Scandinavian Airlines (SAS) reported "healthy" travel demand for the third quarter but earnings were “severely affected” by a 15-day pilot strike in July and wider operational disruptions, according to the carrier.
In an earnings report released on Friday the carrier reported a loss of SEK 1,848 million (€178 million) between 01 May and 31 July, a decline of €97 million compared to the previous quarter, which was largely attributed to the July pilot strike that forced the cancellation of some 4,000 flights.
Earnings before interest and tax (EBIT) ended at negative SEK 2 billion (€189 million), a decline of approximately €38 million compared with last quarter.
The carrier saw a 27 per cent increase in capacity compared to the previous quarter, with load factor reaching approximately 78 per cent. Total operating expenses ended at SEK 9.7 billion (€914 million) and total operating revenue came in at SEK 8.6 billion (€810 million) for the quarter. Total revenue increased 22 per cent compared with the second quarter, an improvement of approximately SEK 4.6 billion compared to last year, but still 37 per cent below the third quarter in 2019.
As BTN Europe previously reported, the carrier filed for chapter 11 bankruptcy protection in the US on 05 July, a day after the strike began.
In a statement SAS president and CEO, Anko van der Werff, said the quarter was impacted by “major events that influenced the overall result”. In addition to the lengthy strike, he said the carrier experienced “major operational disruptions” that affected the entire aviation industry across Europe.
Prior to the publication of the Q3 earnings report, the carrier stated the pilot strike had “severely impacted” its liquidity and financial position. To date, the financial impact of the action is SEK 1.4 billion (€132 million).
Earlier this month, however, the airline secured US$700 million (€696 million) in bridge financing with Apollo Global Management.
“This substantial financing commitment is an important milestone in our transformation and it gives us a strong financial position to support our operations throughout the chapter 11 process,” added van der Werff, who remains cautious about the upcoming winter season.
“The transformation of SAS has to continue to adapt to the new market conditions in order to be able to remain flexible, competitive and financially strong for the long term,” he said, adding that the carrier is preparing for “substantial recruitments and rehirings” to meet future demand.