Friday, 8 May 2020

SAS Traffic figures for April 2020 make grim reading for company as it sheds 5000 jobs

Scandinavian Airline System saw its scheduled capacity drop dramatically during April its latest figures show. Down nearly 95% compared to last year as a result of the ongoing COVID-19 pandemic. During April, only a very limited network in Norway and Sweden was maintained y the carrier as it struggled to cope with the massive downturn in business and various travel bans and restrictions.

The airline has also decided that it will shed up to 5000 of its workforce as it gets to grips with the current situation and the incredible uncertainty over the future operations. Although, in the last few days, the airline has been thrown a lifeline after it signed a SEK 3.3 billion three-year revolving credit facility agreement, 90% guaranteed by the Swedish and Danish governments.

“We continue to face challenging times that are radically impacting our business.  Even though no one can foresee exactly how passenger demand will evolve in the coming months and years, it is clear that it will take a much longer time than previously anticipated. In our view, it will take until 2022 before demand starts to reach pre-COVID-19 levels.

“The current situation forces us to take all possible measures to reduce costs and preserve cash to be able to emerge from this crisis as a sustainable, profitable and vital part of Scandinavian infrastructure.  Given the time it will take to ramp up production, we have unfortunately had to initiate processes to reduce the size of our future workforce by up to 5,000 full-time positions.

“As part of our ongoing work to safeguard our future, I’m grateful and pleased that we now have secured the SEK 3.3Bn revolving credit facility guaranteed by the states of Sweden and Denmark. This additional liquidity will, alongside our initiated cost reduction measures, give us the time needed explore further opportunities and financial support to safeguard our business,” says Rickard Gustafson, CEO SAS.

SAS scheduled trafficApr20Change1Nov19- Apr20Change1
ASK (Mill.)203-94.5%16 665-23.9%
RPK (Mill.)54-98.0%10 763-28.8%
Passenger load factor26.6%-47.9 p.p.64.6%-4.5 p.p.
No. of passengers (000)94-95.6%9,243-26.8%
Geographical development, scheduleApr20            vs.           Apr19Nov19- Apr20      vs.     Nov18-Mar19
SAS charter trafficApr20Change1Nov19- Apr20Change1
ASK (Mill.)30-78.6%848-17.3%
RPK (Mill.)9-93.0%739-20.7%
Load factor28.4%-57.8 p.p.87.2%-3.7 p.p.
No. of passengers (000)1-96.7%242-19.6%
SAS total traffic (scheduled and charter)Apr20Change1Nov19- Apr20Change1
ASK (Mill.)233-93.9%17 513-23.6%
RPK (Mill.)62-97.8%11 503-28.3%
Load factor26.8%-48.1 p.p.65.7%-4.3 p.p.
No. of passengers (000)95-95.7%9,485-26.6%
1 Change compared to same period last year. p.p. = percentage points
Preliminary yield and PASKApr20Nominal changeFX adjusted change
Yield, SEK1.64+66.5%+66.4%
PASK, SEK0.44-40.6%-40.6%
Punctuality (arrival 15 min)97.2%
Change in total COemissions, rolling 12 months-12.8%
Change in COemissions per available seat kilometer-3.2%
Carbon offsetting of passenger related emissions24%
RPK – Revenue passenger kilometers
ASK – Available seat kilometers
Load factor – RPK/ASK
Yield – Passenger revenues/RPK (scheduled)
PASK – Passenger revenues/ASK (scheduled)
Change in COemissions per available seat kilometers – SAS passenger related carbon emissions divided with total available seat kilometers (incl. non-revenue and EuroBonus), rolling 12 months
Carbon offsetting of passenger related emissions – Share of SAS passenger related carbon emissions compensated by SAS (EuroBonus members, youth tickets and SAS' staff travel)
From fiscal year 2020 we report change in CO2 emissions in total and per Available Seat Kilometers (ASK) to align with our overall goal to reduce our total CO2 emissions by 25% by 2030, compared to 2005.

The airline also recently confirmed it had signed a SEK 3.3 billion three-year revolving credit facility agreement, 90% guaranteed by the Swedish and Danish states.

Since the announcements from the Scandinavian governments on credit guarantees to airlines, SAS has worked with four Nordic banks as well as respective government agencies to clarify the criteria and terms for the guarantees. The guaranteed debt package, which has been approved by the European Commission, was implemented in the context of the COVID-19 crisis and is intended to support the airline’s liquidity and prepare for the recovery of its activities.

“We are very pleased that we now have been able to secure a credit facility with the support of the Danish and Swedish governments. The agreement strengthens our financial position in a difficult period when most of our fleet is grounded.  Going forward we will continue our focused work on reducing costs and seeking additional support from the Scandinavian governments to ensure that SAS continues to be the leading provider of critical airline infrastructure in Scandinavia. As part of this we will further our dialogue with the Norwegian government to be able to access up to NOK 1.7 billion of additional state guaranteed funding,” says Torbjørn Wist, CFO of SAS.

The credit facility was coordinated by SEB. Danske Bank, Nordea, SEB and Swedbank were Mandated Lead Arrangers.

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