Scandinavian Airlines (SAS) has reported that yields are at “historically low levels” in its marketplace, as a result of higher fuel prices, an unfavorable exchange rate for the Swedish krona against the dollar and a new Norwegian aviation tax.
Although passenger demand is improving, SAS’s operating environment is becoming more challenging, the airline said Feb. 7.
In the 2016-17 financial year, SAS said it will increase capacity by 6%-8%, measured in ASKs, with the greatest growth on intercontinental and European leisure routes. SAS has focused recently on growing long-haul sectors and flights to Mediterranean destinations, with a mix of new long-haul routes and an incoming A320neo fleet—which have greater capacity than the aircraft they replace—contributing to capacity growth.
Commenting on traffic development in January, the tri-national airline said it increased scheduled capacity in the month by 11.3% over January 2016, while traffic, measured in RPKs, jumped 20.5%, leading to a 5.3% rise in load factors to 69%.
Intercontinental traffic climbed 33.1% while long-haul capacity grew 22.4%, notably by new routes to Miami, Florida, and Los Angeles, California—athough the carrier’s longstanding Asian routes also performed better.
Traffic on European and intra-Scandinavian services increased 14.9%, with growth particularly strong on leisure-oriented routes. Domestically, capacity grew 5.4% while traffic swelled 7.4%.
The airline said it carried 1.9 million scheduled passengers in January, up 9.8% year-over-year, and the highest number it has ever flown in that month.