SAS is unsatisfied with its full-year earnings. The airline’s CEO explained that the result was significantly lower than last year due to several factors. These factors include high fuel costs, in addition to a strike by staff earlier this year.
2019 has been a fairly tough year for many airlines, with a number of casualties in recent months. It seems as though SAS has felt the effect of 2019. The Scandinavian flag carrier noted a drop in full-year earnings of 1,350 million Swedish Krone, or around $142 million. As a result, the airline only achieved one of three financial targets during 2019.
CO2 emissions down
While SAS’ CEO is unsatisfied with the performance of his airline in 2019, the Scandinavian carrier has had some successes. For example, the airline has cut its CO2 emissions by 2.5% during the year. This has partly been achieved by retiring older aircraft and replacing them with newer, more fuel-efficient aircraft.
However, SAS could still make some progress with its load factors. Taking the month of November for example, the carrier achieved a 69.5% passenger load factor for scheduled traffic. Increasing this number could further cut CO2 per passenger per kilometer. This is something with the low-cost carrier Ryanair is passionate about.
Huge decrease in revenue
Overall for 2019, SAS has seen quite a dip in revenue. In fact, the airline’s profit fell by around 60% according to Skift’s analysis of the figures released by the airline. This left an income before tax of around $84 million.
The reasons given for the drop are due partly to market conditions according to the airline’s CEO. Rickard Gustafson told that the financial results were “significantly lower than last year, due to headwinds”. These headwinds, he explained, were “higher jet-fuel costs, unfavourable currency movements, and a strike”. Back in May, it was estimated that the seven-day strike of SAS pilots cost the airline $52 million, making it a key factor in the airline’s unsatisfactory year.
SAS has said how it is already looking into new initiatives in order to “further improve efficiency, flexibility, and competitiveness in the coming years”. These, it says, will already start to be felt from 2020 onwards.
Part of this will see SAS switching to a single-type fleet consisting of only Airbus Aircraft. Indeed, just this past week, SAS retired its last Boeing 737-600 with a special flight. However, due to the complexity of switching to a single type, especially with regards to training, the benefits won’t begin to be seen until 2021. The airline is set to make Stockholm’s Arlanda base all-Airbus. This follows the airline achieving the same at Copenhagen first.
What do you make of SAS’ 2019 results? Should the airline really be unsatisfied? Let us know your thoughts in the comments!