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SAS sees limited impact from coronavirus as Q1 loss widens

Feb 27

SAS sees limited impact from coronavirus as Q1 loss widens

STOCKHOLM — Scandinavian airline SAS said Wednesday its net loss widened in the first quarter and forecast that the economic impact from the novel coronavirus would be limited, while noting the outlook was 'uncertain'.

SAS said in a statement that it booked net loss of 861 million Swedish kronor ($88.6 million, 81.5 million euros) for the three months to January, compared with a bottom-line loss of 469 million kronor a year earlier.

At midday local time (1100 GMT), SAS shares were down more than 11 percent on the Stockholm stock exchange.

In late January, the carrier had said it was suspending flights to Beijing and Shanghai following the outbreak of the coronavirus COVID-19.

It subsequently announced that the suspension would remain in place until the end of March.

Presenting its first-quarter earnings, the company estimated that the cancelled flights would result in a loss in revenues of 200 million kronor.

'As long as the COVID-19 outbreak is contained in scope and the suspension of flights is isolated to the winter season, this should only have a marginal impact on our earnings,' said chief executive Rickard Gustafson.

But Gustafson also pointed out that 'the economic outlook remains uncertain,' and that the outbreak of the new coronavirus added 'additional concerns regarding a slowdown in key economies.'

Speaking to news agency TT, Gustafson also noted that if the situation did not stabilise before the 'important summer season,' it could have 'major consequences for the industry and SAS.'

First-quarter revenues increased by 3.2 percent to 9.7 billion kronor, driven primarily by an increase in passenger numbers.

However, the strong revenue growth was offset by negative currency effects, caused by weak Swedish and Norwegian currencies.

In addition, the results were affected by the adoption of IFRS 16 accounting standards, which resulted in asset writedowns and some expenses no longer being taken into account.

saudigazette