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It is usually around this time of year that SAS reports summer and late summer profits, money that will last through a long winter with weak profitability.
During the corona pandemic, losses have only increased throughout the year.
The period from August to October this year ended with a pre-tax loss of SEK 3.3 billion. In the same period last year, there was a profit of just over 1 billion SEK.
CEO Rickard Gustafson emphasizes in his comment in the quarterly report that the corona pandemic has weighed on the company since March, and that low demand for travel makes it impossible for SAS to achieve a positive outcome.
– Some demand was noted during the summer season, but when the number of detected infection cases increased in Europe and North America in September and October, new travel restrictions reversed the positive trend.
It says that about 40 percent of SAS markets had travel restrictions at the beginning of the fourth quarter.
– A figure that rose to more than 65 percent at the end of the quarter.
For the entire financial year from November 2019 to October 2020, there was a historical pre-tax loss of SEK 10.2 billion. In comparison, there was still a profit close to 800 million SEK the previous year.
If non-recurring effects are excluded, the annual result was minus SEK 8.6 billion.
Won’t rule out Norwegian survival
During the presentation of the quarterly report, CEO Rickard Gustafson was asked if the market will change, if competitor Norwegian does not fully recover through the corona pandemic.
– I don’t want to rule out that Norwegian will continue to exist. I’m not surprised that Norwegian survives and operates in the Norwegian domestic market, or perhaps even the Scandinavian market. And then there are still a lot of players, Gustafson replied.
In addition, he noted that in any case he will not have much to say about whether Norwegian survives or not.
– Every time there is a gap in this market, it fills in a nanosecond. We must prepare for the competition, regardless of whether Norwegian survives or not.
Collection until 2022
Gustafson says in the report that SAS will work to return to a position that is both environmentally and financially sustainable until the crown situation ends.
– Although we are encouraged by recent developments in the development and distribution of a covid-19 vaccine, the demand for flights in the market remains uncertain, making it impossible to provide any guidance on the financial result. for the next financial year, he says.
He writes that 2021 will also be a difficult year.
– We expect weak operating cash flow in the first quarter of 2021, due to low customer demand, combined with the higher rate of repayments, he says, adding:
– Our opinion remains that the recovery of the aviation industry will continue until 2022, until demand reaches normal levels, and that we will return to pre-covid-19 levels a few years later.
Slightly fuller planes, but bigger losses
For SAS, the 2019/2020 financial year started roughly as planned, then money flowed in from March.
- I first quarter from November to January, there was a deficit of around one billion SEK. CEO Rickard Gustafson said there was still hope for a positive full-year operating result when the figures were released in late February, but for the first time, the crown was highlighted as a major risk factor.
- I second bedroom From February to April, Korona had parked most of the planes and there was a pre-tax loss of SEK 3.7 billion. In April, the decrease in passengers was 96 percent compared to the same month of the previous year.
- I third quarter From May to July, which is usually the peak season, the pre-tax deficit was SEK 2 billion. The fall in passengers in May was 94 percent, in June it was 86 percent and in July it was 76 percent.
- I fourth trimester from August to October, there was a new deficit of billions. The fall in passengers has been between 73 and 78 percent compared to the previous year.
SAS has managed to capture some of the regular traffic throughout the year, despite a new wave of infections this fall, and most recently, last week, a large escalation of the flight offer was launched into the Christmas holidays, with a total of 129 routes to 82 destinations.
It’s the complete opposite of Norwegian, which only has six of the 140 aircraft in operation during the winter.
Kept alive by the states
The Swedish and Danish states, as the main owners, have contributed around SEK 11 billion after the summer, and this will ensure that the company has the money to overcome the crisis, given forecasts that most of the market will return in the second half of 2021 and will gradually enter. in 2022.
SAS has obtained access to government assistance also in Norway through loan guarantees and, through NHO, Luftfart has also requested compensation for lost income in the form of cash support. the government will consider such a package towards the end of January.
Throughout the year, SAS has excited customers that many have been waiting for months for reimbursement for canceled trips, and Senior Manager Rickard Gustafson deeply apologized to those affected in August this year.
During the crisis, SAS had to lay off all pilots employed after 2001, after the pilot associations said no to a solution that could have saved many of the jobs, and many of the pilots fly with layoffs until the new Year.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content can only be done with written permission or as permitted by law. For more terms, see here.
