STOCKHOLM (Reuters) - Scandinavian airline SAS swung to a second-quarter pretax profit that was much higher than market expectations on Wednesday and repeated it expected to make a profit for the full year.
The airline, half-owned by Sweden, Norway and Denmark, made a pretax profit of 729 million Swedish crowns ($114 million) against at forecast for a profit of 240 million in a Reuters poll and a loss of 600 million a year earlier.
SAS has long been struggling with high costs and fierce competition from no-frills rivals, while the global downturn and soaring jet fuel prices in recent years have added to the airline's troubles. It has only made a profit in two out of the last 8 years.
However, its latest 7.6 billion crown cost-cutting program looks to have put it back on track.
"Jet-fuel prices, increasing uncertainty regarding the global economy and additional capacity in the market are continuing to present challenges but, provided that no unexpected events occur, the conditions remain positive for the SAS Group to achieve positive income before tax for full-year 2011," SAS said in a statement.
The latest economic turbulence, however, could make conditions more challenging.
Industry body IATA said this week that the recent revival in global air travel may be about to slow sharply as economic headwinds discourage premium travel.
In June -- before the current bout of market turbulence sparked by Europe's debt problems and a weak U.S. economy -- the IATA more than halved its forecast for airline industry profits this year to $4 billion.
($1 = 6.395 Swedish Kronas)
Source: http://www.reuters.com
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