Crisis-hit airline SAS has reported a deeper May-July loss than a year earlier and said it stays cautious about the approaching winter, as COVID-19 curbs and political uncertainties persist.
Long-struggling SAS, ravaged by the pandemic and pressured by low-cost rivals, sought bankruptcy protection last month as pilots went on a two-week strike, hoping to emerge within nine to 12 months as a more competitive airline.
The carrier reported a third-quarter loss before tax of 1.99 billion Swedish crowns ($188 million) against a year-earlier loss of 1.33 billion crowns.
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"The quarter was impacted by major events that influenced the overall result. First and foremost, the 15-day pilot strike in July which had a severe effect on the overall result," SAS said in a statement, adding underlying demand for travel was healthy in the quarter.
To date, the financial impact of the strike has been 1.4 billion crowns, it said.
Nordnet analyst Per Hansen said that as losses were continuing, the coming quarters would also be difficult and challenging.
"This quarter (May-July) is normally the one where SAS earns its money together with the current quarter," Hansen said in a note.
Chief Executive Anko van der Werff said that more than half the 20 billion crowns SAS intends to convert into equity had been agreed upon, while there was "good progress" on the bankruptcy protection proceedings.
SAS also aims to raise 9.5 billion crowns in equity.
"I expect that to be at the earliest at the end of the year, but probably in the first quarter of next year, that we start the process," van der Werff told Reuters.
SAS recently agreed bridge financing of $700 million with Apollo Global Management to fund its reorganisation under US Chapter 11 bankruptcy protection proceedings, although the loan is subject to court approval.
Some analysts have said Apollo could become a major shareholder in SAS by converting the loan to equity at the end of the Chapter 11 process.
SAS, which is part-owned by the governments of Sweden and Denmark, said its cash balance was 6.1 billion crowns at the end of July, down from 8.5 billion at the end of April.
Denmark has pledged to write off some of SAS' debt and convert some more into equity, as well as inject new cash, if private investors also participate. Sweden backs a debt conversion but says no to injecting more cash.
SAS shares, down 48% this year through Thursday 25 August, rose 1.2% in early trade in Stockholm on Friday 26 August.