SAS posts big loss on back of EU cargo fine

SCANDINAVIAN airlines (SAS) efforts to cut costs were overshadowed by a fine that dragged it to a third-quarter pre-tax loss of 1bn krona (£92.5m) yesterday.

The airline booked 1.4bn krona in one-off charges, the biggest of which was a €70.2m (£60m) fine from the European Commission related to an investigation of European airlines accused of operating a cartel in cargo charges imposed on Tuesday.

Since 2009 SAS has made efforts to cut costs by around 6.3bn krona while helping to boost its underlying business. But the airline has been badly hit by the global downturn and has struggled to compete with no-frills airline.

Acting chief executive of SAS, John Dueholm, said revenues were stabilising and costs would continue to fall, though SAS expects continued price pressure through 2011.

“When you have unit costs decline more than unit revenue, then of course you will have a positive impact on the underlying business," Dueholm said.

In the second quarter the company lost 600m krona mainly due to the volcanic eruption in Iceland that kept most of Europe’s air traffic on the ground for a week.