SAS pilot strike hits second-quarter results hard

©SAS

The six-day pilots’ strike which ended May 2, is estimated to have cost Scandinavian Airlines 650 million kroner (US$68 million) and contributed heavily to the carrier’s 1.2 billion kroner (US$125 million) loss for the second quarter of its financial year. The strike, which began April 26, was the consequence of a breakdown in negotiations between SAS and SAS Pilot Group, which represented 95% of the carrier’s pilots in Sweden, Denmark and Norway. In total, over 4,000 flights were canceled, affecting more than 370,000 passengers.

To summarize the second-quarter results (2018 figures in brackets):

  • Revenue: SEK 10,187m (9,916m)
  • Income before tax (EBT): SEK -1,216m (-488m)
  • Income before tax and items affecting comparability: SEK -1,211m (-309m)
  • Net income for the period: SEK -933m (-349m)
  • Earnings per common share SEK -2.44 (-1.0)
  • Income before tax negatively affected by strike SEK -430m
  • In the light of the strike and the macro development, the outlook is revised as it will be challenging to reach a positive result before tax and items affecting comparability in fiscal year 2019

SAS President and CEO Rickard Gustafson made it clear the poor results for the quarter were also a result of the impact of an increase in fuel price and a weakening of the kroner. Without these two factors and the cost of the strike, overall results would have been comparable to 2018. He added: “…we need to increase the pace of transformation to adapt our company to the current market conditions and secure future profitability.”

Commenting on the outcome of the pilots’ strike Gustafson confirmed that: “The new three-year collective bargaining agreements with the pilot unions in Denmark, Norway and Sweden give us the stability and time to continue our transformation efforts. In total, the net pilot cost across Scandinavia increases with approximately 5.4% over the three-year period and includes productivity improvements that to some extent mitigate increased compensation and other costs.” (US$1.00 = SEK9.58 at time of publication.)

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