More red ink at SAS
March 8, 2013
Scandinavian Airlines (SAS), which announced the sale of its ground services division this week as part of a major cost-cutting effort, didn’t manage to head off more heavy losses in its own first quarter. The losses announced Friday, though, weren’t as bad as expected.
SAS struck a deal to eventually sell off its SAS Ground Handling unit, which has around 5,000 employees, to Swissport of Switzerland. As a first step, the two firms were setting up a joint venture in which Swissport would have a 51 percent stake and SAS 49 percent, until Swissport ultimately takes over. SAS officials had said last fall that a sale of both SAS Ground Handling and commuter airline Widerøe would generate around SEK 3 billion for the financially ailing company.
Negotiations are continuing for the sale of profitable Widerøe and SAS chief executive Rickard Gustafson claimed SAS was delivering, step by step, results from its savings plan. SAS logged a pre-tax loss of SEK 823 million in the first quarter ending February 28, while some analysts had braced for a loss of SEK 1 billion. SAS also reported that passenger counts rose by 1.1 percent in February over the same month last year.