Scandinavian airline group SAS AB on Tuesday said its first-quarter loss narrowed 48 percent to 373 million kronor ($60 million), from 712 million kronor last year, thanks mainly to its cost reduction program.
The Stockholm-headquartered company in February said it expected to reach a full-year pretax profit in 2011 but noted that high fuel prices has made that "considerably more challenging."
The share fell almost 1 percent to 21.40 kronor ($3.41) in early Stockholm trading.
Sales for the three-month period came to 9.2 billion kronor, down from 9.5 billion kronor, but reduced costs helped offset the sinking revenues.
"The first quarter of 2011 was a quarter dominated by continued economic recovery and the favorable economic trend is expected to continue in 2011, particularly in the SAS Group's home market," new CEO Rickard Gustafson said, singling out Sweden and Norway.
He still underlined problems of overcapacity _ mostly in the Swedish market as well as on its European routes from Denmark _ and said it expects the market to grow some 6 percent in the coming year.
In dealing with the higher jet fuel prices, Gustafson said his company is hedging fuel and plans to introduce a surcharge among other initiatives.
SAS said its cost-cutting program "will be completed according to plan in 2011," and that restructuring costs would decline to 400 million-600 million kronor this year.
Despite the lower revenues, Sydbank analyst Jacob Pedersen said the earnings were broadly in line, or better than expectations, but said overcapacity remained a problem. Along with the jet fuel prices "this is clearly an issue," he noted.