SAS: confidence grows after sharp increase in 3Q profits

SAS made a bigger profit in 3QFY2013 (May-Jul) than in the same period a year ago, building on the positive momentum developed in 2Q, when it narrowed its losses after reporting wider losses in 1Q. Its '4Excellence Next Generation' restructuring plan delivered further savings in the quarter and SAS has made good progress with most of the key savings and liquidity measures identified in the plan. It has confidently reiterated its FY2013 target of positive earnings.

SAS has also announced plans to order new long-haul aircraft and should complete the sale of Wideroe and the outsourcing of ground-handling in the near future. Focusing the network around the needs of frequent flyers and investing in cabin refurbishment should provide some differentiation from, and appeal relative to, LCC competitors on both short-haul and long-haul. Nevertheless, SAS is still a high-cost carrier and remains vulnerable to price-based competition.