You Have 3 More Free Stories (0 of 3)Join Skift Pro
SAS Group climbed the most in a year after third-quarter pretax profit beat analysts’ estimates and the Nordic region’s biggest airline said it has the potential to post a positive full-year result.
SAS rose as much as 13 percent to 12.65 kronor, the steepest intraday advance since Sept. 9, 2013, and traded up 12 percent at 11 a.m in Stockholm. The carrier reported a pretax profit of 756 million kronor ($106 million) for the three months ended July 31, compared with the average estimate of 525 million kronor in a Bloomberg survey of three analysts.
The airline delayed earnings targets for fiscal 2015 by one year in December and is disposing of assets and cutting jobs in an effort to return to profit and fend off competition from rivals, including low-cost carriers Norwegian Air Shuttle ASA and Ryanair Holdings Plc. Traffic climbed by 700,000 passengers in the quarter, a 9.6 percent increase, and load factors reached record levels as the carrier sought to boost its most lucrative connections.
“We have continued to gain market share and customer’s confidence,” Chief Financial Officer Goran Jansson said in an interview. “The yield pressure is in a very competitive European market with a lot of added capacity, which has pushed down the whole European yield, especially out of Scandinavia.”
SAS also faces competition from full-service carriers like Deutsche Lufthansa AG and Finnair Oyj, which are looking to draw passengers to their hubs, the executive said. The addition of Norwegian Air long-haul flights out of Scandinavia hasn’t put “too much of a mark into the market yet,” he said. “We are not underestimating that.”
Third quarter revenue fell 7.7 percent to 10.7 billion kronor. The airline is eliminating 300 full-time employees and targeting a 1 billion kronor in additional savings in the year through October 2015, SAS said.
SAS plans to expand its intercontinental network with new routes from Oslo and Stockholm to North America and Asia starting in the second half of next year. The carrier added a direct flight between Stavanger, Norway and Houston in August, targeting frequent travelers in the offshore oil business.
To contact the reporter on this story: Kari Lundgren in London at firstname.lastname@example.org .To contact the editors responsible for this story: Benedikt Kammel at email@example.com.