airline’s 4 Excellence NG turnaround plan; however, he added: “At the same time, we must confirm that SAS reported a loss for the quarter, and although seasonal effects are amplified by the new fiscal year, we are far from satisfied. Accordingly, we remain focused on completing the action plan and our aim to achieve a positive income before tax for the full-year remains firmly in place.”
Revenue rose 3.2% to SEK9.6 billion, producing a loss before tax and non-recurring items of SEK801 million, widening from a SEK656 million loss in the prior November to January quarter. Gustafson said this was “in line with or somewhat better than our expectations late last year”.
Traffic rose 4.3% during the quarter. Yield was up 1.6%, while CASK ex-fuel decreased 2.7% over the three-month period. In January, when the new collective agreements began to kick in, unit costs ex-fuel declined 6.9%.
“We are putting another intensive quarter behind us,” Gustafson said. “We have created the means to strengthen our competitiveness, we are well on our way to completing the restructuring plan and we have secured our financial stability. Overall, we have now provided ourselves with greater control of our fate at the same time as the 4XNG actions are being implemented as planned. Provided that there are no significant unforeseen external events and that jet fuel prices remain stable around current levels, we believe that there is a possibility of achieving a positive EBIT margin in excess of 3%, and a positive EBT for the full-year 2012/2013.”
During the quarter, SAS made several key steps toward its restructuring, including the finalization of new collective agreements, securing SEK3.5 billion in new credit lines, reducing its pensions liability by SEK19 billion, signing a letter of intent to sell its ground handling operations to Swissport, sealing an engine sale and lease back deal, which will boost its liquidity by SEK700 million, agreeing further call center outsourcing and the centralization of some administrative functions in Stockholm.