We are travelers

SAS’s strategy is to focus on frequent travelers and to be an airline that rewards its customers for their loyalty to us. The most frequent travelers are also the people with the greatest demands on their travel experience and for whom we develop our product and network. This leads to options that benefit all our customers.

The membership in Star Alliance TM provides SAS’s customers with access to a far-reaching network and smooth connections. Star Alliance offers close to 18,500 departures each day to 1,300 destinations in 190 countries world wide.

29 mill.

PASSENGERS DURING THE YEAR

156

AIRCRAFT IN SERVICE

>30%

MARKET SHARE IN SCANDINAVIA

4,7 mill.

EUROBONUS MEMBERS

Celebrating 70 years!

On August 1, we celebrated 70 years as Scandinavia’s leading airline. Together with our customers, we share a passion and interest for travel, and this is what drives us when we strengthen our offering to make life easier for frequent travelers in Scandinavia.

OUR VISION

To make life easier for Scandinavia’s frequent travelers.

ENVIRONMENTAL VISION

SAS intends to be part of the long-term sustainable society and supports IATA’s vision of making it possible to fly without greenhouse gas emissions by around 2050.

PRESIDENT’S COMMENTS

RESULTS IN LINE WITH FORECASTS BUT FURTHER ACTIONS ARE REQUIRED

In line with our forecast, SAS posted positive income before tax and nonrecurring items in 2015/2016. The trend shows that our customer offering is generating a favorable response, but earnings were very negatively affected by currency effects and a lower yield, particularly during the second half of the year. The airline industry is changing fast as demand for air travel increases, particularly in terms of leisure travel where margins are lower and price sensitivity higher. Lower costs and greater competitiveness are required if we are to take advantage of the exciting opportunities for growth in this market. We are therefore raising the target for the efficiency en- hancement program by MSEK 700 by 2019 and, in parallel, we are planning new structural measures that will gradually reduce the cost differential to newly established competitors.

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THE YEAR IN FIGURES

939

MSEK, income before
tax and nonrecurring items

SAS IN FIGURES 2015/2016

As expected, SAS reported positive earnings and the trend shows that our improved product offering continues to be met with a positive response from our primary target group.

However, despite this positive customer response, profitability is under pressure. This is due to a negative currency trend and lower yield, particularly in the second half of the year, which were not fully compensated by our efficiency enhancement program. These factors com- bined with potential aircraft funding needs and maturing loans mean that we must raise our targets to enhance efficiency and profitability.

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FINANCIAL PREPAREDNESS %

EBIT MARGIN %

EQUITY/ASSETS RATIO %

Sustainability

Sustainability agenda

For SAS, sustainable development entails a simultaneous focus on sustainable profitability and financial growth, as well as gradual environmental improvements and social responsibility.

SAS has a considerable social impact, both as a major employer and buyer, as well as through providing societal infrastructure. At the same time, aircraft operations have an environmental impact, primarily through emissions of greenhouse gases and noise around airports.

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Strategy

The first choice for
frequent travelers

One of SAS’s strategic priorities is to be the first choice for frequent travelers. We define frequent travelers as individuals who take five or more return flights per year. These travelers represent around 65–70% of the value of all flights within Scandinavia. Those who fly most often are also the most demanding in terms of the travel experience. By way of digitalization and by focusing on these customers, we can develop our product and our network – which in turn benefits all of our customers

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Strategi

Create an efficient
operating platform

The world is changing and competition within the airline industry is increasing, which is placing greater de- mands on SAS’s operations and competitiveness. For this reason, we are enhancing the efficiency and flexibility of our operational platform to provide the conditions for long-term profitability at SAS and to enable SAS to invest in the customer offering and growth. Since 2012, SAS has implemented cost measures with an earnings impact of some SEK 4.3 billion that have considerably enhanced our operational efficiency. Between 2017 and 2019, further efficiency enhancements of SEK 1.5 billion will be implemented and, in parallel, we are planning new structural measures that will gradually reduce the cost differential to newly established competitors.

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Strategi

Secure
the right capabilities

SAS’s journey of change and increased digitalization raises new demands on SAS’s compiled expertise. We therefore endeavor to ensure we have the right skills to develop SAS further to meet future demands and needs. A more efficient production platform has enabled us to expand investment in long-haul routes, which has led to our recruitment of a large number of cabin crew and pilots in 2015/2016.

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