SAS and Apollo have signed an agreement on charter production for summer 2022 worth just over SEK 1 billion.

Flights will depart from around 20 locations in Sweden, Norway and Denmark and fly to around 30 Mediterranean destinations in Greece, Croatia, Cyprus, Albania, and Turkey.

Within the framework of their three-year collaboration, SAS and Apollo have signed an agreement concerning this summer’s charter flights within Scandinavia for a total of approximately 150,000 passengers.

The collaboration with Apollo is SAS’s largest agreement with a charter operator and the total contract value amounts to around SEK 3.4 billion for the first three years.

SAS continues to phase in new fuel-efficient aircraft and has now one of Europe’s most modern fleets. The charter flights will be flown using the new Airbus A320 aircraft offering the passengers a more comfortable and sustainable way of travel.

SAS strives to be a leader in sustainable aviation and works hard to reduce emissions. SAS does this, for example, with modern and fuel-efficient aircraft and by using sustainable aviation fuels and aims to reduce climate-affecting emissions by 25 percent in 2025.

Scandinavian Airlines-SAS released this plan:

For many years SAS has been burdened by an uncompetitive cost structure, that prevents the company from reaching its full potential. Furthermore, the last two years have been the most challenging in the history of the aviation industry and the future remains unpredictable. Travel patterns and market conditions are changing and will have an additional impact on the company. SAS is now, more than ever, in need of a new start.

SAS will implement measures aimed at securing long-term competitiveness. Along with the already ongoing work of developing an efficient and profitable business, the company is therefore presenting its transformation plan: “SAS FORWARD”.

First quarter of fiscal 2022 results

NOVEMBER 2021–JANUARY 2022

• Revenue: MSEK 5,545 (2,282)
• Income before tax (EBT): MSEK -2,597 (-1,915)
• Income before tax and items affecting comparability: MSEK -2,621 (-1,927)
• Net income for the period: MSEK -2,442 (-2,033)
• Earnings per common share: SEK -0.34 (-0.28)

SIGNIFICANT EVENTS DURING THE QUARTER

• SAS established a partnership with Vattenfall, Shell and LanzaTech to investigate large-scale production of synthetic aviation fuel.
• SAS Connect and SAS Link established operations in Copenhagen and recruitment has started

SIGNIFICANT EVENTS AFTER THE QUARTER

• The SEK 3,000 million credit facility secured with the main owners in 2021, was drawn
• SAS FORWARD is launched – a comprehensive plan to strengthen SAS’ future position

Earnings before tax ended at negative SEK 2.6 billion, down SEK 1.7 billion compared with last quarter, or a SEK 0.7 billion decrease year-on-year. Total operating expenses during the quarter ended at SEK 6.9 billion and total operating revenue landed at SEK 5.5 billion for the quarter. Total revenue decreased 4% compared with the fourth quarter, an improvement of approximately SEK 3.3 billion compared with last year, but still 42% below the first quarter in 2019, which was unaffected by COVID-19. The cash balance at the end of the quarter was SEK 3.4 billion.

Passengers flying with SAS decreased 15% compared to the previous quarter and the flown load factor reached approximately 56%, a decrease of 4 percentage points compared with the earlier quarter. Nevertheless, our capacity was similar to the fourth quarter. Lately on a more positive note we have seen ticket sales accelerating which is promising for times ahead.

SAS FORWARD plan is launched

The pandemic has had a fundamental impact on SAS – ranging from lockdowns, travel-restrictions to structural changes in travel patterns. Absent fundamental change, this will quickly exhaust SAS’ cash resources. Therefore, SAS will proactively adopt a full transformation of its business, including its network, fleet, labor agreements and other cost structures via a broad and comprehensive transformation plan. The plan includes leveraging the SAS brand, achieving unit cost competitiveness, rightsizing the fleet (including refocusing long-haul), and building a sustainable future. SAS FORWARD is a comprehensive business and financial transformation plan designed to place SAS on a solid financial footing.

Key elements of the plan include:

• Reducing the annual costs by SEK 7.5 billion – SAS will aggressively pursue reducing costs with a far more comprehensive burden sharing across all major stakeholder and creditor groups
• Redesigned fleet, network and product offerings – SAS is adopting new network principle and adjusting its fleet and product offerings to position SAS for the future and to enhance customer experience.
• Digital transformation –SAS will undergo a major digital transformation, delivering major improvement in customers’ experiences driving financial benefits
• Positioning SAS as the leader in sustainable aviation – SAS will invest in modern fuel-efficient aircraft, sustainable aviation fuels, emerging technologies and sustainable products and services with incentivized customer behavior change.
• Operating platform acceleration – SAS will improve flexibility and efficiency, and facilitate adapting to changed market demand and competition.
• Strengthening SAS’ balance sheet by deleveraging and raising new capital – SAS FORWARD SEK 7.5 billion annual cost reduction program paves the way for undertaking a complete revitalization of SAS’ balance sheet and to substantially strengthen SAS’ liquidity position, which will allow SAS to further invest in its network, people and continued investments in fuel-efficient aircraft

The success of the program and the ability to attract potential new capital relies on SAS fully achieving the SEK 7.5 billion annual cost take out plan which in turn depends upon SAS stakeholders’ full participation.

In order to achieve the full objectives of the SAS FORWARD plan, SAS has retained the services of Seabury Securities LLC and Skandinaviska Enskilda Banken AB as financial advisors and Weil Gotshal Manges LLP as well as Mannheimer Swartling Advokatbyrå AB as legal advisors.

We will provide an update on the progress of the SAS FORWARD plan in April.

SAS is embarking on a new journey. SAS FORWARD will secure long-term competitiveness and financial strength.

Scandinavian Airlines-SAS has suspended its weekly Oslo – Kyiv flight until at least February 27 due to a possible Russian invasion of Ukraine.

There are are still a few European airlines, including Ryanair, still flying in Ukraine airspace.

Scandinavian Airlines-SAS issued this summer schedule update:

From The Local:

“The dramatic fall came after analysts at Norwegian bank DNB updated their sell recommendation, noting that the company’s debts of 40 billion kronor ($4.35 billion) are “unsustainable” and that “restructuring” is “needed to avoid bankruptcy”.

Since the start of the pandemic the airline has lost around 80 percent of its market value.”

Read the full report:

https://www.thelocal.fr/20220216/sas-shares-plummet-after-analysts-warn-it-risks-going-bankrupt/

SAS expands its network in North America and will start direct routes to Toronto from Copenhagen and Stockholm in June 2022. SAS will operate three weekly flights from Copenhagen and four weekly flights from Stockholm with brand-new A321LR aircraft.

Toronto is the fourth largest city in North America, an international center for business and finance, a truly cosmopolitan city with a vast array of experiences for travelers, from major sports and culture events to great outdoor sceneries around the Great Lakes.

SAS direct routes to Toronto will start in June 2022, provided that SAS obtains the necessary approval from the authorities. Ticket sales will start soon.

The Toronto routes will be operated by A321LR aircraft in a three-class configuration with 157 seats; 22 seats in SAS Business, 12 seats in SAS Plus (premium economy), and 123 seats in SAS Go (economy).

In the coming summer season, SAS will fly to a total of seven destinations in the US and Canada: Boston, Chicago, Los Angeles, New York, San Francisco, Washington DC, and Toronto.

Schedules to and from Toronto:
Copenhagen-Toronto: Tuesday, Thursday, and Saturday
Toronto-Copenhagen: Monday, Wednesday, and Friday
Stockholm-Toronto: Monday, Wednesday, Friday and Sunday
Toronto-Stockholm: Tuesday, Thursday, Saturday and Sunday

In January 760,000 passengers traveled with SAS, an increase of 170% compared to the same month last year. SAS’ capacity also increased by approximately 170% compared with the same period last year. In comparison with last month, the total number of passengers decreased with almost 25% and capacity was reduced by almost 10%. The flown load factor for January was 49%, an improvement of 19 percentage points compared to January last year.

“It will come as no surprise that Omicron had an impact on customer demand during the month, with additional travel restrictions being imposed on our core markets. The overall operational environment was also negatively affected due to increased sickness rates. Winter is in general a slower season and the industry still faces uncertainties regarding the development of the pandemic and SAS must continue to respond to changes in demand. However, our longer-term outlook is that we see the demand for travel increase as restrictions ease,” says Anko van der Werff, President & CEO of SAS.

¹ Change compared to same period last year, p p = percentage points

Definitions:

RPK – Revenue passenger kilometers

ASK – Available seat kilometers
Load factor – RPK/ASK
Yield – Passenger revenues/RPK (scheduled)

PASK – Passenger revenues/ASK (scheduled)

Change in CO₂ emissions per available seat kilometers – SAS passenger related carbon emissions divided with total available seat kilometers (incl non-revenue and EuroBonus tickets), rolling 12 months vs rolling 12 months previous year

Carbon offsetting of passenger related emissions – Share of SAS passenger related carbon emissions compensated by SAS (EuroBonus members, youth tickets and SAS’ staff travel) during the month

From fiscal year 2020 we report change in CO₂ emissions in total and per Available Seat Kilometers (ASK) to align with our overall goal to reduce our total CO₂ emissions by 25% by 2025, compared to 2005.

In December almost one million passengers flew with SAS, an increase of more than 150% compared to the same month last year. SAS’ capacity also increased by more than 150% versus the same period last year and in comparison with last month, capacity remained similar. The flown load factor for December was 57%, an improvement of 24 percentage points compared to December last year.

“Christmas and New Year’s traveling were busy as expected which was positive. However, the development of the Omicron variant of COVID-19 meant that both customer demand as well as personnel capacity were affected throughout the industry, which had a negative impact on the actual number of flights during the month. We continue to be affected by the pandemic and face an unpredictable future, which means that we must be able to respond quickly to changes in customer demand,” says Anko van der Werff, President & CEO of SAS.

¹ Change compared to same period last year, p p = percentage points

Definitions:

RPK – Revenue passenger kilometers

ASK – Available seat kilometers
Load factor – RPK/ASK
Yield – Passenger revenues/RPK (scheduled)

PASK – Passenger revenues/ASK (scheduled)

Change in CO₂ emissions per available seat kilometers – SAS passenger related carbon emissions divided with total available seat kilometers (incl non-revenue and EuroBonus tickets), rolling 12 months vs rolling 12 months previous year

Carbon offsetting of passenger related emissions – Share of SAS passenger related carbon emissions compensated by SAS (EuroBonus members, youth tickets and SAS’ staff travel) during the month

From fiscal year 2020 we report change in CO₂ emissions in total and per Available Seat Kilometers (ASK) to align with our overall goal to reduce our total CO₂ emissions by 25% by 2025, compared to 2005.