Updated: SAS losses empty money bags / News / The Foreigner

Updated: SAS losses empty money bags. Latest financial results from SAS have not made happy reading for its new Swedish CEO, Rickard Gustafson. A 52 billion kronor sale over 10 years has kept the airline flying, but now the hold is bare. Company and stock market reports show approximately half the carrier’s former inventory included property; airplanes made up the rest. The situation is now critical. “We have to earn money if we are going to be able to carry on,” SAS’ CFO, Mats Lönnqvist, tells Dagens Næringsliv (DN).

sas, scandinavianairlines, rickardgustafson, matsloennqvist, losses, norwegianairshuttle, trondgiske



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Updated: SAS losses empty money bags

Published on Thursday, 10th February, 2011 at 10:30 under the news category, by Michael Sandelson   .
Last Updated on 10th February 2011 at 21:30.

Latest financial results from SAS have not made happy reading for its new Swedish CEO, Rickard Gustafson.

A SAS plane (illusration photo)
A SAS plane (illusration photo)
Photo: SAS


Down the chute

A 52 billion kronor sale over 10 years has kept the airline flying, but now the hold is bare. Company and stock market reports show approximately half the carrier’s former inventory included property; airplanes made up the rest. The situation is now critical.

“We have to earn money if we are going to be able to carry on,” SAS’ CFO, Mats Lönnqvist, tells Dagens Næringsliv (DN).

Last year’s figures are one of the worst in the airline’s history, and SAS had to go cap-in-hand to its owners for a financial bailout.

The carrier has also faced stiff competition from low-priced Norwegian, to whom the airline had to pay hefty damages.

A comprehensive and expensive restructuring programme, as well as having endured a considerable loss due to last year’s Icelandic Eyjafjallajökull volcanic eruption add to its list of financial woes.

Duty not so free

There has been much governmental to-and-fro regarding the fate of state ownership. Sweden has already expressed an interest in reducing its 21.4 percent stake, Denmark is standing by, and the Norwegian government cannot seem to make up its mind.

Almost exactly one year ago, Minster of Trade and Industry Trond Giske said he would consider it if SAS’ bank account showed no improvement.

Last month’s bidding war by the Air France-KLM group, Deutsche Lufthansa AG, and British Airways over the Scandinavian governments’ joint-owned 50 percent stake, which caused SAS shares to spike two days in a row, seemed to have changed his mind for him, at least for now.

He told Bloomberg he was in no hurry to part with Norway’s 14.3 percent holding unless conditions were right.

“We don’t have a strong need to be owners in an airline company, so should an offer that satisfies all three criteria come along, we’d be open to selling,” he said at the time.

A ministry spokesperson told The Foreigner today, “nothing has changed, and we have no comment to make”.

Swim or sink

Despite 2010’s disastrous results, SAS CEO Rickard Gustafson remains optimistic the company’s balance will make it into the black this year.

“Based on today’s underlying assumptions, unless something unforeseen occurs, of course,” he tells DN.

However, there is still a danger a considerable increase in oil prices or new volcanic eruption could put a hole in the company’s financial fuselage, or at worst ground it.

“There is nothing more (to sell),” confirms CFO Mats Lönnqvist.




Published on Thursday, 10th February, 2011 at 10:30 under the news category, by Michael Sandelson   .
Last updated on 10th February 2011 at 21:30.

This post has the following tags: sas, scandinavianairlines, rickardgustafson, matsloennqvist, losses, norwegianairshuttle, trondgiske.





  
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