Airline SAS posts bigger Q2 loss, eyes end to restructuring

By Elviira Luoma

(Reuters) - Scandinavian airline SAS posted a second-quarter pretax loss that more than doubled from a year earlier on Thursday, while pledging to complete its restructuring this summer.

The company's Chapter 11 plan of reorganisation was approved in March. It filed for U.S. bankruptcy protection in 2022 after years of struggle with high costs coupled with low customer demand, exacerbated by the COVID-19 pandemic.

"We look forward to emerging as a competitive and financially stronger airline with a stable equity structure," CEO Anko van der Werff said in a statement.

SAS said it intends to complete the restructuring proceedings in Sweden and in the U.S., and fulfil all remaining conditions as soon as possible.

The company targets the summer of 2024 to finalise this, but said the timetable may change.

SAS shares were down 13% at 0.0348 crowns ($0.0033) as of 0852 GMT.

The airline posted a pretax loss of 3.07 billion Swedish crowns ($287.43 million) for the February-April quarter versus a loss of 1.41 billion a year earlier as operating costs surged.

Jet fuel prices, which have put a strain on the airline sector's finances for several quarters, pose even a bigger challenge for SAS.

The company has all its fuel, leasing and distribution costs in dollars while its income is in Swedish crowns, van der Werff pointed out in an interview.

"Also given that we are still in restructuring, we cannot hedge. Hedging is what is helping other companies. For us, it is not," he added.

The company's exit from bankruptcy will be financed by $1.21 billion in funding from hedge fund Castlelake, airline Air France-KLM, investment manager Lind Invest ApS and the Danish state.

($1 = 10.6542 Swedish crowns)

(Reporting by Elviira Luoma; editing by Terje Solsvik, Jason Neely and Sriraj Kalluvila)