3rd Quarter 2003 -Tough market environment offset by significant cost reductions 4Clear stabilisation of traffic volumes – but no significant growth

3rd Quarter 2003

4 Group traffic +1%

4Continued strong pressure on yields 4 Down 14% in Q3

4Turnaround 2005 well underway – ahead of plan 4 Units cost down 14% Q3 (SK) 4 42% of program implemented

Stockholm, November 11th Oslo, November 12th

3rd Interim Report 2003

Negative result mainly attributable to the first quarter

3rd Quarter pressure on revenues offset by cost reductions

EBT bef gains and restructuring MSEK

3rd Quarter MSEK

500

2003

2002

4 Revenue 4 EBITDAR*)

14 920 1 833

16 592 2 145

-10% -15%

4 Lease, depreciation & financial net

-1 732

2 095

-17%

101 564

50 640

4 EBT bef. cap gains*) 4 EBT incl. gains

Interim Report 2003

-57

0

Q1

Q2

101

Q3

-500 -1 000 -1 500 -2 000

-1939

-2 500

*) Excluding resctructuring costs 3rd

2

3

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

4

Position as Europe’s No 4 Airline Group secured further

- Revenues - Passengers

The SAS Group offers low price from all capitals in Scandinavia

4 The SAS Group current platform – Strong position in home market – 100 million in catchment area – Fourth largest airline group in Europe

4 Strengthened market position through acquisitions of minority holdings in Estonian Air 4 Rebranding of Air Botnia into Blue1 in Finland expanding with new nonstop flights from Helsinki to Europe

Braathens from Oslo to:

Stockholm Oslo

Barcelona, Malaga, Alicante, Nice, Roma, Las Palmas, Palma, Lissabon, Dublin

Copenhagen

Snoflake from Copenhagen and Stockholm to: Malaga, Alicante, Athens, Beograd, Beirut, Bologna, Budapest, Dublin, Rome, Istanbul, Lyon, Nice, Palma, Prague, Pristina, Sarajevo, New destinations to come: Ankara, Inverness, Malta, Venice Skopje, Split, Lisbon

3rd Interim Report 2003

5

3rd Interim Report 2003

6

New modulated product concept – the base for future customer set up SK Premium

SK Base + extra comfort Lounge access –

Improved inflight product Seating comfort (pitch)

–

3-classes – LONG HAUL Base

Low Cost Carrier + network carrier advantages – ”our terms and your terms” – – – – –

Timetable Transfers, partners & interline Peak availability All distribution channels Lojality program

3rd Interim Report 2003

Premium

2-classes - MEDIUM Base

SK Base

Extra

Turnaround 2005

Premium

1-class - SHORT Base

Snowflake LCC

Low and high prices In all categories 7

3rd Interim Report 2003

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8

Decided and under implementation 12 billion SEK in Turnaround 2005

Important events in Turnaround 2005 App 400 to leave in SGS

New organization implemented

MAR 04

DEC 03

AUG 03

Primary due to compensation level and choice of business model

Base organization implemented for aircraft and cabin crew

Implementation of SGS

Pilots took over PFI

200 FTE pilot redundancies

Cabin crew to be reduced further

Ground Operation Concept completed

AUG 03

FEB 04

By JUN 04

Q4 04

14

1,9

12

1,4

140 pilots on leave of absence

Revenue Accounting to India

OCT 03

DEC 03

MAY 04

Cabin crew reduced by 320 FTE OCT/NOV 03

4

Administration in SK to be reduced by further 100-150 FTE

NOV 03

FEB 04

3rd Interim Report 2003

0

9

Gap to the ”efficient airline” in compensation schemes Example: cabin crew

1

2

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19 20 21

”Compensation ladder” for cabin crew Distribution of personnel 3rd Interim Report 2003

2,9 2,3

2

Q4 04

New Scandinavian Direct concept launched

1,0

0,9

6

STS move of Base Maintenance to Stockholm and centralization of material supply completed

12,0

1,6

10 8

Administration reduced by 370 FTE

1-2 billion

Overhead Production Inflight - SK Distribution functions concept - SK & Sales - SK SK/group wide

SGS

STS

Subsidiary Airlines & Hotels

Total

Identified, not decided

3rd Interim Report 2003

10

Three separate ”independent” bases to reduce complexity within Scandinavian Airlines

Gap to complete Turnaround 2005 in cabin crew and pilots compensations Main compensation schemes for cabin crew Basic compensation with a new level for each 21 years… …and 11,5%”fly compensation”… Per diem January-September in average 25-30% of salary Overtime (MDC) obligatory for pursers and compulsory on some longer routes for all groups

11

OSLO

STOCKHOLM

15 August Business structure setup Oct 03 Traffic Program and aircraft Feb 04 Administration completed Mar 04 Cabin Crew setup completed Oct 04 Pilots setup completed COPENHAGEN

3rd Interim Report 2003

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12

Sharp reduction in unit cost from Q2 continued in 3rd Quarter

Turnaround 2005 ahead of plan Total financial effect of implemented activities compared to plan MSEK

12 000

Reduction of personnel

12 000

6 000

12000

6000

10000

5000

8000

4 Q1 unit cost down 2% 4 Q2 unit cost down by 13% 4 Q3 unit cost down by 14%

5% 7 600

4000

7 000

6000

3000

4000

2000

2000

Index last year, EBITDAR level (currency adjusted) Scandinavian Airlines 10%

6 000

37% 4 400

42% 5 000

1000

0

Plan

Status SEP 2003 To be implemented

3rd Interim Report 2003

– Turnaround 2005 4 200

0%

4 100

– Net pricing model – Limited long haul effect – Some effect from snowflake introduction

-5% 30%

32%

-10%

1450

-15%

1 800 1400

1 900

Plan

Status SEP 2003

0

1st Q 2001

3rd Q 2001

1st Q 2002

3rd Q 2002

1st Q 2003

3rd Q 2003

Implemented 13

3rd Interim Report 2003

14

3rd Quarter EBT before gains and exceptionals - Business area Business area Q3 03 Scandinavian Airlines -192 Subsidiary & Aff. Airlines 298 Airlines Support Businesses 119 Airline Related Businesses 12 Hotels -37 Group eliminations -99 EBT, before gains & exceptionals 101

Business areas

3rd Interim Report 2003

15

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

Q3 02 -273 316 118 36 124 -271 50

Change 81 -18 1 -24 -161 51

16

Effects from Turnaround 2005 offset by severe pressure on revenues Turnaround Volume

Billion, SEK

4

Increased prices: Fuel & Charges . -0,4 Inflationary comp. -0,7 Others incl curren. +0,7

2,8

3 2

0,5

1

+2,4 +0,8

Gunnar Reitan

0

Deputy CEO

-1 (1,2)

-2 -3 -4

Total change

Lease, depr, Net financ.

Volume (RPK) -7% -1,6 Yield -13% -3,2 Other, currency 0,3

Total costs

(4,5)

Total revenue

-5

3rd Interim Report 2003

3rd Interim Report 2003

17

Subsidiary & Affiliated Airlines positive Quarter for most airlines

18

Turnaround in Spanair on track

New improvement measures of MSEK 1 800 identified and initiated

Earnings before taxes 300

Jul-Sep in MSEK

Revenues

200

2 648

14,5%

1 613

-17,0%

574

-8,0%

201 -17,6%

100 0 -100

EBITDAR

591

9,2%

325

-24,1%

88

-7,4%

14

-76%

EBT, before gains

259

69%

131

-31%

18

n.m

-25

n.m

-200 -300

3rd Interim Report 2003

19

-400

4th Quarter

1st Quarter

2nd Quarter

3rd Quarter

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

Summary development since the SAS Group takeover Long haul closed down March 2002 New availability based pricing model introduced in March 2003 Star Alliance member as from April 2003 After a tough first quarter Spanair has improved earnings significantly 70% of Spanairs Turnaround measures of MSEK 500 already implemented

20

Cost position in line with EasyJet on scheduled routes and Ryanair on charter

Spanair value creation going forward 4 Solid profitability and cash flow is viable as a concequence of excellent cost and efficincy and a business model providing sustainable growth 4 Strong position in Madrid and Barcelona, two of Europé’s strongest markets 4 The underdog position provides a long lasting growth perspectiv without getting close to dominant position 4 The twin track strategy with full service and low cost model is essential in order to capitalize on Spanair’s position

• Strong Q3 EBITDAR +9% EBT bef gains +69%

3rd Interim Report 2003

21

Combining excellent cost and quality/service performance with an innovative and agressiev commercial model, whould provide very good results and value for the SAS Group over the coming years 3rd Interim Report 2003

Hotels – continued weak hotel markets

Turnaround in Widerøe - weak yield development offset by good cost controll Yield down by over 20% managed by good cost control MSEK 300 in cost improvement measurements under implementation New non stop route to Manchester from Bergen as from December

July – September

Operating revenue EBT

22

2003

2002

574

624

18

-2

Weak trading conditions in Western Europe (specially in main capitals) Strong in the Baltic region and Eastern Europe New loyalty program introduced- Goldpoints Improvement program of MSEK 150 under implementation with full effect 2004 July-September

Total revenue EBITDA EBIT EBT

3rd Interim Report 2003

23

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

2003

861 -8 -37 -37

2002

975 141 132 129

24

Finland and the Baltic region of great strategic importance to the SAS Group The SAS Group increases presence in the Baltic region

Baltic strategy

3rd Interim Report 2003

25

Increased presence in Finland and in the Baltic region

49%

100%

Introduction of Blue1 – expansion in the Finnish market AirBotnia to change identity to Blue1 New international nonstop destinations from Finland - Geneva, Düsseldorf and Brussels. Since 1998 SAS Group has tripled the number of daily flights to and from Finland from 40 to 120, of which Blue1 as from November will operate 102.

47%

Estonian Air a growing airline in a very interesting region Operating cost level app. 50% below European airlines AirBaltic growing network out of Latvia with similar cost level as Estonian Air Blue1 growing out from Finland with new non-stop routes from Helsinki to Brussels, Geneva and Düsseldorf

3rd Interim Report 2003

27

3rd Interim Report 2003

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28

Strategic considerations behind new shareholding in Estonian Air

Baltic countries – interesting opportunities in a growing region 4Growing economies

The Baltic states part of SAS home market Exploiting business opportunities to/from Estonia State of the art cost efficiency level – approximately 50% lower than west European network airlines Synergy effects estimated at about MSEK 35 One-stop services via Copenhagen Stockholm hubs

– Expected GDP growth in 2003/04 • Estonia 5,4% / 5,9% • Latvia 6,1% / 6,6%

– Improved domestic purchasing power – Inflation under control • Estonia 3,3% and Latvia 2,8%

4Estonia and Latvia to join EU 4Cost level significantly under Scandinavian countries – Local airline cost structure necessary to be able to operate profitable to/from region 3rd Interim Report 2003

29

3rd Interim Report 2003

30

AirBaltic – growing based on efficient production platform

SAS Group ownership 47% Transported 262 000 passengers in 2002 Efficient production platform Pilot block hours 800 in 2002 Cabin block hours 740 in 2002 Two class product to 14 destinations – 3 destinations opened in 2003 Participates in Euro Bonus program

Jørgen Lindegaard CEO & President

280 260 240 220 200 180

1999

2000

2001

3rd Interim Report 2003

2002

31

3rd Interim Report 2003

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32

Sum up

The Board of Directors

4 Stabilization of market – but no significant growth – Yield pressure to continue

4 Cost measures takes effect

– Turnaround 2005 ahead of schedule – Unit cost down in Q3 by 14% for Scandinavian Airlines

4 Position as Europe’s no 4 airline group secured further – Strengthened position for Spanair, Blue1 & AirBaltic – Acquisition of Estonian Air

3rd Interim Report 2003

33

Assessment for full year 2003: 4Improved economies, but still weak demand – Yields under pressure

4Turnaround 2005 – ahead of schedule 4EBT before taxes approximately negative MSEK 2 000 – Uncertainties about yields 4th Quarter

3rd Interim Report 2003

34

Thank you for your attention! This presentation can be downloaded at the SAS Group’s homepage

www.sasgroup.net

3rd Interim Report 2003

Additional slides for further information

35

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

36

Operating expenses down by 15,8% in Scandinavian Airlines

Severe Revenue Pressure Passenger revenues down 5 410 MSEK

July – September

2003 pro forma 2002

Operating revenue

7 723

9 095

-15,1%

-1 791 -223 -728 -784 -307 -1 101 -1 078 -417 -661

-1 858 -497 -795 -923 -367 -1 356 -1 241 -433 -949

-3,6% -55,1% -8,4% -15,1% -16,3% -18,8% -13,1% -3,7% -30,3%

-15,8%

Personnel expeses Sales & distribution Fuel Government user fees Catering Handling costs Technical aircraft maintenance Data & telecommunication costs Other costs

Operating expenses

-7 090

-8 419

EBITDAR

633

676

EBIT

-26

-224

EBT

-178

-464

3rd Interim Report 2003

37

19 989 MSEK

• Volume • Yields • Currency

- 21,3 % - 6,6% - 12,7% -3,4%

3rd Interim Report 2003

38

Scandinavian Airlines - main actions taken under Turnaround 2005 New organization with three bases as from August 15th Cabin Crew reduced by 320 FTE’s by October Adm personnel reduced by 370 FTE’s by end of October Revenue accounting – move to India New Procedures for Line Maintenance (PFI) New Internet web site for Scandinavian Airlines and Snowflake as from October Subsidiary & Affiiliated airlines Increased ambition levels Braathens MSEK 500, Spanair MSEK 500 Airline Support Businesses Increase SK self check in to 60% in 2005 Centralize STS ‘Base Maintenance’ to Stockholm. FTE’s reduced by 510. Further redundancies expected with plan

4 Total traffic increased by 0,9% in Q3, but down 2,2% in Jan- Sep 4 Total capacity up by 2,3% vs. Q3 in 2002

3rd Interim Report 2003

4Revenues

Recent events under Turnaround 2005

Traffic up by 0,9% in the third quarter

3Q passenger load factors Scandinavian Airlines -0,4 p.u. Spanair +0,5 p.u. Braathens -3,5 p.u. Widerøe +3,0 p.u. Blue1 -7,8 p.u.

January-September

71,8% 69,0% 59,9% 54,3% 47,6%

39

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

40

SAS Group – Quarterly EBT

SAS Group EBITDAR and CFROI

EBT bef gains MSEK million

Jan-Sep

MSEK 4 Revenue

2003

2002

43 930

1 500

48 235

-8,9%

4 EBITDAR

2 947

5 962

-51%

4 EBITDAR margin

6,7%

12,4%

-5,7 p.p.

4 CFROI

7%

1180

1 000 500

142

77

0

50 101 -57

-500

-591

-1 000

-809

-1 500

-1313 -1613

-2 000

11%

-1939

-2 500

Q1

Q2

Q3

2001

3rd Interim Report 2003

41

Scandinavian Airlines 2003/2002 Quarterly EBITDAR development

2002

Q4

2003

3rd Interim Report 2003

42

Group seasonality pattern

EBITDAR, Scandinavian Airlines MSEK

January, February, July and December seasonally weak months Revenues in Q3 in average 7% lower than Q2 last five years Revenues in Q4 in average 3% lower than Q2 last four years Revenues in Q1 in average 15% lower than Q2 last five years

2 000 1 500 1 000

Summer

Winter

Winter

500 1999 2000

0 Q1

Q2

Q3

2001

Q4

2002

-500 2002

2003

2003

jan

3rd

Interim Report 2003

43

3rd

feb mar

apr

maj

jun

jul

aug

sep

Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

okt

nov

dec

44

Significant pressure on revenue halts EBITDAR improvement EBITDAR MSEK 3 500

4 EBITDAR in Q3 2003 was 1 737 (2 130) MSEK

3 000 2 500 2 000 1 500 1 000 500 0 -500

Q1

Q2

Q3

-1 000 2001

2002

2003

Q4

EBITDAR – Scandin Airl. 633 MSEK – Braathens 325 MSEK – Spanair 591 MSEK – Widerøe 88 MSEK – Blue1 14 MSEK

3rd Interim Report 2003

45

Gap mainly found in compensation schemes

Summary Turnaround 2005

3rd Interim Report 2003

46

The Turnaround 2005 business follow up a complement to existing follow up systems • Steering of units on bottom line and include all effects of Turnaround 2005 • Follow up through normal reporting

Efficient production platform

Crew

Technical maintenance

Sales & Distribution

Budget and Business Plans

Overhead & Support

– Follow up status negotiations – Follow up FTE reductions

FTE Follow up

Compensation on competitive level

Steering of businesses and business units

KPI

– Follow up of existing KPIs – KPIs on unit level task force and activity level

Follow up activity

– Follow up of activities vs plan 3rd Interim Report 2003

47

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

48

Distribution of cost reductions in Turnaround 2005 by cost category

Development of the number of employees in the SAS Group

Aircraft lease 36 000

Personell 9%

6%

Inflight

11%

Forecast

IT 34 000

3rd Interim Report 2003

> 40%

600

600

550

550

500

500

450

450

400

400

350

350 2002

2005

– Cabin crew block hours from 530 to 750 – Pay freeze 2003/2004 – Flexible scheduling

3rd Interim Report 2003

300

2002

DEC

NOV

SEP

OKT

JUL

AUG

JUN

APR

MAJ

FEB

MAR

DEC

JAN-03

NOV

SEP

OKT

JUL

AUG

MSEK

500 450 400 350 300 250 200 150 100 50 0

650

> 40%

650

300

Block hours per year, pilots 700

700

50

Improvement measures amounting to MSEK 1 900 for Subsidiary Airlines and Hotels

New agreements with possibility to increase crew and pilot block hours by over 40%

750

3rd Interim Report 2003

49

Block hours per year, cabin crew

JUN

Target SEK 13-14 billion of which SEK 12 billion is decided

APR

32 000

MAJ

Ground Handling & Technical Other

49%

FEB

9%

MAR

5%

33 926

ACT

JAN02

Sales

11%

34 496

2005

– Work day from 10,5 to 12 hrs/day – Hours/week up from 42 to 45 – Pay freeze 2003/2004 – Block hours from 490 to 700-750

51

500

4 Initiated April 2003 4 Total measures of at least MSEK 1 900 4 75% of measures will give effect in 2004

500

300

Spanair

Braathens

Widerøe

150

150

Blue1

Hotels

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

52

Automatic check in will increase SGS efficiency

New organization – three bases

Target to increase Self Service check in to 60% in 2005 Internet check low, but increasing Best performance 9% internet check in Bromma - Copenhagen

CEO/GM

Separation of bases and new leaner organization

COO COO

35% 30%

Network and Strategies, Revenue network and revenue Strategies

Staber Staff unit (STODQ)

Marketing Marketing and and Product Channel Management Management

Accountable Accountable Manager Manager and and Operations Operations Management Management

25% 20% 15%

New agreements with unions and separation of bases => Productivity improvements up to 750 blhr/year

10% 5%

03 09

20

03 08

03 07

20

20

03 05

03 06

20

03 04

Self Service

20

03 03

20

20

03 02

03 01

20

20

02 11

20

20

02 12

0%

Internet check in

3rd Interim Report 2003

700 650

> 40%

35%

600

30%

550 500

25%

400

20%

350 300

3rd Interim Report 2003

Intercont Intercont

Commuter Commuter

54

Cabin crew 750

450

2002

15%

2005

10%

Pilots 700 650 600

5%

> 40%

0%

550

ja n00 ar -0 m 0 aj -0 0 ju l- 0 se 0 p0 no 0 v00 01 -ja 01 n -m a 01 r -m a 01 j Q nov 120 Q 02 320 Q 02 120 Q 03 320 03

500 450

m

Utilize aircraft 1 more hour per day at 3 bases Aircraft types allocated to bases Decrease overhead and administration Centralization of base maintenance to Stockholm- Arlanda PFI for pilots implemented as from August New aircraft configuration with approx. 7% more seats Increase internet sales share Improve check-in automation

STO STO

Electronic Channels increased to 30% in Q3

Summary structural changes in Turnaround 2005

4 4 4 4 4 4 4 4

OSL OSL

3rd Interim Report 2003

53

4 Increased productivity by more than 40% in Scandinavian Airlines 4 New traffic system point to point

Board

CPH CPH

400 350 300

2002

4 Direct internet sales 4,8% of total sales (excluding Travel Pass and bookings through agents) 4 Total volume E-channels in Q3 MSEK 1 984 4 30% of total passenger volumes in Q3 4 Lowest price on homepage

% Sold - Travel Pass, Travel Pass Corporate, ETIX, Internet % Sold via Internet

2005

55

3rd Interim Report 2003

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56

New Internet booking launched in October will make booking simplier and transparent

New booking platform introduced on October 2nd Trip is booked one way.

Increased transparency! 3rd Interim Report 2003

New efficient booking platform

57

3rd Interim Report 2003

www.flysnowflake.com

58

3rd Quarter EBT before gains and exceptionals - Business area Business area Q3 03 Scandinavian Airlines -192 Subsidiary & Aff. Airlines 298 Airlines Support Businesses 119 Airline Related Businesses 12 Hotels -37 Group eliminations -99 EBT, before gains & exceptionals 101

3rd Interim Report 2003

Q3 02 -273 316 118 36 124 -271 50

Change 81 -18 1 -24 -161 51

59

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

60

Sharp reduction in unit cost from Q2 continued in 3rd Quarter

Business Models Today Clear distinction between LCC’c and Network Carrier Business Models

Index last year, EBITDAR level (currency adjusted) Scandinavian Airlines 10%

4 Q1 unit cost down 2,0% 4 Q2 unit cost down by 13% 4 Q3 unit cost down by 14%

5%

– Turnaround 2005 0%

– Net pricing model – Limited long haul effect – Some effect from snowflake introduction

-5% -10% -15%

1st Q 2001

3rd Q 2001

1st Q 2002

3rd Q 2002

1st Q 2003

3rd Q 2003

Ultra simple travel

LCC’s with zero frills Secondary A/P’s ~100 km outside city centers

§ §

4Forceful implementation of Turnaround 2005 4Close gap to non frills 4Find the right Business model for each traffic flow

LCC’s with zero frills Secondary A/P’s ~100 km outside city centers

§ §

§ § § §

LCC’s with zero frills Secondary A/P’s ~100 km outside city centers

§ §

§ §

Network carriers Hub/O&D driven Frills Alliances allow worldwide coverage

Simple travel

Advanced travel

62

Simple travel

§ §

LCC’s with certain frills Secondary A/P’s closer to city centers or primary A/P’s

Advanced travel

§ § § §

Network carriers Hub/O&D driven Frills Alliances allow worldwide coverage

Tomorrow Today

Advanced travel

LCC’s with certain frills Secondary A/P’s closer to city centers or primary A/P’s

§

3rd Interim Report 2003

Ultra simple travel

§

§

Business Models – Current and Future

Strategic focus going forward

§

§

Advanced travel

Tomorrow “How far left or right should an airline position itself?” “ How much added value can be offered in each of the Business Models?” We think they will interafct!

61

Simple travel

LCC’s with certain frills Secondary A/P’s closer to city centers or primary A/P’s

§

Ultra simple travel

3rd Interim Report 2003

Ultra simple travel

Simple travel

Clear distinction between LCC’c and Network Carrier Business Models

Network carriers Hub/O&D driven Frills Alliances allow worldwide coverage

Adjustment measures to narrow gap

LCC will partly adopt Business model by offering limited frills Network carriers will adjust to attract part of LCC’s potential but still keep an advanced premium service and network.

Service level network carrier

Service level no frills

3rd

Interim Report 2003

63

3rd

Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

64

Scandinavian Airlines’ hit by weak economies and uncertain markets January – September Passenger revenue Other revenue Operating revenue EBITDAR

Scandinavian Airlines Development of the number of employees Proforma 2002

2003 19 989

2002 25 399

4 062

2 428

3 094

24 051

27 827

28 493

1 000

2 390

2 593

25 399

EBIT

-953

-380

-217

EBT

-1 459

-1 007

-886

11 000 10 365 Actual

10 000

Forecast 9 026

9 000 9 074

65

Scandinavian Airlines key airline profitability drivers

JU L AU G SE P OK T N OV DE C

N JA

3rd Interim Report 2003

M

02 FE B AR AP R M AJ JU N JU L AU G SE P O KT N O V DE JA C N -0 3 FE B M AR AP R M AJ JU N

8 000

3rd Interim Report 2003

66

Passenger Yield

3rd Quarter 2003 vs 2002 2003 vs 2002

Route Sector

January-September

Scandinavian Airline

Traffic (RPK) Cabin Factor Yields (currency adjusted)

down down down

6,6% 2,7 p.u. 12,7%

Unit costs

down

8,5%

Intercontinental Europe Intrascandinavian Denmark* Norway Sweden

Nominal yield

Currency effect

Adjusted yield

82

105

86

86 79 88 172 83 102

109 104 105 101 109 100

95 83 93 173 92 103

*) Incl Greenland 2002

3rd Interim Report 2003

67

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

68

Scandinavian Airlines passenger load factors in line with AEA average

Traffic on North Atlantic hit by war in Iraq but recovery noted in bookings RPK SK (Geograpical Europe) Spanair

75 70

AEA (Geograpical Europe)

65

4 Load factors over 90% during summer

60 40

0 -20

39

27

33

15

21

3

9

49

37

25

31

43

SAS

Ju ly Se pt em be r

ay M

AEA

3rd Interim Report 2003

69

70

European routes affected by uncertain market conditions

Asian traffic severely affected by SARS – recovery from June 30

Month

3rd

SAS

Interim Report 2003

RPK

10 5 0 -5 -10 -15

71

SAS

39

34

29

24

19

14

4

Week

Cabin factor (%) Europe

AEA

3rd

SAS

te m be r

ly Ju

4 Traffic Jan-Sep 2003: – AEA traffic down 0,8% – SAS traffic down 2,0%

Se p

M ay

M ar ch

be r Ja nu ar y

em

te m be r

N ov

Ju

ly

75 70 65 60 55 50 45

Month

AEA

9

51

46

41

36

31

26

21

16

6

1

-20

Ja nu ar y

Se

4 Weak market 4 Cabin factor in line with AEA

15

Se p

pt em be r

ay

Ju ly

M

h ar c M

Ju ly pt em be r N ov em be r Ja nu ar y

ay M

Se

M

ar c

h

– AEA traffic down 10,1% – SAS traffic down 18,2%

20

11

34 39

AEA

25

M ay

95 90 85 80 75 70 65 60 55 50

24 29

4

51

9 14 19 SAS

Cabin factor (%) Asia

4 Scandinavian Airlines ranked high in customer surveys 4 Daily frequencies resumed to Bangkok/ Singapore and Beijing as nd from August 22nd 4 Traffic in Jan-Sep 2003:

M ar ch

Week

41 46

31 36

21 26

RPK

6 11 16

1

13

Month

3rd Interim Report 2003

Ja nu ar y

19

Week 2002-2003

Ju ly Se pt em be N r ov em be r Ja nu ar y M ar ch

Ja

nu ar y

29 34 39

19 24

4

9 14

46 51

36 41

26 31

16 21

6 11

40

ar ch

45

M

50

Cabin factor (%) North Atlantic

ay

95 90 85 80 75 70 65

M

55

7

1

-40

Source: AEA

40 30 20 10 0 -10 -20 -30 -40 -50 -60

4 Daily frequencies from Copenhagen, Oslo and Stockholm since March 4 Oslo-New York nonstop three times per week with A330 during next winter 4 Traffic in Jan-Sep 2003: – European airlines (AEA) traffic up 3,8% – SAS traffic up 12,2%

20

60

1

Pass load factor (%) 3 weeks roling

80

80

AEA

Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

72

Yields under severe pressure

Bookings has stabilized

2001- 3rd Quarter 2003 Total system - currency adjusted

130

4 Yields down 14,1% in 3rd Quarter 2003

120

2% 0% -2% -4% -6% -8% -10% -12% -14% -16%

110

100

90

80

70 27-jul

03-aug

10-aug

17-aug

HIGH YIELD

24-aug

LOW YIELD

31-aug

07-sep

14-sep

21-sep

28-sep

3rd Quarter 2001

1st Quarter 2002

3rd Quarter 2002

1st Quarter 2003

3rd Quarter 2003

TTL BOOKINGS

4 Bookings to Europe back to 2002 levels 4 Asia recovered since June 4 High yield bookings increase in the end of September 3rd Interim Report 2003

– Affected by: – introduction of Snowflake by app 7-8 p.p – Easter holidays – Class mix negative – Price campaigns – More RPK’s of intercontinental traffic with lower yield

4 Reduced commissions by ~3%

3rd Interim Report 2003

73

74

Brent Crude vs. Jet Fuel January 1998 to Date

ECA – European cooperation agreement still negative but improvements in 3rd Quarter 60

4Tri-party Joint Venture agreement with BMI, Lufthansa and SAS signed November 9, 1999 4In effect from January 1, 2000 4Main scope: To integrate the parties scheduled pass. transport to/ from London/ Manchester 4Negative result effect 2002: MSEK 418 (335)

50

450

Brent 1st Nearby Close

400 350

US Dollar per Barrel

300 250

30 200 20

150

US Dollar per Metric Ton

Jet CIF Cargoes NWE 40

100 10 50

4 Effect Q1 2003 - MSEK 120 4 Effect Q2 2003 - MSEK 88 4 Effect Q3 2003 - MSEK 71

3rd Interim Report 2003

0

19 98 19 -01 98 -0 2 1 9 -0 3 98 -3 0 19 -06 98 -2 6 19 -09 98 -2 1 1 9 -1 2 99 -1 6 19 -03 99 1 6 19 -06 99 -1 5 19 -09 99 -0 8 20 -12 00 -0 1 20 -02 00 -2 9 20 -05 00 -2 6 20 -08 00 -2 1 20 -11 01 -1 4 20 -02 01 -1 2 20 -05 01 -1 0 20 -08 01 -0 3 20 -10 02 -3 0 20 -01 02 -2 5 2 0 -0 4 02 -2 4 20 -07 02 -2 3 2 0 -1 0 03 -1 5 2 0 -0 1 03 -1 0 20 -04 03 -0 4 2 0 -0 7 03 -0 -0 2 926

0

75

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

76

2003 fully hedged 4 Average rates: 4 4 4 4 4 4

2000 2001 2002 Q1 2003 Q2 2003 Q3 2003

265 USD/MT 255 USD/MT 229 USD/MT 278 USD/MT 264 USD/MT 264 USD/MT

Current hedging until year end Mainly CAPS Average for 12 months forward

99% 20%

Estimated jet fuel cost MSEK 3 000 3rd Interim Report 2003

77

Operating revenues Operating expenses EBITDAR EBT bef gains

New improvement measures of MSEK 1 800 identified and initiated

January – September 2003 2002* 13 499 12 877 -11 666 -10 183 18 33 -42

Jan-Sep in MSEK

2 694 381

* = Spanair was included as an affiliated company Jan/Feb 2002

3rd Interim Report 2003

78

Subsidiary & Affiliated Airlines not immune to falling revenues

Income Subsidiary & Affiliated Airlines (MSEK)

3rd Interim Report 2003

79

Revenues

6 020

9,3%

4 898

-11%

1 862

-2,1%

EBITDAR

915

12%

703

-46%

256

-22%

75

-63%

EBT

-45

79%

101

-84%

30

-55%

-38

n.m

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

686 -12,2%

80

Braathens affected by significantly lower yield

Improvements in Spanish market as from June Revenue increased by 9,3% Unit costs down by 4,8% Charter traffic successively better Spanair joined Star Alliance as from April 2003 EBT in Q2 MSEK 86 EBT in Q3 MSEK 238

Yield down 19,1% - partly explained by average longer routes Four new destinations introduced as from March 31st Cabin factor increased by 0,4 p.u Substantial cost measures extended to app MSEK 500 with full effect 2004

Number of passengers up 3,9% in Q2 up 8,0% in Q3 Increased market share on Spanish domestic routes

January – September January – September

2003

2002

Operating revenue

Operating revenue

6 020

5 506

EBT

-45

-211

EBT 3rd Interim Report 2003

81

2003

2002

4 898

5 515

-101

634

3rd Interim Report 2003

82

3rd Interim Report 2003

84

Blue1 affected by close down Widerøe hit by weak yield development of Tampere airport in July New route Helsinki-Geneve introduced in Q3 Increased market shares in weak market

Yield down by 20,5% To implement MSEK 300 in cost improvement measurements

2003

2002

January – September

2003

2002

Operating revenue

686

781

Operating revenue

1 862

1 901

EBT

-38

77

30

66

January – September

3rd Interim Report 2003

EBT

83

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

Airline Support Businesses

Airline Support Businesses January – September (MSEK) Operating revenues Operating expenses

2003 10 417 -10 023

2002 15 135 -14 487

EBITDA

394

648

EBT

-14

236

Jan-Sep in MSEK

Revenues

SAS World Sales moved to Scandinavian Airlines

3rd Interim Report 2003

85

4 163

0,0%

4 205

-6,7%

2 166

6,0%

EBITDA

314

43%

-38

n.m

62

n.m

EBIT

106

n.m

-136

n.m

30

n.m

3rd Interim Report 2003

86

Income Business Area Airline Related Business SAS Cargo moved to Business Area Airlines Support Businesses in 2002 SMART sold in August 2002

January - September MSEK

Operating revenues Operating expenses EBITDA

Income before taxes

3rd Interim Report 2003

87

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

2003

2002

3 571 -3 334

4 457 -4 059

237

398

30

111

88

Airline Related Businesses Jan-Sep in MSEK

SAS Trading

Revenues

1 535 -8,4% 1 175

EBITDA EBT

-25%

368

-16%

332 18,6%

148

-16%

-37

n.m

82

-30%

23

n.m

77

-4,9%

-58

n.m

7

-82%

17

n.m

3rd Interim Report 2003

89

3rd Interim Report 2003

90

Rezidor SAS Hospitality – expanding with new brands Large potential of chain brands in Europa Three new brands added: Park Inn opened in 14 cities in Sweden

Financials

Number of hotels 250 200

Franchised

150

Managed

100

Leased

50

Owned

03 20

1

2 Q3

'0

'0

9

8

0 '0

'9

7 '9

'9

5

6 '9

'9

'9

4

0

3rd Interim Report 2003

91

3rd Interim Report 2003

The SAS Group Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0)8 797 5110 e-mail: [email protected] --- Homepage: www.sasgroup.net -- Results Jan - Sep 2003

92

Commited Credit Facilities of MSEK 6 800

High financial maneuverability Aircraft CAPEX 1 000 900 800 700 600 500 400 300 200 100

Liquidity of MSEK 7 483 Committed credit facilities MSEK 6 800 7 banks agreed facility MEUR 350 Solidity 22% CAPEX holiday Young fleet Real estates released in fourth quarter

MSEK

2001

2002 2003F 2004F 2005F 2006F 2007F

Additional sources of capital Aircraft Non-core businesses

3rd Interim Report 2003

3 100

Aircraft Finance Lease Facility

2 200

Bi-lateral Facilities

1 100 6 800 14 283

3rd Interim Report 2003

93

94

Undervalue in fleet in September by MSEK 351 but neutralized as USD has appreciated to SEK

Target >30%