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UPDATE 2-SAS Q1 loss doubles, to give detail in H2 on more savings
March 8, 2017 / 8:49 AM / 8 months ago

UPDATE 2-SAS Q1 loss doubles, to give detail in H2 on more savings

(Adds CEO comment)

March 8 (Reuters) - Scandinavian airline SAS posted on Wednesday a fiscal first-quarter pretax loss that was more than twice the size of last year’s amid higher costs, and said it would lay out details on new savings in the second half of the year.

* Repeated fiscal full-year outlook given in December for a positive income before tax and nonrecurring items

* Nov-Jan pretax loss 697 mln SEK ($77.4 mln) vs a year-ago loss of 309 mln and vs a Reuters poll forecast loss of 623 mln

* CEO Rickard Gustafson to Reuters: fuel costs, negative USD translation effect, Norway’s flight tax weighed primarily

* CEO to Reuters: “The flight tax in Norway accelerates price pressure. We have paid 146 mln SEK in Q1 in flight tax and we have not been able to pass that on to prices”

* SAS in Dec warned of significantly lower Q1 pretax result yr/yr due to higher fuel costs and a lower yield

* SAS in Dec doubled an ongoing savings programme and said it was on top of that eyeing further measures

* Said on Wednesday it’s still working to identify further measures, adding: “The total effect on future years will be updated and all measures, including the existing measures of SEK 1.5 billion, will be integrated into a new efficiency enhancement program.”

* Said: “SAS expects that the new structural measures will result in some restructuring costs. We expect to announce further details about these measures and their extent during the second half of 2017”

* CEO on the new measures: looking at around 100 activities across the group, will be an extensive programme, clearly more than a complement to the existing programme

* CEO: “We’re looking at how we can become more efficient in our technical maintenance and ... we have great variations in demand throughout the year so we would like to adapt our production better to demand (swings)”

* SAS, which is part-owned by Sweden, Norway and Denmark,

said its scheduled traffic rose 13 pct in February,

* In Feb SAS, which has struggled for years in the face of competition from budget carriers such as Norwegian Air and Ryanair, said it would set up bases in London and Spain to cut staff costs, run by an Irish company

* CEO: Large interest in job ads out for key positions at new Irish company. Aims for the new hubs, which will have locally employed staff, to be up and running in Nov

$1 = 9.0058 Swedish crowns Reporting by Anna Ringstrom, editing by Terje Solsvik

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