- POSTED: 18 Jun 2014 22:11
Scandinavian airline SAS posted heavy losses in its second quarter as harsh competition pushed down ticket prices and it announced further job cuts.
STOCKHOLM: Scandinavian airline SAS announced further job cuts after posting heavy losses in its second quarter as harsh competition pushed down ticket prices.
Between February and April, the beleaguered airline's net losses doubled to 806 million kronor (89.6 million euros, $121.5 million) as revenue dropped by 15 percent to 8.472 billion kronor.
"We are deeply disappointed with the results, which were substantially below our own expectations," chief executive Rickard Gustafson said in a statement.
He said the group would need to step up its cost-cutting programme launched in November 2012 to increase savings "in response to harsher market conditions".
Part of those savings would be made with the loss of 300 jobs in support, administration and management, mainly in Scandinavia.
During the second quarter, the group -- which employs 12,200 -- was hit by "intense competition and greater than expected price pressure in the Scandinavian air travel market", which reduced margins and increased uncertainty, according to Gustafson.
The group's recovery strategy has focused on making its operations more efficient, and has achieved a nine percent drop in unit costs since 2012, excluding fuel.
In early afternoon trading on the Stockholm bourse, SAS shares were down by 0.4 percent while the market gained 0.28 percent overall.