SOS For SAS?
Bigger loss for Scandinavian airline SAS
STOCKHOLM, Sweden - Scandinavian airline group SAS AB on Tuesday posted a first-quarter net loss of 1.08 billion kronor (euro115 million; US$181 million ), citing higher fuel costs and growing competition, and said it would slash 1,000 jobs to reduce costs.
The result was down from a net loss of 18 million kronor in the first quarter of last year.
Sales in the first three months of 2008 rose to 12.83 billion kronor (euro1.37 billion; US$2.15 billion), from 11.89 billion kronor in the same period last year, SAS said.
"The negative earnings trend we experienced in November and December last year continued in the first quarter of 2008," Chief Executive Mats Jansson said.
"The primary reason for this is the rapid rise in jet fuel prices to record high levels that could not be offset, while unit earnings fell as a result of further intensification of competition."
SAS said it would expand a previously announced restructuring program to generate savings of about 1.1 billion kronor (euro120 million; US$180 million) in 2008.
The airline group said it would cut 1,000 jobs and reduce its fleet by 11 aircraft as part of the package.
"The situation in the air-travel industry is serious. For this reason it is vital that we turn around the earnings trend," Jansson said.
SAS, which operates Scandinavian Airlines - the joint carrier of Sweden, Denmark and Norway - last year launched a savings package of 2.8 billion kronor (euro298 million; US$438 million), with the bulk of the savings to be made between 2008 and 2009.
forbes.com
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