Fuel prices hit SAS airline operator Q1 profits
Stockholm - Record high fuel costs and some overcapacity impacted first-quarter earnings for the SAS Group, the operator of the joint carrier Scandinavian Airlines said Tuesday.
The SAS Group posted a pre-tax loss of 973 million kronor (162 million dollars) for first quarter 2008, compared to a loss of
96 million kronor in the corresponding business period of 2007, SAS said.
Chief Executive Mats Jansson said in a comment that management would expand its cost-cutting programme launched earlier by reducing its plane capacity by 11 planes - or 5 per cent - this autumn and slashing some 1,000 jobs.
The new programme, dubbed Profit 2008, was estimated to generate savings of 1.1 billion kronor.
First-quarter sales were 12.83 billion kronor, up 6 per cent on the corresponding business period 2007.
Jansson said the settlement with Canada-based Bombardier over the SAS fleet of Dash Q400 turboprop aircraft that SAS stopped using after three emergency landings last year would offset most extra costs generated by the use of other planes.
Seven of the 27 Q400 aircraft have been sold to other carriers, SAS said.
SAS continued with its earlier cost-cutting programme launched in June aimed at reducing costs by 2.8 billion kronor.
Some 44 per cent of the costs had been completed at the end of first quarter.
The SAS Group flew 7.3 million passengers during the quarter, an increase of 2.6 per cent on the corresponding business period of the previous year.
The governments of Norway, Sweden and Denmark own a 50-per-cent stake in SAS, while private shareholders hold the rest. (dpa)