SAS Group Interim Report January-September 2009

SAS Group Interim Report January-September 2009

Key ratios for the third quarter

• Operating revenue: MSEK 11,076 (13,287) ( 16.6%)
• Number of passengers: 6.2 million (-14.7%)
• Earnings before nonrecurring items in continuing operations: MSEK 37 (301)
• EBT margin before nonrecurring items in continuing operations: 0.3% (2.3%)
• Income before tax: MSEK 114 (110)
• Net income for the period: MSEK 152 (-1,986)
• Earnings per share: SEK 0.06 (-1.97) 


Key ratios for January-September

• Operating revenue: MSEK 34,595 (40,047) (-13.8%)
• Number of passengers: 18.8 million (-15.8%)
• Earnings before nonrecurring items in continuing operations: MSEK -814 (-50)
• EBT margin before nonrecurring items in continuing operations: -2.4% (-0.1%)
• Income before tax: MSEK -1,904 (-609)
• Net income for the period: MSEK -1,643 ( 3,571)
• Earnings per share: SEK -0.86 (-3.49)


Comments by the CEO

During the third quarter, the global economy remained very weak. The effects of
the global recession are tangible throughout the entire airline industry and
significant savings programs are being implemented to address the record yield
fall in the industry, which is resulting in major losses. IATA, the airline
industry organization, is indicating a drop in yield of 20-30% for
intercontinental services. 
 
For the SAS Group, the third quarter was characterized by an increased load
factor, but weaker yield. The fall in yield is primarily attributable to lower
demand for business travel and increasing competition. However, the load factor
was strengthened as a result of the comprehensive capacity reductions we
implemented in line with the SAS Group's strategic approach, Core SAS, and the
many aggressive market initiatives we have carried out. Despite the major
challenges in the industry, third-quarter earnings were positive and amounted to
MSEK 37 before nonrecurring items in continuing operations. In addition, there
were nonrecurring items in a net amount of MSEK 77 and, accordingly, income
before tax was MSEK 114.

Core SAS, which was initiated at the beginning of February and contains
cost-saving measures totaling SEK 4.5 billion, was implemented according to
plan. We have carried out cost-saving measures corresponding to SEK 2.5 billion
on a full-year basis, which had an earnings effect for the first three quarters
of the year totaling SEK 1.3 billion. A total of 1,884 full-time employees left
the Group, while capacity was reduced according to plan. We are now approaching
completion of the capacity reductions, but the full cost-saving effect of Core
SAS, corresponding to approximately SEK 3.2 billion, remains for the rest of
2009 and for 2010. In parallel with implementation of the capacity and cost
reductions mentioned above, further commercial initiatives are being undertaken
to increase the Group's revenues. It is pleasing to see how punctuality
continues at an excellent level and places SAS as the third most punctual
airline in the world, at the same time as customer satisfaction is at its
highest since January 2007. Our market position remains the strongest in the
Nordic region, while our route network is the most comprehensive.  

SAS is continuing the implementation of Core SAS with full vigor. In total,
savings corresponding to SEK 5.2 billion are being implemented, of which
approximately SEK 3.9 billion remains to impact the result in 2009 and 2010. 


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