SAS swings into profit as cost cuts start to pay off

SCANDINAVIAN airline SAS yesterday beat forecasts as it swung to a second-quarter pre-tax profit yesterday and said it was on track for the full year, lifting its shares up 21 per cent.

“I stand by the outlook we gave in the first quarter that we will be in the black for the whole of 2011,” chief executive Rickard Gustafson told reporters.

SAS has long been struggling with high costs and fierce competition from no-frills rivals such as Norwegian Air, while the global downturn and soaring jet fuel prices have added to its troubles.

But the latest in a long line of cost-cutting programmes should drag the airline – which has only made a profit in two of the past eight years – back into positive territory in 2011.

The airline, half-owned by Denmark, Norway and Sweden, made a pre-tax profit of 729m crowns (£69.4m), compared with a loss of 600m crowns in the 2010 period.