SAS Reports Fourth Quarter Net Loss of $306 Million, Full Year Net Loss of $1.1 Billion
The airline reported a fourth quarter net loss of MSEK 2,579 (US $306 million) or SEK (4.46) per common share (US $0.53) and a full year net loss of MSEK 9,275 (US $1.1 billion) or SEK (21.55) per share (US $2.55).
On Tuesday (February 2, 2021), SAS reported their fourth quarter financial results for the period from August-October 2020 and full year financial results for the period from November 2019 through October 2020. The airline reported a fourth quarter net loss of MSEK 2,579 (US $306 million) or SEK (4.46) per common share (US $0.53)/share. For the full year, SAS reported a net loss of MSEK 9,275 (US $1.1 billion) or SEK (21.55) per common share (US $2.55). During the fourth quarter, the airline completed a successful recapitalization adding SEK 12 billion (US $1.4 billion) in liquidity, SEK 14.25 billion (US $1.7 billion) in strengthened equity and repaid a SEK 3.3 billion (US $391 million) revolving credit facility. In Tuesday’s announcement, SAS’ President & CEO, Rickard Gustafson, said,
“Since the beginning of 2020, the coronavirus has changed the fundamentals for the aviation industry through globally imposed travel restrictions and general travel concerns among the broader population. Naturally, SAS is no exception, and our quarterly and fiscal year earnings were severely impacted by the ongoing pandemic. After seeing demand slowly improve during the summer, an accelerated number of COVID-19 cases in September and October unfortunately led to reinforced restrictions across Europe with reduced demand as a direct consequence.”
The airline’s fourth quarter revenue declined 77 percent year-over-year to MSEK 3,035 (US $359 million), while full year revenue declined 55 percent to MSEK 20,513 (US $2.4 billion) versus the previous year. SAS ended the fourth quarter and full financial year with SEK 10.2 billion (US $1.2 billion) in cash. During the beginning of the fourth quarter, approximately 40 percent of SAS’ pre-pandemic markets were under travel restrictions, growing to over 65 percent by the end of the quarter. The airline adjusted to market conditions by offering less than 40 percent of seat capacity compared to the previous year by the end of October. However, SAS continues to offer more essential services to, from and within Scandinavia than any other airline.
SAS has implemented numerous cost savings and liquidity preservation measures including the early phase out of 15 Boeing 737NGs, five Airbus A340s and one Airbus A330. The sale of the aircraft and engines and reduce spend on leasing and maintenance will bolster the carrier’s liquidity. Additionally, SAS has reached an agreement with Airbus to defer new aircraft deliveries to better align their fleet with current and future demand and has also renegotiated contracts with suppliers to reduce all non-necessary IT, development, marketing and product spending. As of November 1, 2020, the company also finalized 5,000 redundancies which were announced in the second quarter.
SAS is the leading airline in Scandinavia, normally carrying over 30 million passengers annually from its main hubs in Copenhagen, Oslo and Stockholm to 125 destinations in Europe, the US and Asia (pre-pandemic figures). The company has targeted a reduction in carbon emissions by 25 percent by 2025 compared to 2005 levels and hopes to transition to 100% biofuel for domestic flights by 2030. SAS also offers ground handling services, technical maintenance and cargo services. The carrier is also a founding member of the Star Alliance, which offers an extensive global network.