MIAMI – SAS-Scandinavian Airlines System (SK) feels the pinch as other airlines in the region from the COVID-19-related air traffic collapse.
According to a SAS press release, results for the first quarter of 2021 (Q1 November 2020 to January 2021), show a continuing negative trend.
Revenue dropped to US$296ml (SEK 2.28bl), against US$ 1.14bl the preceding year. Earnings for Q1 stand at US$ -228ml (SEK -1.936bl) down by US$ 94 (SEK 800ml) on a year-to-year basis. To face the crisis, SAS secured a US$ 273ml (NOK 1.5bl) fully guaranteed loan from the Norwegian Export Credit Guarantee Agency.
The capacity offered was reduced by 75% on year on year basis and by 29% compared to the same quarter in 2020. Passenger loads dropped to 5.3ml on year-to-year and by 29% on a quarterly basis.
The losses were offset by a cost reduction of approximately 60%. Part of the loss is due to the refund of unused tickets for an amount of US$ 247ml (SEK2.1bl). Personnel was reduced by 5000 units and staff-related costs contained by 45%.
SAS was able to manage liquidity to navigate the crisis with US$ 556ml (SEK 4.7bl) availability by the end of Q1. Also part of the increase in liquidity is the renegotiation of suppliers’ agreement and postponement of payment in 2021 for an amount of US$ 82.7 (SEK 700ml).
Some Good News
On the good news side, SAS has renewed an agreement with the charter partner Apollo thus securing revenues for US$ 400ml (SEK 3.4bl) on a three years basis extendable for a further two years. Apollo offers charter services from Sweden, Norway, and Danemark to destinations within Europe.
SAS CEO, Rickard Gustafson commented on the situation by saying, “the pandemic continues to have a severe negative impact on the whole aviation industry. An increase in the number of cases has led to more stringent travel restrictions, with a consequent reduction in demand during the quarter and stalled recovery for the entire travel industry. However, the development of vaccines and vaccination programs provides hope that restrictions will ease and that we will see an increase in travel toward summer 2021.”
SAS counts on the rapid and positive development of the crisis, particularly on the worldwide vaccination program, and expects a more normal traffic situation in 2022.
SAS Fleet, New CEO
Awaiting this normalization, SAS has sped up the process of its fleet renewal by alienating older and fuel-consuming aircraft to be replaced by more fuel-efficient new types. In the past three months, SAS has removed three Boeing 737 aircraft from its fleet and received delivery of three new Airbus A320neo.
In addition, as announced by SAS and Rickard Gustafson, the CEO shall be leaving the company on July 1, 2021, after ten years at the head of SAS. He will be taking over as CEO of one of the largest of Sweden’s industrial groups. Rickard Gustafson, as reported by Wtop news of January 2021, commented on its departure by stating “time has come for me to pass on the baton. It will happen during the first half of 2021.”
Featured image: Scandinavian Airlines SE-ROA Airbus A320-251N. Photo: Lorenzo Giacobbo/Airways