SAS announces even more cutbacks after deep losses

Shares in SAS gained 0.5% yesterday as the carrier announced plans to launch an additional SEK2 billion (EUR196 million) cost cutting programme to generate "sustainable competitiveness".

This programme, which is in addition to SEK4.5 billion (EUR440 million) in savings under 'Core SAS', includes establishing “fully competitive” collective agreements for flight deck and cabin personnel, a principle for optimising production to make greater use of the most competitive production resources and further efficiency enhancements in the Group's administration. These measures will entail further reductions corresponding to 1,000-1,500 full time employees.

SAS Group’s revenue slumped 15.2% in three months ended 30-Jun-2009, while operating costs fell 12.1%, with an operating loss of EUR92.2 million, compared to a profit of EUR14.7 million in the previous corresponding period. Group passenger numbers fell 17.1% to 6.8 million, while load factor rose 0.3 ppts to 73.6%. The carrier stated the yield trend was negative during the second quarter and pressure on yield will “probably increase during the second half of the year for the current cost programme”.

President & CEO, Mats Jansson, stated, “uncertainty with regard to when recovery will begin remains considerable. As a consequence, passenger growth in the market is expected to be negative during 2009. Uncertainty with regard to the price of jet fuel, the trend in the USD exchange rate and the effects of pandemics remains”.

Elsewhere, Lufthansa, British Airways and Air France-KLM had a positive day, rising 1.3%, 4.2% and 4.4%, respectively.

Europe selected airlines daily share price movements (% change): 12-Aug-09