SAS gets good news — for now — on Norwegian route changes

SAS is expecting a short term boost from rival Norwegian’s decision to pull a number of long-haul routes in the region. As part of a wider restructuring plan, Norwegian is ending flights from Copenhagen and Stockholm to the USA and Thailand. On some of these routes there is an overlap with SAS’s services. “I think it’s in the short term, of course, a positive if we have a better balance between demand and supply in the market, and the market has been characterized by a significant oversupply in the recent years,” CEO Rickard Gustafson said Thursday. While losing a low-cost competitor is undoubtedly a good thing for a legacy carrier like SAS, it also points to the difficulty European airlines currently have making money in the market. Gustafson said that Norwegian’s withdrawal was a “recognition of how difficult it is to generate a decent return” in today’s environment before gloomily pointing out that passenger demand was falling. The CEO’s comments came after the company reported its Q4/full-year results. On a quarterly basis the carrier bounded back with pre-tax profit rising 39% to $115m for the three months to the end of October. On an annual basis, however, the company saw profit slump 61% to $83.6m. Revenue for the year rose 4.5% to $4.9b. SAS blamed the poor full-year performance on “jet-fuel costs, unfavourable currency movements and a strike“.<br/>