STOCKHOLM (AFP) – Ailing Scandinavian airline SAS yesterday reported another quarter in the red, albeit a narrower loss, as it said it would press ahead with its cost-cutting plan.
The airline posted a net loss of SEK1.5 billion (USD155 million) in the second quarter, compared to a net loss of SEK2.4 billion a year earlier.
SAS said it was seeing positive signs as the number of passengers rose 28 per cent compared to the previous quarter.
“Looking back at the second quarter, we can see that demand improved as travel restrictions were eased,” SAS CEO Anko van der Werff said in a comment.
Revenue also grew by 27 per cent compared to the preceding quarter to SEK7 billion, up SEK5.1 billion compared to a year earlier, “but still 31 per cent below the second quarter in 2019, which was unaffected by COVID-19.
“Despite this positive development, SAS continues to face substantial structural cost challenges while also facing growing competition with substantially lower cost structures than SAS,” van der Werff said. In February, the airline launched a major cost-cutting plan dubbed “SAS Forward,” which included a “redesigned fleet” and a “refocussing” on long-haul flights.
The plan aims to reduce costs by SEK7.5 billion annually, with a “full transformation” of the business that will affect “its network, fleet, labour agreements and other cost structures.”
Yesterday, the airline said it was seeking to convert “SEK20 billion of debt and hybrid notes into common equity,” and was seeking to raise SEK9.5 billion in new capital.
“The success of the plan depends upon SAS attracting potential new capital from the capital markets and other sources and upon SAS fully achieving the targetted SEK 7.5 billion annual cost reduction by fiscal year 2026,” van der Werff said.
Hit hard by the pandemic, the airline already cut 40 per cent of its workforce, 5,000 staff, in 2020. SAS has benefitted from several aid and recapitalisation plans since the start of the pandemic, mainly funded by Sweden and Denmark, which each own 21.8 per cent of the company.