SAS — Interim / Quarterly Report 2010

Mar 30, 2010

SAS Group financial update

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN AUSTRALIA, CANADA, JAPAN

OR THE UNITED STATES

SAS Group financial update

Summary financial update January-February 2010

. January-February EBT before non-recurring items MSEK -960

. First quarter estimate for EBT before non-recurring items in line with

Core SAS plan at approximately SEK -1 bn

. Unit cost down 7%, RASK down 4.7%

. Positive cash flow from operating activities, MSEK 418 (85)

Background of this report

The SAS Group is publishing this January-February financial update in

order to provide the market with updated financial and operating

information prior to the launch of the rights issue. The Group has

prepared the financial information included in this report in line with

its normal standards for preparation of interim financial information.

The financial and operating information included in this report has not

been reviewed or audited by the Group's external auditor.

The first quarter interim report of 2010 and the supplementary

prospectus, consisting of the interim report will be published on April

22, 2010 during the subscription period for the rights issue, in order

to provide investors with a financial update during the rights issue.

January-February highlights

· Operating revenue: MSEK 5,888 (6,951), compared to January-February in

2009*

· Yields still under pressure (currency adjusted): -12.2%

· Positive trend in load factor continued: +5.0 p.u. (SAS Group)

· RASK (total traffic revenue/ASK) down 4.7%

· EBT before non-recurring items in continuing operations: MSEK -960

(-420) affected by MSEK -719 in currency effects (year on year)

· SEK 4.3 bn (55%) implemented of total Core SAS cost savings program of

SEK 7.8 bn, which is according to plan

o Additional earnings effect in January-February from cost savings

program: MSEK 450

o Additional reduction in FTE of 200, bringing the total reduction to

3,100 or 67% of the planned reduction of 4,600 FTE

o Unit cost down 7.0% (currency and fuel adjusted)

o Remaining earnings effect of MSEK ~5,200 in 2010-2012

· Negative currency effects of MSEK -719 compared with the same period

in 2009 (year on year) mainly due to effects of weaker USD/SEK exchange

rate and corresponding losses from certain hedging arrangements

· Cash flow from operating activities for the period was MSEK 418, an

improvement of MSEK 333 compared to the same period in 2009

First quarter estimate and process update

· Load factor and RASK are improving further in March and results are

expected to be significantly better than the same period in 2009

· Estimate for first quarter earnings before non-recurring items in

continuing operations: SEK -1 bn (MSEK - 889 in Q1 2009) in line with

the Core SAS plan

· Both main conditions for the four main owners participation in rights

issue satisfied:

o Final agreement signed on March 12, 2010 with pilot and cabin crew

unions of annual cost savings of MSEK 500, with effect from second

quarter in 2010

o Refinancing of SEK 2 bn of bonds maturing in 2010 secured through:

- Issue of bonds in the EMTN market with an aggregate principal amount

of MEUR 60 (approximately MSEK 580)

- SEK 1.6 bn offering due 2015 of convertible bonds on March 19, 2010

- Issue of bonds with an aggregate principal amount of SEK 1 bn secured

on March 30, 2010

* All numbers in brackets represent January-February 2009 figures and

percentage changes are compared to the same period.

January-February in summary with outlook for the first quarter

The first two months of 2010 developed according to plan for the SAS

Group, with an EBT before non-recurring items in continuing operations

of MSEK -960. January and February are the seasonally weakest months of

the year in terms of demand for air travel in the Nordic region. In

addition, the Group´s result was negatively affected by changes in

currency exchange rates of MSEK -719 compared to the same period in

2009. The pressure on passenger yield continued to be significant and

the yield for Scandinavian Airlines (adjusted for currency effects)

decreased by 12.2% compared to the same period in 2009, but the load

factor improved 5.3 p.u., continuing the positive trend which began in

July 2009. As a result, RASK fell by 4.7%. It should however be noted

that the change in passenger yield was positive in January-February 2009

compared to the same period in 2008, primarily due to higher fuel

surcharges imposed in early 2009.

Implementation of the Core SAS cost savings program, which amounts to a

total of SEK 7.8 bn in annual cost savings, has proceeded as planned,

and an additional MSEK 800 of cost saving measures have been implemented

since year end. In total, 55% or SEK 4.3 bn of the total cost savings

program had been implemented as of February 28. Of the total planned FTE

reduction of 4,600 during 2009-2012, FTEs were reduced by an additional

200 FTE in January-February, increasing the total implemented reduction

to 3,100 FTE or 67%. The unit cost for Scandinavian Airlines is

continuing to decline, and was down 7.0% (currency and fuel adjusted)

compared to the same period in 2009, despite large capacity reductions.

Several cost items decreased significantly during the period, e.g.,

costs for personnel adjusted for currency and volume effects, was down

9.6% and aircraft related costs were down by 21.7% compared to the same

period in 2009. Remaining annual earnings effect from the total cost

savings program amounts to MSEK ~5,200 in 2010-2012.

Total currency effects for the period were negative and amounted to MSEK

-719 compared to the same period in 2009. The effects on revenue and

operating expenses were positive MSEK 50 and MSEK 150 respectively. Due

to the significant decrease in USD to SEK, currency effects on certain

hedging arrangements and working capital were negative at MSEK ~-770

compared to last year. Effects on net financial items were MSEK ~-150.

Scandinavian Airlines operating profit, EBIT, improved by MSEK 46 to

MSEK -586 (-634) compared to the same period last year despite the

challenging market conditions and negative currency effects.

In March 2010, passenger yield is expected to continue to decline,

partly due to seasonality effects due to the Easter holidays, thereby

negatively affect revenues for the first quarter of 2010 as compared

with the same period in 2009. EBT before non-recurring items in

continuing operations for the first quarter is expected to SEK -1 bn.

In March 2010, the court of appeals (Lagmansretten) in Oslo reached a

decision in the appeal by SAS and Norwegian Air Shuttle of a ruling in

the dispute in 2008. The court ruled in favor of Norwegian but the

judgment was not unanimous. SAS is currently evaluating a possible

request to the Norwegian Supreme Court for leave to appeal. If the

request is not granted or successful, the recent judgment by the court

of appeals will have a negative effect on the Group's results and

liquidity of approximately MSEK 200.

Direct questions to: Investor Relations SAS Group: Vice President Sture

Stølen +46 8 797 14 51, e-mail: investor.relations@sas.se

All reports are available in English and Swedish and can be ordered on

the Internet: www.sasgroup.net or from: investor.relations@sas.se

The SAS Group's monthly traffic data information is normally issued on

the fifth business day of the following month. A continuously updated

financial calendar can be found at: www.sasgroup.net

For definitions, refer to the SAS Group website, www.sasgroup.net, or

contact investor.relations@sas.se