SAS Prepares For Another Tough Year After Record Loss

STOCKHOLM: SAS is preparing for losses in 2021, although the roll-out of COVID-19 vaccines should provide some relief in the second half, its chief executive said after an air travel slump tipped the Scandinavian airline to a record $1.2 billion annual loss.

On Thursday, SAS reported a pretax loss of 3.3 billion Swedish crowns ($389 million) for its fourth quarter as sales fell 77% due to the coronavirus crisis. That compared with a profit of 1.1 billion crowns a year earlier and a loss of 2.1 billion crowns in the third quarter.

“When we get to 2022, demand should reach levels that are at least comparable to what they were before the pandemic. Not all the way, but a big step up,” CEO Rickard Gustafson told Reuters.

Gustafson said that he expects a difficult start to 2021 before a recovery in the second half helped by vaccines and pent-up demand from both business and leisure travellers.

“We expect that 2021 will be a weak and tough year but hopefully less bad than 2020,” he added after SAS reported a full-year loss of 10.2 billion Swedish crowns ($1.2 billion).

COVID-19 has brought airlines across the globe to their knees, with once fast expanding SAS rival Norwegian Air Shuttle filing for Irish bankruptcy protection.

SAS, whose biggest owners are Sweden and Denmark, in October secured a rescue plan that boosts its equity by 14 billion crowns, but dilutes shares by 95%.

“The finalized recapitalization, followed by additional initiatives to manage liquidity, makes SAS prepared for a tough winter season and a challenging fiscal year 2021, that most likely will be loss making,” SAS said in a statement.

SAS said that it expects the ramp-up phase for the airline industry to last until 2022, with “a return to pre-COVID-19 levels a few years thereafter”.

SAS warned of weak operating cash flow in the current quarter due to weak demand and accelerated refunds to customers.

Its shares, which had fallen 61% this year as of Wednesday’s close, were up 2% at 0938 GMT.

($1 = 8.4926 Swedish crowns)

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