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New traffic figures released by SAS indicate that the company carried 2.5 million passengers in May, down 10 percent from May of last year.
Road traffic accounted for 2.4 million euros, while charter traffic accounted for 98,000 passengers.
SAS was hit hard by a pilot strike that took place from April 26 to Thursday, May 2. However, it took longer for SAS to resume normal operations and before all passengers returned and flew with the company.
This, of course, affects the numbers for the company in May. According to the company, 1,200 flights were canceled and 100,000 passengers were affected.
Several of the un-canceled flights were en route, with punctuality increasing from 83.1% to 86.3%. Regularity, on the other hand, shows that many departures were canceled, from 98.3% to 94.0%.
– We consider that it is a positive report for SAS. including a higher than expected yield (passenger revenues, newspapers, etc.) and a lower capacity, partially offset by a lower fill level, DNB Markets writes in an update.
The brokerage expects analysts to expect a consensus on gross operating profit in 2019 (EBITDA) that will increase by three to five percent thanks to this report.
– Can not resume normal operation quickly
– Despite the fact that SAS was affected by the May strike, we also managed to resume normal operations quickly. We are now looking forward to our summer season, where we have added 25 new routes and five new destinations, Florence, Marseille, Szczecin, Cornwall and Oulu, said SAS CEO Rickard Gustafson in his stock market announcement.
In the quarterly SAS report, on May 28, the company estimated that the strike cost them SEK 650 million (approximately NOK 590 million). At the same time, the company made it clear that making a profit this year was demanding.
The company's traffic report indicates that total capacity (measured in number of passenger-kilometers) decreased by 6.6% in May, while traffic (measured in number of seat-kilometers) decreased by 10.3 %. The number of passengers decreased by 10.1%.
As the traffic decreased more than its capacity, the plane was also less full. The fill rate decreased by 3.0 percentage points to 72.2%.
With regard to the distribution between the different regions, the capacity has decreased more than the long distance traffic (10.3% against 9.6%), so that the number of aircraft used is about the same.
In Europe, traffic decreased to 11.3%, while capacity decreased by only 5.3%, so planes were much less full. One of the same things we see on the domestic lines where traffic has dropped by 7.3%, while the capacity has decreased by only 2.6%.
If we look at the distribution between road traffic and charter traffic, we find that capacity, traffic and the number of passengers have decreased more in charter traffic than in regular traffic.
Last week, Norwegian released its traffic figures for May. They flew while SAS was hit by strikes but struggled at the same time as their plane was on the ground.
Norwegian figures showed that this country carried fewer passengers and had a fill level slightly lower than in May of the previous year, while company margins and ticket revenues increased.
Only the price of oil and the Swedish krona can save the SAS surplus this year
Better margins, lower ticket income
SAS's traffic figures show that the company managed to significantly increase its margins in May.
Earnings per passenger kilometer (yield) increased by 7.04% to 1.03 Swedish kroner. Adjusted for the weakening of the Swedish krona, the underlying rise was 5.4%.
Earnings per available seat (PASK) increased by 3.5% to NOK 0.73, or 1.6% adjusted for exchange rate fluctuations.
The increase in the margin is still not enough to avoid a fall in revenue.
SAS note receipts in May were SEK 3.24 billion, based on E24 performance-based calculations (passenger revenues) and traffic figures. This represents a decline of NOK 3.36 billion in May of last year.
The figure does not include additional revenue from onboard sales, bonus programs, freight, etc.
Hans Jørgen Elnæs, an airline analyst at Winair, says that none of the key figures from the SAS report is surprising and that all are negative as a result of the pilots' strike.
– From the positive point of view, SAS shows that they are able to withdraw slightly higher unit incomes. Yield and PASK have both made progress, said Elnæs, who also points out that the increase may be due to SAS having a lower passenger volume.
– SAS organized campaigns in May for trips this summer and later. So, such low prices do not enter the May figures for SAS, says Elnæs.
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