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Scandinavian carrier SAS was one of the few airlines in the world to
stay in the red during the third quarter, it revealed on Wednesday, with a net
loss of 1.05 billion Swedish kronor ($156 million). This compared with a profit
of 152 million kronor in the third quarter of 2009, the only profitable quarter
the airline has experienced in the past three years.
However, excluding non-recurring items, the carrier posted a 387 million
kronor profit. The non-recurring items, which amounted to 1.41 billion kronor,
included a European Union fine of 660 million kronor announced yesterday for
the role SAS played in a global cargo price-fixing cartel. Though it indicated
it would appeal, SAS is including the fine in its third-quarter figures so it
can channel its energy on "looking to the future."
SAS attributed its operating profit to an improvement in load factor and
an 8.7 percent reduction in unit costs, but in contrast to most major carriers
on both sides of the Atlantic, it continues to struggle with depressed yields.
Last week, it announced that while passenger traffic grew 8.2 percent in
October, yield fell 5 percent.
"The market continues to improve but is still unpredictable,
particularly regarding the yield development due to overcapacity on certain
markets," according to SAS. "A recovery has been noted on both
intercontinental routes and certain short-haul business routes. SAS has as a
result initiated yield-enhancing measures to offset the negative yield
Low-cost competition hit SAS's core Scandinavian market in the form of budget
carrier Norwegian Air Shuttle, which has greatly increased capacity in the
region by operating 240 short-haul routes while offering much lower fares. On
Monday, Norwegian signed a letter of intent to lease two Boeing 787-800s as it
starts to target SAS in the long-haul market, as well. Norwegian hopes to
launch flights to New York and Bangkok, and last week announced that it carried
21 percent more passengers in October, though yield declined 10 percent.