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Earnings

SAS eyes more cost cuts as third-quarter profits are hit by fuel prices, strike

Key Points
  • The carrier, partly owned by Sweden and Denmark, while Norway has sold its stake, repeated that it will be challenging to reach a positive result before tax for the full year.
  • Third-quarter profit was dented by higher fuel costs, a weaker crown, and a pilot strike between 26 April and May 2, which led to some 4,000 cancelled flights affecting more than 370,000 passengers.

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Scandinavian airline SAS said on Tuesday it would look at additional cost-cutting measures beyond 2020 after reporting a drop in third-quarter earnings due to a pilot strike, high fuel prices and cut-price competition.

The carrier, partly owned by Sweden and Denmark, while Norway has sold its stake, repeated that it will be challenging to reach a positive result before tax for the full year.

Third-quarter profit was dented by higher fuel costs, a weaker crown, and a pilot strike between 26 April and May 2, which led to some 4,000 cancelled flights affecting more than 370,000 passengers.

It was partly compensated by increased passenger revenue, SAS said on Tuesday, but it added that costs were still too high.

"This means that we need to look at additional initiatives beyond 2020," it said.

Struggling with the rising cost of fuel and competition from the likes of Norwegian Air and Ryanair, SAS is renewing its aging fleet and has been restructuring for years to slash costs.

The airline's current efficiency improvement program targets 3 billion crowns ($312.34 million) in savings by 2020.

SAS pretax profit was 1.49 billion crowns in the May-July period, down from 2.03 billion profit a year earlier. The average forecast according to Refinitiv data based on two analysts was for a pretax profit of 1.44 billion.