SAS lowers losses but remains in the red for first quarter

May 10, 2011, 7:46 GMT

Stockholm - The SAS Group, operator of the joint carrier Scandinavian Airlines, Tuesday reported a net loss for the first quarter of 2011, partly over higher fuel costs.

The net loss of 373 million kronor (59 million dollars) compared to a net loss of 712 million kronor in the corresponding business period in 2010.

Turnover in the quarter was 9.2 billion kronor, down 300 million kronor year-on-year.

The economic recovery in its Nordic homebase continued and despite the rise in fuel prices, the group still hoped to report a pre-tax profit for the full year although this was challenging, chief executive Rickard Gustafson said.

Another factor SAS was facing was overcapacity 'in certain markets, particularly on European routes from Denmark and in the Swedish market,' he said.

To offset higher fuel prices, SAS has introduced a fuel surcharge.

The group flew 6 million passengers during the quarter, up about 6 per cent.

During the year, SAS expected to conclude its cost-saving programme, known as Core SAS, launched in 2009. It was expected to yield savings of 900 million kronor in 2011 and SAS said it was 'working on its future approach.'

The SAS Group had some 15,000 employees at the end of March, down from 15,800 year-on-year.

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