Demand remained low during the second quarter and the number of passengers fell 2.4 million year-on-year and was down 140,000 on the previous quarter. Weak demand makes it necessary to continue to adapt operations and reduce costs to offset the substantial loss of revenue. This has resulted in costs being SEK 4.6 billion (down: -54%) lower year-on-year and almost SEK 0.5 billion (down: -11%) lower than in the previous quarter. As a direct consequence of fewer passengers, revenue fell SEK 3.3 billion (-63%) year-on-year and SEK 350 million (-15%) compared with our first quarter.
FEBRUARY 2021–APRIL 2021
- Revenue: MSEK 1,932 (5,264)
- Income before tax (EBT): MSEK -2,361 (-3,722)
- Income before tax and items affecting comparability: MSEK -2,361 (-3,714)
- Net income for the period: MSEK -2,433 (-3,470)
- Earnings per common share: SEK -0.35 (-9.15)
SIGNIFICANT EVENTS DURING THE QUARTER
- The Board of SAS appointed Anko van der Werff as President and CEO. The Board concurrently appointed Karl Sandlund, Chief Commercial Officer at SAS, as acting President and CEO.
- SAS secured financing for the majority of its aircraft deliveries until the second quarter of 2022.
SIGNIFICANT EVENTS AFTER THE QUARTER
- SAS has ensured that there is support from the main owners, the Governments of Denmark and Sweden, to gain access to a credit facility amounting to SEK 3.0 billion.
NOVEMBER 2020–APRIL 2021
- Revenue: MSEK 4,214 (14,971)
- Income before tax (EBT): MSEK-4,297 (-4,809)
- Income before tax and items affecting comparability: MSEK -4,309 (-4,792)
- Net income for the period: MSEK -4,483 (-4,331)
- Earnings per common share: SEK -0.64 (-11.49)
SAS expects significantly changed market conditions following the pandemic, with a greater number of leisure travelers and even more intense competition.
Retaining our position as market leader in Scandinavia following the pandemic will require SAS to continue to adapt operations to future market conditions. During the pandemic, SAS has streamlined all aspects of its operations, reduced the number of employees, entered into new collective agreements to increase productivity and reached agreements concerning frozen salary levels. These necessary measures have had a substantial impact and reduced personnel expenses almost 35% year-on-year. Moreover, we have negotiated agreements with suppliers, which has resulted in deferred payments, lower costs and a higher variable component in relation to fixed costs.
However, there will be even greater requirements for efficiency and seasonally adapting operations moving forward. Access to flexible and suitable production is required to be able to offer a complete network and a timetable adapted to Scandinavian requirements for business, leisure and regional destinations. Accordingly, SAS is continuing to develop its operational model that has proved successful in the past few years.
SAS has signed a new collective bargaining agreement for pilots and cabin crew with the Danish union FPU which is a part of FH (The Danish Confederation of Trade Unions). The new agreement means that SAS can establish a complementary base in Copenhagen. With the agreement, SAS improves the flexibility and seasonal adaptations required to maintain its leading position in Scandinavia. As a first step, SAS intends to create new workplaces in Denmark instead of reopening the base in Malaga that closed earlier as a direct result of the pandemic. The new Danish operation will be established using our European operating license, which guarantees a quick and cost-efficient start of operations.
SAS remains committed to its ambitious sustainability target of reducing carbon emissions 25% already by 2025 compared with the base year 2005. In the short term, an accelerated phase-out of older aircrafts means that the share of new, fuel-efficient aircraft in the fleet is rapidly increasing. This is also having a direct impact on our emissions reporting, where carbon emissions per available seat kilometer decreased more than 10% year-on-year. During the quarter, we also secured a minimum of 20% of our planned need of sustainable aviation fuel until 2025.
To conclude, on behalf of the Board of Directors and all the employees at SAS, myself included, I would like to thank Rickard Gustafson, who held the position as President and CEO of SAS with a great level of commitment for a decade. Rickard applied a good leadership culture in his leadership of the company through the necessary change process applicable for SAS and the airline industry as a whole. We wish him every success with his new assignment. At the same time, I would like to wish Anko van der Werff a warm welcome as SAS’ new CEO in July.
I would also like to thank all of my colleagues at SAS for their commitment and endeavors as well as our customers for all their support. As Scandinavia’s leading airline, we look forward to being able to welcome our passengers back on board.
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