SAS Group 1st Quarter 2000 Press Conference
Stockholm, May 11, 2000 www.scandinavian.net
SAS IR/STU
2000-05-23
Business highlights - 1st Quarter Modest capacity increase Traffic growth in both classes "Millennium" effect Improved passenger load factors Strengthened home market position Increased Jet Fuel costs Result improvement program in progress SAS IR/STU
2000-05-23
SAS Group
January - March 2000 MSEK
2000
1999
Revenues
10 305
9 705
Cash flow
490
438
Gain on sales
13
387
Pre-tax profit
-297
-11 SAS IR/STU
2000-05-23
Other highlights in 1st Quarter SAS Cargo, Lufthansa Cargo and Singapore Cargo in increased cooperation on air freight SAS, BMA and Lufthansa in Joint Venture Singapore and Austrian join Star AllianceTM SAS tests Digital TV for communications with customers Star Alliance carriers take the lead in airline industry B2B exchange SAS IR/STU
2000-05-23
Increased cost focus - favorable developments during 1st Quarter Unit costs up 0.6% Fuel Costs up MSEK 368 vs 1999 Jet fuel impact unit costs negatively by 4.1 p.u. Result Improvement Program MSEK 1350 achieved as of 1st Quarter SAS IR/STU
2000-05-23
SIH - 1st Quarter stronger than 1999 Income before taxes (MSEK)
600
200
500
150
400
100
300
50
200
0
100
-50
0
Q1/1999
PBT
-100 -200
Q1/2000
Gains
1993 1994 1995 1996 1997 1998 1999 SAS IR/STU
2000-05-23
Radisson SAS Hotels & Resorts expanding to 129 hotels 140
No. of hotels
120 100 80 60 40 20 0 1992 1993 1994 1995 1996 1997 1998 1999 Owned
Leased
Managed
4 new hotels added during 1st Quarter Increased demand in Belgium, Netherlands, Germany and Southern Europe
Franchised
SAS IR/STU
2000-05-23
Increased load factors and stabilization of Business Class development in Q1 Share of full-fare traffic total system 1995-2000
Passenger load factor total system 1995-2000
Moving 12 months values
Moving 12 months values
34%
67%
33%
66%
32%
65%
31%
64%
30%
63%
29% 28%
DEC94 MAR JUN
SEP DEC95 MAR JUN
SEP DEC96 MAR JUN
SEP DEC97 MAR JUN
SEP DEC98 MAR JUN
SEP DEC99 MAR
62%
DEC94 MAR JUN
SEP DEC95 MAR JUN
SEP DEC96 MAR JUN
SEP DEC97 MAR JUN
SEP DEC98 MAR JUN
SAS IR/STU
2000-05-23
SEP DEC99 MAR
Intercontinental routes 1999- April 2000
Passenger load factors North Atlantic/ Asia
85 75 65
AR M
N JA
NO
V
P SE
L JU
AY M
AR M
N
55 JA
Passenger load factor
95
Month
North Atlantic
Asia
"Millennium" effect Asian routes "booming" Reduced over- capacity on North America North America- improved development - primarily in Economy Class Flexible Economy Class ticket introduced SAS IR/STU
2000-05-23
European routes - improvements 1999- April 2000
130 120 110 100
Month
Economy Class
APR
M AR
FEB
JAN
DEC
NOV
OCT
SEP
AUG
JUL
JUN
M AY
APR
M AR
80
FEB
90 JAN
Growth vs LY Index
Business Class/ Economy Class
Strong growth in Economy Class Improved passenger mix Business Class improvements noted Traffic to/ from U.K. strong in Business Class
Business Class
SAS IR/STU
2000-05-23
Danish routes affected by aircraft introductory problems 1999 - April 2000 Passenger load factor
Problems on Aarhus Introductory problems deHavilland Q400 Passenger load factor improved
70 60
AR M
JA N
NO V
P SE
L JU
AY M
M
AR
50 JA N
Passenger load factor
80
Month
Dansih domestic
SAS IR/STU
2000-05-23
Reduced over-capacity on Norwegian domestic routes 1999 - April 2000 Passenger load factor
60 50
Month
Norwegian domestic
AR M
JA N
NO
V
P SE
L JU
AY M
M
AR
40 JA N
Passenger load factor
70
Continued capacity adjustments Passenger load factor still too low SAS gains market shares 21% growth in Business Class in Southern Norway in Q1 SAS IR/STU
2000-05-23
Swedish domestic routes strong 1999- April 2000 Business Class/ Economy Class 125 115 105
M AR
JA N
OV N
P SE
JU L
M AY
M AR
95 JA N
Growth vs LY Index
135
Month
Economy Class
Business Class
Strong growth New price concepts introduced in September Arlanda - Gothenburg and Arlanda- Malmoe gain shares from secondary airport Bromma Arlanda Express Train stimulate traffic Boeing 737-800 introduced 08MAY SAS IR/STU
2000-05-23
Reduced yield pressure in Q1 Total system - currency adjusted 0%
Overall yield down 0,6% in Q1 Growth in Business Class, but still negative mix Continued yield pressure in Economy Class
-1%
-2%
-3% Q1/99
Q1/00
SAS IR/STU
2000-05-23
"CSI Index" 1996-1999
74 70 68 65
70
1999 (November)
1997:2 (November)
1998 (November)
1997:1 (Marts)
1996 (Maj)
SAS IR/STU
2000-05-23
Prices and awards in 1999/ 2000 Grand Travel Award - Norwegian domestic Best Swedish domestic airline The Freddie Award - best international frequent flyer program 1998 Mercury Award - catering and service Cargo Airline of the Year Second best reputation of world airlines (RI&HI) SAS IR/STU
2000-05-23
Scandinavian airports most punctual in 1999 (Major hubs AEA punctuality statistics) Delay >15 minutes
Copenhagen Stockholm Helsinki Oslo London LHR Amsterdam
18,3% 18,5% 18,9% 22,3% 25,7% 30,3%
Zurich Frankfurt Brussels Paris CDG Rome Madrid Milan Malpensa
32,5% 33,5% 35,4% 36,4% 37,4% 48,4% 54,0%
SAS IR/STU
2000-05-23
SAS' cargo business - in increased cooperation New Global Cargo Agreement with Lufthansa Cargo and Singapore Airlines Cargo signed 26APR00 Common products Harmonization of sales, handling and IT 1st Quarter 2000
Revenue tonnes Revenues
up 7% up 2% SAS IR/STU
2000-05-23
Star Alliance stands strong in current alliance turbulence KLM
SAS LUFTHANSA
ALITALIA
'WINGS' ? NORTHWEST
THAI ANSETT
UNITED AIR CANADA
CONTINENTAL
SINGAPORE BRITISH MIDLAND MEXICANA
AIR NEW ZEALAND ALL NIPPON
VARIG
DELTA
AIR FRANCE AERO MEXICO BRITISH AIRWAYS AMERICAN CANADIAN QANTAS CATHAY
TAP AOM IBERIA FINNAIR LAN CHILE
SWISSAIR SABENA
CROSSAIR TURKISH
?
AIR LITTORAL
AUSTRIAN TYROLEAN LAUDA AIR AIR EUROPE SAS IR/STU
2000-05-23
British Midland and Mexicana new members during 2000 Star Alliance™
Regional Partners
Lufthansa United Airlines Thai Airways Air Canada Varig Air New Zealand Ansett Australia All Nippon Airways Singapore Airlines Austrian Airlines Group
Mexicana (by July '00)
Cimber Air Wideroe Skyways Air Botnia airBaltic Estonian Air Grönlandsfly
Traffic System Partners
Spanair Icelandair Maersk Air British Midland
(by July '00 in Star Alliance)
SAS IR/STU
2000-05-23
British Midland Added to SAS' Joint Ventures SAS capacity allocated
Between Finland/Scandinavia and Germany
Non-SAS capacity allocated Between Spain and Scandinavia Between Toronto and Copenhagen Between LHR and Milan, Rome and Madrid SAS IR/STU
2000-05-23
Approaching 2 million EuroBonus members Number of members during 1st quarter increased by 4,4% to 1 886 000
Number of members 2 000 000 1 800 000 1 600 000 1 400 000
SAS IR/STU
2000-05-23
jan 00
jul 99
jan 99
jul 98
jan 98
800 000
jul 97
1 000 000
jan 97
30% 16% 32% 22%
jul 96
Outside Scandinavia Denmark Norway Sweden
1 200 000
jan 96
Member distribution by country:
Strong focus on costs - unit costs down adjusted for fuel costs Index Last Year 6%
Increase of 0,6% in 1st Quarter Down 3,5% adjusted for fuel costs
5% 4% 3% 2%
Positively affected by
1%
– Result Improvement program
0% -1% Q1/99
Q1/00
SAS IR/STU
2000-05-23
Result Improvement Program 1999/00 MSEK 1350 achieved as of 1st quarter 2000 Target by early 2001: 3 000 MSEK Area Cargo Catering & In-flight service IT & communications Distribution & Electronic channels Air crew Ground handling Technical maintenance Overhead & other Total
Targeted effect vs. 1998 100 MSEK 300 MSEK 250 MSEK 800 MSEK 610 MSEK 300 MSEK 310 MSEK 360 MSEK 3030 MSEK SAS IR/STU
2000-05-23
Fleet composition according to strategy - five new units during Q1 CHANGE 30MAR00 Changes until end year 2000
Boeing 767-300 MD-80 MD-90 Boeing 737 DC-9-81 DC-9-41 DC-9-21 Boeing 737-300 Fokker F28 Fokker F50 DeHavilland Q400 SAAB 2000
+5 -1 -1 -1 +3 -
TOTAL
+5
Unchanged Unchanged Unchanged 15 new deliveries Phase out 2000 Phase out 2001 Phase out 2000 Flexible capacity, wet lease Phase out 1999/00 Gradual phase out Phase in 2000 Gradual phase out
SAS IR/STU
2000-05-23
www.scandinavian.net
SAS IR/STU
2000-05-23
Electronic Channels more news to come.. New web site launched Ticketless travel in (NOV99) E-TIX, TPC, TP WAP-based booking 12% of total service (JAN00) Scandinavian sales (up from 6%) Tests of Digital -TV Travel Pass Corporate communications with (TPC) - a great customers (MAY00) success European Travel Portal (MAY00) SAS IR/STU
2000-05-23
Travel Pass Corporate exponential development Reduced distribution costs – Bookings online
No No of of active active cards cards each each month month 55 000 000
Increased customer value
44 000 000 33 000 000
– Pay as you fly!
22 000 000
Feb Feb
Jan Jan
Dec Dec
Nov Nov
Okt Okt
Sep Sep
Aug Aug
Jul Jul
Jun Jun
May May
Apr Apr
Mar Mar
00
Feb Feb
11 000 000
Focus on corporate accounts – Bonus on volume SAS IR/STU
2000-05-23
First European online portal takes off Announced today
First European, multi-airline, online travel market created 10 major European participants Most up-to-date fare information Lowest branded fares To cut the cost of selling and distributing tickets significantly SAS IR/STU
2000-05-23
April traffic figures- a mixed picture Strong growth and sharply increased load factors Business Class affected by Easter periods
SAS Total Intercontinental Europe Domestic and Intrascandinavian
Passengertraffic (RPK) +7,0% +12,9% +4,2% +3,4%
Seat capacity (ASK) -1,4% +2,6% -1,2% -5,2%
Cabinfactor +5,3 p.u.
SAS IR/STU
2000-05-23
Operating key figures - year 2000 Increased traffic growth scenario Continued pressure on yields SAS ASK Frequencies
2000 Up approx 3% Marginally up
RPK Passenger yield Unit costs
Up 7-8% Down 1-2% Down
SAS IR/STU
2000-05-23
The Board of Directors Assessment for full year 2000: Full year forecast from February 17 maintained Efforts to reduce unit cost continues Jet fuel expense estimated at MSEK 3000 for 2000 as a whole Income before taxes ex gains - around MSEK 1000 Capital gains estimated at MSEK 1700 SAS IR/STU
2000-05-23
European airline shares Relative development since January 1999 115
Index
105
Peers SAS
95
85
75 j an99
feb99
mar99
apr99
maj 99
j un99
j ul99
aug99
sep99
o k t99
nov99
dec99
j an00
feb00
mar00
SAS IR/STU
2000-05-23
