Scandinavian Airlines (SAS) has reported a net loss of almost $1.07 billion (MSEK -9,275) for its fiscal year that closed at the end of October 2020. According to the airline’s financial results, the record loss was mainly attributed to the coronavirus pandemic that crippled the aviation sector.
For the previous accounting year, from November 2018 to October 2019, SAS posted a profit of $70 million. From the results, the company’s sales slumped by more than half to $2.5 billion compared to the previous quarter.
The results released on December 3 indicated that the SAS was forced to cut 40% of its staff as part of a coronavirus rescue plan. However, the airline anticipates a positive 2022.
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Over the summer, the company acknowledged that there were signs of recovery as cases of Covid-19 began to decline. However, the resurgence of the cases in North America and Europe dealt a blow to the company’s recovery path. The second wave resulted in renewed travel restrictions in affected areas.
As a means of adapting to the pandemic, SAS began to gradually lower the offered seat capacity to below 40%. However, SAS revenue hopes to rebound, considering it has held a grip on the Scandinavia travel sector.
As Finbold has previously reported, in October 2020, the company recorded a drop of 78.7% in the number of passengers carried on a Year-over-Year basis.
Focus on 2022 recovery
SAS CEO Rickard Gustafson believes that the decline in the aviation industry will continue until 2022. He added that it is encouraging that the possibility of a vaccine spells good fortunes for the entire airline industry. According to Gustafson:
“However, we expect weak operating cash flow in the first quarter of 2022 due to low demand during the winter season combined with accelerated refunds. Our view continues to be that the ramp-up phase for the airline industry will last until 2022 before demand can reach more normalized levels, with a return to pre COVID-19 levels a few years thereafter.”
Notably, Sweden and Denmark, the SAS’ two largest shareholders, have already announced plans to rescue the airline.
The trend of rescuing airlines is popular across Europe in the wake of the pandemic. For instance, France and Germany have announced support for Air France and Lufthansa, respectively.
Featured image: SAS CEO Rickard Gustavson, sasgroup.net