SAS — Earnings Release 2014

May 8, 2014

SAS reduces forecast for fiscal year 2013/2014 as capacity and price pressure exceed expectations

SAS reduces forecast for fiscal year 2013/2014 as capacity and price pressure exceed expectations

SAS transported 9.2% more passengers in April at the same time as the

load factor improved by 8.6 percentage points to a record high of 78.6%.

Despite this positive trend, the large capacity growth in the market has

created a historically high yield pressure.

The capacity within the Scandinavian market has grown by more than 5%

during the past six months, partly due to more airlines shifting

capacity to the Scandinavian market. For SAS, this means that yield and

PASK* had weaker development than expected during the second quarter. In

March, SAS' currency-adjusted yield and PASK fell by 5.3% and 9.8%

respectively. In April, the load factor improved significantly but the

yield remained low and PASK was thus weak. In addition, other revenues

have had a negative development.

A large number of activities were initiated during the quarter to

strengthen the revenue. Already during April, this generated a concrete

result in the form of more passengers and an improved load factor. The

restructuring program continues to be developed according to plan and is

expected to generate a positive impact on earnings of SEK 1.2 billion

during in 2013/2014.

"The increasing competition for customers means that SAS is now taking

an even more aggressive approach. We have improved our offer to

Scandinavia's frequent travelers, intensified our market activities and,

accordingly, can now note a growing number of customers combined with a

higher load factor. At the same time, the uncertainty relating to the

capacity trend in the market means that the revenues from the growing

volumes are difficult to estimate," says Rickard Gustafson, SAS

President and CEO.

SAS communicated the following in connection with the release of the

interim report in March for the period November 2013 - January 2014:

Full year 2013/2014

"Market conditions remain challenging with overcapacity in several of

SAS' markets, for which reason the yield and PASK (passenger

revenue/scheduled ASK) are expected to continue to decline in 2013/2014.

The restructuring program is gradually increasing SAS' competitiveness.

In the 2013/2014 fiscal year, the earnings impact from the restructuring

program is expected to amount to SEK 1.2 billion. Provided that market

conditions, in terms of capacity, jet fuel and exchange rates, do not

decline any further and that no unexpected events occur, potential

exists to post a positive EBT, excluding the positive effect from the

amendments to pension reporting, also in the 2013/2014 fiscal year."

As a result of the capacity- and yield trend during January-April, SAS

will recognize earnings below market expectations for the second

quarter. With this development as background, SAS is reducing its

forecast for the fiscal year 2013/2014 as set out below:

"Market conditions remain challenging with overcapacity in several of

SAS' markets, for which reason the yield and PASK (passenger

revenue/scheduled ASK) are expected to continue to decline in 2013/2014.

In the 2013/2014 fiscal year, the earnings impact from the restructuring

program is expected to amount to SEK 1.2 billion. Provided that market

conditions, in terms of capacity, jet fuel and exchange rates, do not

decline any further and that no unexpected events occur, potential

exists to post a positive EBT, including the positive effect from the

amendments to pension reporting, also in the 2013/2014 fiscal year."

More detailed information about SAS' revenue- and cost initiative will

be presented in the interim report to be published on June 18, 2014.

*The definition of PASK is passenger revenues divided by scheduled ASK.

For further information:

Press Office telephone: +46 8 797 2944