Scandinavian airline SAS on December 18 posted a bigger-than-expected fiscal fourth-quarter pretax profit before one-off costs, helped by savings, and said it may post a profit before nonrecurring items for the 2014/2015 fiscal year. Pretax profit before extraordinary items in the August through October period rose to 789 million Swedish crowns ($102.8 million) from a year-earlier 601 million and a mean forecast in a Reuters survey of analysts for 622 million.
Restructuring costs and other non-recurring items amounted to a net 1.24 billion crowns, against a poll forecast for 359 million. SAS, 50 percent owned by Sweden, Denmark and Norway, has been struggling for years with overcapacity and tough competition from budget carriers such as Ryanair and Norwegian. The company has been through a series of restructuring programmes in recent years and has had to tap its owners for more than 10 billion Swedish crowns ($1.34 billion) in additional capital since 2009. The Swedish government said in November it would not bail SAS out again.
"SAS has delivered the promised efficiency measures, with declining unit costs as a consequence. In parallel, passenger growth was strong and the load factor posted a year-on-year improvement for the eighth successive month," SAS Chief Executive Rickard Gustafson said. "However, earnings were impacted by intense competition and strong price pressure. This trend is expected to continue." SAS said it has potential to post a profit before tax and nonrecurring items in the 2014/2015 fiscal year.
"This is provided that the economy does not weaken, that the trend continues in terms of reduced capacity and lower jet fuel prices, is maintained, that exchange rates are not subject to further deterioration and that no unexpected events occur," it cautioned.