SAS SWOT: Scandinavia's biggest airline by seats makes best return in years, but challenges remain

SAS' results for the year to 31-Oct-2017 reveal its best result since 2009, and a return on invested capital above its target for only the second time in at least a decade.

However, its FY2018 outlook indicates no further improvement. This throws the spotlight on the challenges faced by SAS in achieving consistent returns in its very competitive markets.

SAS is the biggest airline in Scandinavia by seat share, but has been overtaken by Norwegian by total passenger numbers. It has a strong brand, particularly among the region's frequent flyers, but its cost base is still too high by comparison with the LCCs against which it competes. Its long haul network is small, but has fairly robust niche routes, and its long haul offer is supplemented by Star alliance membership.

CEO Rickard Gustafson has done well to reshape the corporate structure of SAS, to lower its costs, and improve its balance sheet and profitability since his arrival at the airline in 2011. His decision to open SAS' first bases outside Scandinavia, in London and Málaga, shows the kind of creative thinking needed to survive and thrive.

This report considers SAS' strengths, weaknesses, opportunities and threats.