A strike by Scandinavian Airlines (SAS) pilots contributed to a second-quarter net loss of SEK933 million ($97.7 million), widened from a SEK349 million loss in the year-ago period, the carrier said May 28.

The April 26-May 2 strike forced the airline to cancel about 4,000 flights, including 2,700 during the last five days of the February-April quarter, SAS said. The total impact on income before tax of the strike was an estimated SEK650 million, of which SEK430 million related to the second quarter.

“The pilot strike at the end of the second quarter added to the challenges already faced by SAS from a competitive market, increasing jet fuel price and a weakening Swedish krona,” president and CEO Rickard Gustafson said in a statement. “In addition, we see decreased demand for domestic travel, especially in Sweden. These factors highlight the importance of continued strong focus on improving our efficiency, flexibility and sustainability efforts.”

Operational revenue for the quarter rose 2.7% year-over-year to SEK10.2 billion, while expenses increased 11.6% to SEK10 billion.

Capacity, measured in ASKs, declined 5.1% to 11.2 million, while passenger traffic (RPKs) dropped 5.9% to 7.9 million, resulting to a 70.4% load factor, down 0.6 points. Unit revenue rose 3.4% to SEK$0.69.

As a result of the second-quarter performance, the airline revised earlier guidance for FY2019. Capacity is anticipated to decline 1% in the fiscal year, reversed from the previous forecast of 2%-3% growth.

The agreement with the SAS Pilots Group that ended the strike will increase costs but brings stability, Gustafson said.

“The new three-year collective bargaining agreements with the pilot unions in Denmark, Norway and Sweden give us the stability and time to continue our transformation efforts,” he said. “In total, the net pilot cost across Scandinavia increases approximately 5.4% over the three-year period and includes productivity improvements that to some extent mitigate increased compensation and other costs.”

“Even though the result is far from satisfying, we are encouraged by certain underlying trends,” he added. “The investments we have made in our customer offering are paying off with higher revenue per passenger and an increase in ancillary revenues.”

Kurt Hofmann, hofmann.aviation@netway.at