A pilots strike, higher fuel costs and unfavourable exchange rates saw profits cut at SAS in the last quarter.

The two days of industrial action at the start of the period led to some 1,200 flights being cancelled, affecting 100,000 passengers.

However, the Scandinavia carrier reported a 3% rise in revenue for year-on-year for the three months to July – its peak period. The airline achieved record carryings in June and July.

Pre-tax profits fell by 523 million Swedish krone to SK1.5 million in the airline’s third quarter.

President and CEO Rickard Gustafson said: “Although the revenue increase is encouraging, the prevailing macro-economic headwinds require improved efficiency to secure competitiveness and long-term profitability.”

He warned that the airline will need to look at “additional initiatives” as part of a plan to make SK3 billion in “efficiency improvements” by 2020 as costs are not reducing to the level required.

A new management structure is to be introduced from October 1 “to accelerate our efficiency efforts and drive accountability”. This will include all sales, marketing and commercial units being consolidated under one commercial entity.

Gustafson added: “Even though the capacity outlook and recent decline in jet fuel price are positives, several challenges remain unchanged since our second quarter report.

“This includes the continued weakness of the Swedish krona against the US dollar and the euro, as well as an emerging slowdown in the European and global economies.

“Although we are in the process of adapting to current market conditions, the journey towards an even more efficient and effective SAS will require additional time and effort.

“Therefore, we reiterate our full year outlook that it will be challenging to reach a positive result before tax and items affecting comparability for full year 2019.”