SAS SWOT: final call to establish a sustainable Scandinavian Airlines

SAS has been through many restructuring programmes and capital raisings over a number of years. Yet it still has high unit costs and poor labour productivity, is loss-making and has a weak balance sheet. In 1QFY2013 (Nov-2012 to Jan-2013), the group's loss before tax and non-recurring items widened to SEK801 million from a SEK656 million (EUR78.7 million) loss a year earlier. Nevertheless, it continues to target a positive pre-tax result and an EBIT margin of more than 3% for FY2013.

The Nordic region contains a more efficient long-haul operator (Finnair) and is experiencing increasing penetration by short-haul low-cost operators from elsewhere in Europe. Also, in Norwegian Air Shuttle, SAS has a low-cost local operator that competes with it on both short-haul and (from this summer) long-haul. In Nov-2012, CEO Rickard Gustafson called the '4Excellence Next Generation' plan, which aims to achieve SEK3 billion (EUR360 million) of annual savings by 2015, a "final call if there is to be a SAS in the future".