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SAS Reports Further Passenger Traffic Reduction
Whether to continue enacting limitations and extending entry restrictions for international travel or to loosen and relax them remains a point of concern for many countries. As a result, the uncertainty has continued to affect major international airlines as their load factors have become increasingly dependent on these changes.
Despite some hope for a recovery in the travel industry as COVID-19 vaccines began rolling out in recent months, several airlines like Scandinavian Airlines (SAS) continue to deal with the effects of the pandemic. On Friday, Stockholm-based carrier revealed a significant decline in passenger load factors and travel demand in February due to the ongoing stringent travel restrictions and lengthy entry requirements that countries the airline serves have implemented.
“The travel restrictions continue to put pressure on demand, which has resulted in the further adjustment of offered destinations and departures in February. Strong demand for cargo services has enabled SAS to maintain parts of its intercontinental production, though this has resulted in a low overall passenger load factor of 26%,” SAS CEO Rickard Gustafson said. “However, the load factor for our Scandinavian and European operations has stabilized at around 40% and even increased four percentage points for the month compared with January.”
Last month, 225,000 passengers flew on the flag carrier of Denmark, Sweden and Norway, a 20% decrease compared to January and an 89% decrease compared to the same period last year. Additionally, the Nordic carrier planned to adjust its aircraft seat capacity to accommodate the current travel demand levels, slashing capacity 16% from January levels, totaling 81% lower than February 2020.
A Tactical Approach To Recovery
Despite the airline’s recent reduction in passenger load factors, SAS decided to shift some of its attention elsewhere. In mid-February, while the carrier experienced a substantial decline in passenger traffic, SAS and CFM International signed an agreement as a part of the airline’s fleet upgrade program for CFM International’s LEAP-1A engines to power 35 of the airline’s 39 Airbus A320neos, in the fleet.
“The new LEAP engines and long-term services agreement are an integral part of SAS´ strategic fleet upgrade and will continue to greatly improve our efficiency in our operations. Our goal is to be industry leaders in sustainable aviation, and we are to reduce emissions with 25 percent by 2025, in comparison to 2005. This will mainly be enabled by using state-of-the-art technologies allowing for lower fuel consumption and an increase in the use of sustainable aviation fuels,” SAS Executive Vice President and CFO Magnus Örnberg said, a notion portrayed by the airline’s goal to use more eco-friendly and sustainable engines, for which it was a launch customer in 2011.
Though SAS is also working to minimize the effects of demand slumps through capacity cuts, the Nordic airline is attempting to cut costs by improving the efficiency of its aircraft. And even with months of uncertainty ahead, the airline is hoping to position itself in a better position to rebound amid a significant loss.
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