Aircraft analyst about SAS: – lags far behind
SAS plunged 20.6 percent on the stock exchange on Wednesday this week, after DNB Markets took out the slaughter knife and cut the price target from 1 to 0.40 kroner per. action.
DNB Markets, led by analyst Ole Martin Westgaard, believed that a reconstruction of SAS looked inevitable and risked bankruptcy without it. The sales recommendation was consequently repeated.
The price fall continued both Thursday and Friday, and the share took a weekend with a total price drop of 24.6 percent to 1.19 kroner during the week. The share was similarly down in both Stockholm and Copenhagen.
For Swedish Dagens Industri, Sydbank analyst Jacob Pedersen paints a gloomy picture of the airline.
– I model at SAS will tie between 5 and 8 billion Swedish kroner every year as a result of fewer business travelers, and SAS has just identified savings of around 4 billion Swedish kroner, he says to the newspaper.
Approaching the precipice
Pedersen thinks it is very difficult to model black numbers on the bottom line, and he shares DNB Markets’ view that the current pricing is difficult to argue for.
– This is a company that quarter by quarter is only getting closer to the precipice, so I finally agree that pricing is far from synchronized with earnings, he says.
SAS will present the report for the fourth quarter on Tuesday next week. The Sydbank analyst estimates an loss of around SEK 2 billion.
– It has been challenging for SAS with the omicron variant, and it has also been put into service. The improvement in traffic we saw last summer, stopped in December, and we saw a drop in revenue again in December and January, he says and adds:
– It will consequently affect earnings for SAS.
– SAS lags far behind
Pedersen points out that Norwegian Air Shuttle has already presented the figures for the fourth quarter.
– Norwegian is a company that now has a “power by the hour” agreement for its aircraft, so it only pays for the aircraft when they are in use, he says.
Some of the comments to the Norwegian management during the presentation indicated that the company has made several very positive and flexible agreements with its employees, according to the analyst.
– I think this is an area where SAS lags far behind, not just Norwegian, but also many airlines in the European region. We must see new and more productive agreements with SAS employees if the company wants to be more competitive, says Pedersen.
– I do not think Norwegian will end up in any deep trouble in 2022, but also keep in mind that Norwegian has been through that reconstructions. SAS has just been through one, and one more may be in store.