Scandinavian airline SAS plans to ramp-up winter capacity this year, the company said on September 1 as it posted its first quarterly pretax profit since late 2019, aided by lower fuel costs, higher ticket prices and strong demand.
The airline, which has been under bankruptcy protection since July 2022, swung to a pretax profit of 457 million Swedish crowns (USD 42 million) in its third quarter to July 31 from a 1.99 billion crowns loss a year earlier.
“We still have a lot of work ahead of us with our transformation to secure long-term competitiveness, but I consider this a clear sign that we are on the right track,” CEO Anko van der Werff said in a statement.
“We continue our ramp-up and will increase capacity this winter … We also noted strong ticket sales throughout the third quarter, indicating a healthy underlying demand for travel despite a more uncertain economic outlook,” van der Werff added, without giving any specific details of planned capacity increases. The third quarter, covering much of the Nordic summer, is usually one of the airline’s most profitable periods, along with its August to October fourth quarter.
Sydbank analyst Jacob Pedersen said the earnings were roughly 1000 million crowns better than his expectations of 326 million, due to less currency impact than he had expected.
The long-struggling Nordic carrier has struggled to recover after the COVID-19 pandemic, while labour issues, travel disruption and high costs have hampered efforts to swiftly complete its restructuring process.
Van der Werff said the first profitable quarter since before the pandemic was an important sign that its turnaround efforts were going in the right direction. “But I’ll be the first one to admit we need to do much more … We are still not where we want to be,” he said.
SAS originally aimed to complete its restructuring by July, but the target has now slipped to the end of the year.
Demand for air travel has been strong this year, SAS passenger data shows, defying predictions that soaring inflation and catastrophic weather events would deter travellers.
Whilst van der Werff said that during the summer months they had still seen major passenger flows from north to south but there had been some increased interest in the north. “We definitely see people starting to look to the north more because of some weather issues in very hot countries,” the CEO said.
Shares in SAS, which have a high likelihood of being deemed worthless after the bankruptcy proceedings, were up 14% to 0.42 crowns at 0808 GMT.