The full-year loss of SAS Scandinavian Airlines deepened as the airline works its way through the Chapter 11 restructuring process. Despite carrying significantly more passengers in the past months, the financial results are lagging behind. SAS continues to see deep red as restructuring progresses.

SAS reported a SEK -7.048 billion net loss for FY22, which compares to SEK -6.523 billion for November-October 2021. The loss before tax was SEK -7.846 versus SEK -6.525 billion last year. Revenues saw a healthy lift upward to SEK 31.824 billion, up from SEK 13.958 billion. Passengers carried increased by 130.7 percent to seventeen million.

In its Q4 (August-October), revenues increased to SEK 10.561 billion from SEK 5.672 billion. Capacity was up fifteen percent on Q3 and the number of passengers carried increased by thirteen percent to 5.4 million, the highest since the start of the pandemic. SAS ended the quarter with a net loss of SEK -1.238 billion versus SEK -744 million in the same quarter last year. Earnings before tax ended at SEK -1.701 billion compared to SEK -945 million.

The number confirms that SAS has work to do to get back to profitability, which it expects in 2024. It is working on that, with the Chapter 11 restructuring in progress since July that is supervised by the Southern District New York bankruptcy court. “SAS needs to continue its transformation to adapt to the new market conditions in order to be able to become more flexible, competitive and financially strong for the long term. Cost reductions across the business remain in focus to secure our cost competitiveness,” said CEO Anko van der Werff in the earnings report.

Van der Werff said that progress is being made on the SAS FORWARD restructuring plan, which has identified SEK 7.5 billion in structural cost reductions by 2024. The court approved lease restructurings with thirteen lessors for 46 aircraft, while the airline rejected a number of leases. It also secured $700 million in Debtor-in-Possession funding to get it through the restructuring. But the court still needs to approve the collective bargaining agreements with the pilot unions that were agreed in July after a costly strike. SAS is confident that it will exit Chapter 11 in the second half of 2023. SAS ended October with SEK 8.7 billion in cash.

Van der Werff said that SAS is “engaging with other stakeholders as part of the next phase of the Chapter 11 process, which includes launching an equity solicitation process to obtain the capital necessary to implement our SAS FORWARD plan and working to build consensus for a plan of reorganization.” The carrier has the support from the Swedish, Norwegian, and Danish governments for the debt restructuring of debt and hybrids into equity, but Denmark is the only stakeholder that has expressed its willingness to participate in an equity raise.

The coming winter months are the quiet period for SAS. Although demand looks positive, the airline remains cautious as the geopolitical situation, continued Covid restrictions in some parts of Asia, and inflation has an impact on the industry environment. SAS will operate 170 routes to ninety destinations this winter and had included s Miami, Sälen/Trysil, Innsbruck, and Salzburg to its network. From Copenhagen, SAS will connect Copenhagen with New York JFK, in addition to the existing routes between Scandinavia and Newark.

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Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
In 2022, he has gone full-time freelance. Richard has been contributing to AirInsight since December 2018. He is also writing for Airliner World and Aviation News. From January 2023, he will add a part-time role with Dutch website and magazine Luchtvaartnieuws. Twitter: @rschuur_aero.

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