SAS to cut costs after shares suspended

Scandinavian airline SAS has outlined a fresh cost cutting plan while announcing a positive result for the third quarter of the year.

The airline said it was responding to numerous rumours in the Scandinavian media over its finances.

The announcement came after its shares were suspended on the Stockholm stock exchange.

SAS said it would announce earnings before tax of 568 million Swedish Krona on November 8, passenger growth of 9% and cost reduction of 6%.

The performance was said to be proof of the impact of the airline’s latest 4Excellence cost cutting scheme.

“In a very difficult and competitive industry environment, the positive development in Q3 is proof that implementation of the 4 Excellence strategy has proceeded according to plan,” SAS said.

“Furthermore, SAS has for some time signalled the need for significant further efficiency improvements in order to secure its long-term competitiveness,” the statement added.

“The company is currently finalising a comprehensive plan to fundamentally address its cost on a long-term basis, to increase cost flexibility, reduce complexity and also reduce for the effect of the potential equity write down in 2013 due to pension accounting changes.”

The new plan is expected to result in savings of 3 billion Swedish Krona in addition to the disposals of non-core assets.

SAS added that it was in negotiation over the extension and amount of its revolving credit facility and backstop facilities.

Further updates will be made when material developments occur, it added.

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