SAS Group Year-end Report January-December 2008

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SAS Group Year-end Report January-December 2008

Key ratios for January - December

• Operating revenue: MSEK 53,195 (50,598) (5.1%)
• Number of passengers: 29 million
•Earnings before nonrecurring items in continuing operations: MSEK -395 (1,234)
• EBT margin before nonrecurring items from continuing operations: -0.7% (2.4%)
• Net income for the period: MSEK -6,321 (636), of which MSEK -4,895 is
attributable to Spanair
• Earnings per share: SEK -38.08 (3.87)

Major events in 2009

• SAS will renew its strategic approach and  is launching the Core SAS strategy
program
• To implement  the Core SAS strategy, a rights issue amounting to approximately
SEK 6 billion will be conducted. The rights issue is supported by the three
government owners and the largest private shareholder, the Wallenberg
Foundations (FAM). The banks J.P. Morgan, Nordea and SEB have also confirmed
their expectation, subject to certain conditions, to enter into an underwriting
agreement.
• The SAS Group divests Spanair - Spanair is reported as a discontinued
operation and the total earnings impact for 2008, including the sales impact,
amounts 

Comments by the CEO

2008 will probably go down in history as one of the most challenging and
turbulent years that the entire aviation industry has ever experienced. During
the year, we saw a period of record-high oil prices, a financial crisis that
heavily intensified during the final quarter and which led to an economic
recession in many markets that has significantly reduced demand for goods and
services. To address the global recession and our internal challenges, SAS
management has launched a renewed strategic approach, "Core SAS," which contains
five primary areas: focus on our Nordic home market, focus on business
travelers, new efficient organization, improved cost base and a strengthened
capital structure. 

The Group's earnings before nonrecurring items in continuing operations for the
fourth quarter amounted to MSEK -313 and for the full-year 2008 to MSEK -395. To
this are added nonrecurring items corresponding to MSEK -649, which gives income
before tax of MSEK  1,044. Income before tax for the year was charged with
approximately SEK 5 billion attributable to the Spanair operations and effects
of the divestment. Despite these considerably negative effects, it is gratifying
that we have found a solution for Spanair with new Spanish majority owners who
can now develop the company further. Earnings for the Group's core operation,
SAS Scandinavian Airlines, were negative and amounted to MSEK -179, although
this loss was limited by the extensive cost program that the Group quickly
initiated and the general healthiness of the core operations. It is pleasing to
report a favorable performance in SGS, STS and SAS Cargo, which is the result of
an efficient change process. Within the framework of Strategy 2011 and our
short-term Profit 2008 (P08) program, we have implemented measures corresponding
to a total of approximately SEK 4 billion since 2007. A central element of the
program is the reduction in capacity by a total of 33 aircraft, of which 15
aircraft in Spanair."Core SAS" will lead to SAS becoming a more focused and less complex company."Core SAS" contains a number of changes, which combined, will make SAS
profitable and competitive. In addition to implementing a new, streamlined
organization, in combination with extensive structural changes, considerable
reductions to the Group's fleet and route network will be made. A total of a
further 14 aircraft will be withdrawn  within the framework of "Core SAS." Cost
measures totaling SEK 4 billion, of which SEK 1 billion pertains to S11
measures, will generate an earnings effect over the next few years. To enable
effective implementation of "Core SAS", the Board has resolved on a rights issue
of approximately SEK 6 billion.

SAS's market position remains strong. Our brand stands for quality, reliability
and stability. These are also strengths that we will build on further in "Core
SAS," where there will be a clearer focus on destinations and product offerings
that are important to business travelers. Our position also improved during the
year and SAS is among the three foremost airlines in Europe for regularity and
punctuality. We are also at the leading edge in terms of innovation and product
development.

One of the most important priorities I had when I joined SAS in 2007 was to
change and improve relations with our trade unions. Accordingly, it is highly
gratifying that I can state that a real breakthrough in our cultural turnaround
has been achieved. The breakthrough was based on an agreement reached with all
of SAS's trade unions in January 2009 regarding necessary changes to our
collective agreements. All parties have made contributions and annual savings of
about SEK 1.3 billion have now been achieved."Core SAS," with new competitive collective agreements, a more efficient and
simplified organization that can facilitate decision-making and implementation
ability, a competitive cost level, divestment of non-core operations and fleet
reductions will create a stable platform for the future. 

Mats Jansson
President and CEO



Direct questions to: Investor Relations SAS Group: Vice President Sture Stølen
+46 8 797 14 51, e-mail: investor.relations@sas.se

All reports are available in English and Swedish and can be ordered on the
Internet: www.sasgroup.net or from: investor.relations@sas.se

The SAS Group's monthly traffic data information is normally issued on the fifth
business day of the following month. A continuously updated financial calendar
can be found at: www.sasgroup.net