SAS has best margin for years but risks remain

SAS had a good year compared to its troubled past
SAS has had a good year, compared to its troubled recent past. It returned to profit in its full-year results and its operating margin is its best for at least a decade. But there is a dark side to the results, industry analysts at CAPA report.
The airline managed to reverse its longstanding trend of declining unit revenue, thanks to tight capacity management and focus on enhancing product for frequent flyers as much as favourable currency movements.
However, as previously reported, SAS’s unit cost also increased, despite lower fuel prices. Overall, SAS remains less profitable than the airline industry as a whole.
In 2016, SAS plans to expand its long-haul network, but the risks of pushing the throttle on capacity growth in a competitive market are high, especially as forecasting unit revenue is less certain than forecasting unit cost.
To read the full analysis, click here.


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