Scandinavian Airlines (SAS) issued preliminary financial results Nov. 3, prior to releasing its full-year financial figures on Dec. 12. The carrier’s financial year ended Oct. 31.
The airline anticipates full-year revenue for 2016/17 to amount to roughly SEK42.5 billion ($5.2 billion), compared to SEK39.5 billion for the preceding 12 months, with pre-tax income of around SEK1.7 billion, up from SEK1.4 billion for the previous year.
In its forthcoming 2017-18 financial year SAS expects to increase its capacity by just 1-3%, a dip on previous expansion rates, the airline said.
SAS anticipates that total market capacity will accelerate in autumn and winter 2017/18 compared to a year earlier, but it plans to consolidate the capacity growth it has introduced in recent years.
The introduction of larger aircraft to the fleet also means that SAS expects a year-on-year drop in its load factors at the start of its fiscal year, which began Nov. 1.
To meet the increase in market capacity, SAS plans to strengthen competitiveness through efficiency enhancements and greater flexibility. In 2017/2018, these efficiency measures are expected to generate a positive earnings effect of about SEK700 million.
In its outlook for the coming financial year, SAS said that uncertainty in the macro environment remained considerable, with highly-volatile currency exchange rates and jet-fuel prices two factors to take into consideration. The tri-national airline said it had hedged a large share of its expected jet-fuel consumption for the next six months. Despite this, rising jet-fuel prices, together with a sustained strengthening of the dollar, could negatively affect its earnings trend.
SAS added that, following a seasonally weak first six months in 2017/2018, the potential existed for a strong summer 2018.
Taking these factors into consideration, the airline expected to deliver income before tax and nonrecurring items next year somewhere between SEK1.5–2 billion. That outlook was based on no unexpected events occurring.