Spanish writedown costs Scandinavia's SAS dear

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STOCKHOLM (AP) — The Scandinavian airline group SAS recorded a loss of 1.7 billion kronor ($250 million) in 2011 after taking a big writedown following the bankruptcy of Spanish budget carrier Spanair.

SAS owned an 11 percent stake in Spanair, which the Stockholm-based group wrote off to the tune of 1.7 billion kronor ($250 million) — virtually the same size as the carrier's annual loss. Spanair ceased operations a couple of weeks ago after a regional government in Spain announced it could no longer fund the airline,

Despite the headline loss, SAS sought to paint a more rosy picture Wednesday.

It said its annual revenue was up a slight 1 percent year-on-year at 41.4 billion kronor ($6.2 billion), while its pretax income for the year moved into profit — or 94 million kronor ($14 million) — compared with a 444 million kronor ($67 million) loss in 2010.

CEO Rickard Gustafson said the airline posted record occupancy in the summer, while passenger numbers jumped by 2 million, or 8 percent year-on-year. The SAS group carried a total 27 million passengers in 2011.

Still, he said SAS has been grappling with tougher competition, a weak economic environment and higher fuel prices in 2011.

The company said it would speed up cost-cutting measures in 2012, including a reduction in administration staff, in the hope of saving 5 billion kronor ($750 million) over 2012-13.

SAS shares went up 0.2 percent to 8.95 Swedish kronor ($1.33).

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