SAS Q3 earnings quashed by strike and ‘ramp-up challenges’

Scandinavian Airways (SAS) reported “wholesome” journey demand for the third quarter however earnings have been “severely affected” by a 15-day pilot strike in July and wider operational disruptions, in accordance with the provider.  

In an earnings report launched on Friday the provider reported a lack of SEK 1,848 million (€178 million) between 01 Might and 31 July, a decline of €97 million in comparison with the earlier quarter, which was largely attributed to the July pilot strike that pressured the cancellation of some 4,000 flights.

Earnings earlier than curiosity and tax (EBIT) ended at unfavourable SEK 2 billion (€189 million), a decline of roughly €38 million in contrast with final quarter.

The provider noticed a 27 per cent improve in capability in comparison with the earlier quarter, with load issue reaching roughly 78 per cent. Whole working bills ended at SEK 9.7 billion (€914 million) and complete working income got here in at SEK 8.6 billion (€810 million) for the quarter. Whole income elevated 22 per cent in contrast with the second quarter, an enchancment of roughly SEK 4.6 billion in comparison with final 12 months, however nonetheless 37 per cent under the third quarter in 2019. 

As BTN Europe beforehand reported, the provider filed for chapter 11 bankruptcy protection within the US on 05 July, a day after the strike started. 

In a press release SAS president and CEO, Anko van der Werff, mentioned the quarter was impacted by “main occasions that influenced the general end result”. Along with the prolonged strike, he mentioned the provider skilled “main operational disruptions” that affected all the aviation trade throughout Europe.

Previous to the publication of the Q3 earnings report, the provider acknowledged the pilot strike had “severely impacted” its liquidity and monetary place. To this point, the monetary impression of the motion is SEK 1.4 billion (€132 million).

Earlier this month, nonetheless, the airline secured US$700 million (€696 million) in bridge financing with Apollo International Administration.

“This substantial financing dedication is a vital milestone in our transformation and it offers us a robust monetary place to assist our operations all through the chapter 11 course of,” added van der Werff, who stays cautious about the upcoming winter season.

“The transformation of SAS has to proceed to adapt to the brand new market situations so as to have the ability to stay versatile, aggressive and financially sturdy for the long run,” he mentioned, including that the provider is getting ready for “substantial recruitments and rehirings” to satisfy future demand.