Weaker SAS profit despite higher traffic – ABC News

Weaker SAS profit despite higher traffic – ABC News

SAS posted a profit before tax of 756 million Swedish kronor in the third quarter. It is significantly weaker than a year ago, although more flying with the company.

Converted by today, the surplus of 674 million Norwegian kroner . In 2013, the surplus for the months of May to July – SAS operates with a staggered fiscal year, which starts in November – at 1.176 million SEK, which is the currency company reports.

Despite the fact that the profit is less than a year ago, it’s better than analysts had expected.

– That we have to be happy while we are clear that we continue to work intensively to cut costs, improve our product offering and gain market share, said Executive Director Eivind Roald, SAS said.

SAS’s shares rose more than 11 percent when the numbers were presented Wednesday.

Also read: New passenger record for SAS

Cost cutting is not enough

Although the company managed to cut the cost per passenger kilometer by 5.6 percent, revenues fell even more: 7.1 percent. This is not a traffic increase of 10 per cent enough to ensure increased revenues for the Scandinavian airline. Total revenue declined from 11.6 to 10.7 billion Swedish crowns.

– When we remember that Widerøe is included from last year, but not in the latest figures. if we keep Widerøe outside income decline of only 0.2 percent, says Roald.

– The results reflected a market with continued strong price pressure. At the same time the high traffic growth and productivity that our strategy has an impact, says Rickard Gustafson. Operating profit decreased from 1,402 to 932 million.

– Must make money

– There is still overcapacity in the market, and currently there are only Avinor and tax-free companies that serve money, none of the airlines, says Roald. He does not envision a further capacity increase in the Scandinavian market during the winter season is upon us.

– We expect more normalized rates, noes about is important for the whole industry. If companies do not make money, we can not offer more routes, better product offerings or new aircraft.